LinkedIn Corp. (NYSE:LNKD)

CAPS Rating: 2 out of 5


Player Avatar adamlevy (71.58) Submitted: 1/7/2013 3:35:02 PM : Outperform Start Price: $112.81 LNKD Score: +63.82

Unlike most social networking sites, 75% of revenues come from subscriptions. Recurring revenue businesses are great because they provide a reliable base for the company to grow sales on.

Furthermore, in the last six months, the company has drastically improved user engagement, the number of visitors to the site, and the number of pages a user will look at per visit. This implies greater revenues from advertising (for which they get paid per impression and not per click) as well as likely higher conversions to premium subscriptions.

As user engagement grows, it's likely to increase sales of it's Talent Solutions service for employers looking to use LinkedIn's network to find job seekers with the proper qualities and qualifications for their open position.

Finally, there's plenty of opportunity for LinkedIn to create new revenue streams with the large amount of data it collects from its users.

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