Sure, the stock market has been turning somersaults recently, what with the debt ceiling crisis and jobless numbers still climbing, but not every stock report is full of doom and gloom, however. Not very long ago LinkedIn was a shining star among tech stocks, though what they future would hold for the social media darling was anybody’s guess. Well, now they know.
Good News And Glad-Handing
Now that LinkedIn reported a quarterly increase in profits of more than 110 percent everybody is passing around the cigars and looking for the next tech darling. But does LinkedIn’s success bode well for the entire industry of social media, or simply mean they know what they are doing at the professional networking site. Numbers don’t lie, and while LinkedIn is posting profits, not everyone is doing as well. In fact, MySpace, which was worth a half billion dollars a few short years ago just sold for less than a tenth that amount and might not make it another five years.
Good News Is Good News Until it’s Bad
I am more of the opinion that the success of LinkedIn is due to the fact they own the niche of professional social media networking. Nobody comes close to doing what they do when it comes to making professional contact through social media. Nobody. I also credit the company for focusing on a business plan which includes a way for them to make money, something many social media companies put off until after they amass millions of users. This is fine if you have altruistic leanings, but if you are in it for the money (as most business people are) you should know where your next paycheck is going to come from.
All that being said, just because LinkedIn posted shockingly fantastic results this past quarter is no guarantee they will continue on that tack. In fact, as we all know, when it comes to business, anything can (and usually does) happen.
Of course, LinkedIn managers probably have a plan for that, too.
Business focused social media network Linked In posted profits ahead of projections, likely easing fears that the company was overhyped after its hot IPO this year.
The company earned $4.5 million, or 4 cents per share during its second quarter, beating out projections calling for a loss of 4 cents per share on $104.5 million in revenue.
“In the second quarter, we saw record levels of members, unique visitors, and page views, while revenue growth further accelerated,” said Jeff Weiner, CEO of LinkedIn. “Going forward, we plan to continue to invest in our team, technology, and products in order to increase the value we deliver to members and realize the full potential of the LinkedIn platform.”
The results injected enthusiasm into the stock, sending shares up by $7.46, or nearly 8 percent to $102.98 in extended trading on the New York Stock Exchange.
The results mark the first time the company has reported since going public in May this year. The company shares immediately doubled from their IPO price of $45 and have hovered around there ever since.
It’s also the most money the company has made in any three-period so far in its 8-year history.
Currently LinkedIn is the broadest most recognized network for business. It increased the number of members by 61 percent to 116 million during the second quarter, showing a healthy demand for business social networking.
But the news could also bode well for competitors looking to enter the space that LinkedIn has already proven.
Google+, the search-giant’s social network, has seen a meteoric rise, garnering over 10 million users just two weeks into its inception. But it also hinted that it will created an offshoot of the service geared specifically for professionals, saying its service would be “amazing” for business.
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