Yelp focuses its business on different niches, connecting people with local businesses. Yelp is helpful for users to find the most suitable local spots, including restaurants, salons, or plumbers, around you as you travel. It has the review system for users to share their opinions and experiences about local businesses.
Growing their mobile businesses
With the fast-growing trend of mobile internet use, Facebook Inc (NASDAQ:FB), LinkedIn, and Yelp are trying their best to successfully integrate their sites into users’ mobiles. With a much higher number of users, it is the easiest for Facebook to draw users into its mobile application. In the second quarter, Facebook grew its mobile users by 51% to 819 million. LinkedIn also reported that with the introduction of iOS and Android apps, its mobile activity increased, with mobile homepage engagement rising more than 40%. For Yelp, it reported to have around 10.4 million devices using its mobile app, with 17 million calls to businesses and 23 million clicks for directions. Around 40% of total ad impressions were shown on mobile in the second quarter 2013.
In the long run, I think all of those three businesses could keep growing nicely, especially Facebook and LinkedIn. They both possess good moats with huge active user bases. Facebook has great assets, which include private data of more than 1.1 billion users globally, a bit less than China, the largest populated country in the world. LinkedIn has positioned itself to be a leading talent-solutions and professional-networking hub for its members. With their growing, loyal user bases, and growing mobile usage, Facebook and LinkedIn will experience more growth in the long run.
My Foolish take
The second quarter 2013 seems to be a sweet quarter for social networking businesses, with increasing advertisement revenue and subscriptions revenue. All of those three businesses have built a quite sticky user base for different social networking purposes. Among the three, I like LinkedIn the most, with the most sticky user base and the most capability to charge users. However, with a high valuation, I would expect some pullback in its share price before I would initiate a long position.
The article A Bullish Second Quarter for These Social Networks originally appeared on Fool.com and is written by Anh HOANG.
Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Facebook and LinkedIn. The Motley Fool owns shares of Facebook and LinkedIn. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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