Personal, business, class and even international – this trend crosses all boundaries.
While it is built upon the basic principles of human collaboration and friendship, this trend has been supercharged by the connective power of the Internet.
I am talking about networking.
Before the Internet, individuals had no choice but to meet face-to-face. This often restricted interaction to geographic locations and ingrained habit.
Sites like Facebook Inc (NASDAQ:FB) changed all that. And there is another social media opportunity that beats out even Facebook Inc (NASDAQ:FB). I’m going to tell you all about it. But first, I want to share with you my foray into social media.
I had just finished lunch with a friend from the University of Pennsylvania. When we parted, he asked if I was on Facebook Inc (NASDAQ:FB). “Facebook? What the heck is that?” I asked.
Remember, this was back when Facebook Inc (NASDAQ:FB) was exclusively for Ivy League universities. He explained that it was a great networking site for college students and others.
My friend pointed out that Facebook Inc (NASDAQ:FB) was more exclusive than Myspace or Friendster and required a “.edu” email to join.
“Not only that, but it’s going to soon expand to everyone and make the greatest stock investment ever,” he said. What he didn’t know was that there would be an even greater opportunity down the road. What is it? Well, it’s none other than LinkedIn Corp (NYSE:LNKD).
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| Flickr/Nan Palmero | ||
| Unlike Facebook, which disappointed investors with its IPO, LinkedIn is making its investors wealthy. |
Unlike Facebook, which mostly concentrates on the social purpose for the end user, LinkedIn Corp (NYSE:LNKD) is focused on professional/business networking with the socializing aspect as a secondary function.
Founded in 2002 in co-founder Reid Hoffman’s living room, the company has rapidly expanded into a leading social media company. Boasting more than a quarter-billion members with 65% outside of the United States, LinkedIn Corp (NYSE:LNKD) is the largest professional network in the world. Job seekers, deal makers, business owners, and all strata of management/worker positions are represented. In fact, new users are flocking to the site at a rate of two per second, according to company data.
This growth has recently sparked heavy investor interest in the shares. The stock price has exploded by more than 400% since 2010, doubling in value during 2013 alone. Unlike Facebook Inc (NASDAQ:FB), which disappointed investors with its IPO, LinkedIn Corp (NYSE:LNKD) is making its investors wealthy. Here’s why.
Revenues at Facebook are primarily derived from advertising. This makes the company vulnerable to the success of its advertisers. No one is going to continue marketing in a manner that doesn’t produce returns. LinkedIn Corp (NYSE:LNKD) relies on a more diversified revenue model that consists of approximately 30% advertiser, 35% premium subscription, and 35% job listings. This revenue diversification provides LinkedIn Corp (NYSE:LNKD) more “staying power” than a primary advertising-funded model. Facebook boasts an incredible 1.11 billion monthly users, which dwarfs LinkedIn’s membership. Despite the size difference, the upwardly mobile professional user base of LinkedIn creates a more powerful marketing platform than Facebook Inc (NASDAQ:FB)’s younger audience.
