LinkedIn Corp. (NYSE: LNKD
) Share price YTD:
It could easily be said that LinkedIn is the most successful of all the Web 2.0 initial public offerings. That universe includes Groupon Inc. (NASDAQ: GRPN
), Zynga Inc. (NASDAQ: ZNGA
), Facebook Inc. (NASDAQ: FB
) and a number of other smaller companies. While the shares of many Web 2.0 stocks have dropped since they went public, LinkedIn shares trade at $114, trouncing its IPO price of $45. Weiner joined LinkedIn as interim president in 2008 and was made CEO in June 2009. More recently, at the end of the third quarter, the company had 187 million members worldwide. LinkedIn has done a strong job in monetizing its user base. Third-quarter revenue rose 81% to $252 million. EPS was $0.02, up from a loss of $0.02 in the same quarter a year ago. The primary reason Wall St. is enamored with LinkedIn is that it has more than the single revenue stream, such as many Web 2.0 companies do. LinkedIn has three money-making products: the recruiter-centric Talent Solutions, which accounted for 55% of revenue in the most recent quarter; the advertising platform Marketing Solutions, which accounted for 25% of revenue; and Premium Subscriptions from those with LinkedIn profiles. Wall St. might argue that the business model has made Weiner’s life as CEO easy. The remarkably poor management at companies such as Groupon and Zynga proves that is not the case. Even with a strong model, execution counts.
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