LinkedIn Corp (NYSE:LNKD) is a company that possesses strong underlying fundamentals and key metrics. In Q1, revenue was $324.7, a whopping 72% increase from the prior year. The company’s three business segments (Talent Solutions, Marketing Solutions, and Premium Subscriptions) each comprise healthy percentages of the total business. The company continues to launch new products, including a new version of its smartphone applications; Contacts, a new contact management system; and products that enrich LinkedIn’s content system — including the ability for members to include rich media in their professional profiles, and content “channels” that give users the ability to follow a myriad of professional subjects they might be interested in.
LinkedIn’s current stock price is above $180 — a whopping 58% increase year-to-date. While the price is justified given LinkedIn’s track record of proven management execution, some may consider it to be overinflated. As such, it would be advisable to exercise patience by watching the price over the second and third quarters to determine the best entry point.
Google+: Not a Significant Social Network Player
Though not as innovative as Facebook Inc (NASDAQ:FB) and LinkedIn, Google Inc (NASDAQ:GOOG) has made some admirable strides in the social networking arena. Google has the ability to integrate Google+ (Google’s social networking site) into its wide array of other services, for the purposes of simultaneously enhancing the entire user experience. Google+ also integrates other services such as “Profiles,” “Hangouts,” and “Sparks,” and boasted 400 million users at the end of last year.
While it may seem like an easy win for a large and successful powerhouse such as Google, and thus a ripe opportunity for the company to capitalize on its extensive network of websites, the distinct social and professional networks that Facebook and LinkedIn have built make it difficult for a third competitor to enter. Therefore, purchasing Google stock on the basis that their social platform, Google+, will be revenue-generating should be avoided.
Conclusion: Buy Facebook, Wait to buy LinkedIn, Avoid Google+
Numerous factors indicate that it is an opportune time to buy Facebook, wait on the sidelines to buy LinkedIn, and discount Google+ as a driver behind Google’s stock price. Facebook Inc (NASDAQ:FB) is investing pragmatically in the right areas; judging from the carefully targeted advertisements served on the current News Feed and elsewhere, it is evident that Facebook has a clear and ripe monetization opportunity that is not yet clearly understood. In addition, proven profitability and a continuously growing user base show that the company is slowly and surely proving they are capable of execution just as much as attracting new users. LinkedIn, on the other hand, also represents a company with a great track record of management execution and a solid monetization plan; however, it is no secret that the company has great potential, and therefore should be watched before making any investment. Overall, it is clear that internet networking is surely an interesting sub-sector of the technology arena to watch, and Facebook and LinkedIn both represent unique opportunities to take part in the space.
The article Facebook’s Opportunity originally appeared on Fool.com and is written by Colin Tweel.
Colin Tweel has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google, and LinkedIn. The Motley Fool owns shares of Facebook, Google, and LinkedIn. Colin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
