LinkedIn Turns a Dime while Google+ in Question With User Egagement
LinkedIn (NYSE:LNKD) may be the first publicly traded company of its social-media ilk to have reported a profit. Yesterday the professional social networking website topped expectations with its second quarter earnings. LNKD netted a profit of $4.51 million, or 4 cents a share, compared with $938,000 or 2 cents a share for the year-earlier period. Revenue was $121 million, up from $54.9 million. Analysts expected a loss of 1 cents a share on revenue of $104.5 million. The company reported the bulk of its revenue growth in sales of its hiring services and advertising. Hiring service revenue jumped by triple the last quarter to over $58 million, while advertising revenue brought in $38 million, and subscription to “premium services” was $23.9 million.
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The company also continued to increase its user-base, expanding to over 115 million unique users in the last quarter. Analysts question though whether the stock can maintain its current price level (at a very high multiple) without really starting to rev into gear in the next few quarters, especially with the market now showing signs of depreciation. Ken Sena, an analyst at Evercore Partners in New York who has a $70 PT on the stock, asks,“The question is how much revenue can they build among consumers, and I think they did a very good job demonstrating that they can…We’re already significantly bullish in our estimates, [But] we have trouble getting to a valuation that approaches near to where it’s currently trading at.”
Google + (NASDAQ:GOOG) is being paraded through tech and social media circles as the long-awaited answer to Facebook, exploding out from its launch with 10 million users and some rumored exponential growth charts, though one data collection group says that the upstart social network is waning quickly in popularity. According to data from Hitwise.com, Google+ visits fell about 3 percent to 1.79 million in the U.S. in the week ended July 23 from the prior seven days, they had risen 285% in the previous week. Crucially, the average time spent on the site in the week of the 23rd declined 10 percent to 5 minutes and 15 seconds. Google has touted the service as a potentially large part of the company’s future, though that outcome now seems less of a certainty. “We are seeing over 1 billion items shared and received in a single day,” said Google CEO and Co-founder Larry Page. “So while we still have a lot of work still to do, we are really excited about our progress with Google+.”