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February 7, 2013 9:54 pm
Shares in LinkedIn rose by 10 per cent in after-hours trading, after the launch of several new features on the professional networking site produced quarterly results well ahead of expectations.
Earnings per share for the fourth quarter of 2012, after adjusting for certain items, came in at 35 cents – against Wall Street analysts’ forecasts of 19 cents – with revenues from recruitment advertising almost doubling year-on-year.
Total sales for the quarter were also ahead of expectations, growing by 81 per cent to $303.6m, LinkedIn said, with net income 67 per cent higher at $11.5m.
Jeff Weiner, LinkedIn chief executive, said the results followed a year of product innovation, after investment in its back-end infrastructure in 2011. “Members are becoming increasingly active on LinkedIn,” he said.
LinkedIn’s share price has risen by 33 per cent since its initial public offering in May 2011, in continuing contrast to the declines at most other internet companies that went public in the past 18 months.
Membership of LinkedIn surpassed 200m people at the end of 2012. The company said it was adding two members a second, with much of the growth from outside the US.
Mr Weiner said that as the company expanded into new markets, new opportunities opened up to broaden LinkedIn’s scope beyond its current focus of “knowledge workers” and higher-earning professionals, to attract new kinds of members and a wider range of potential job advertisements.
“Our vision is to create economic opportunity for every professional,” he said. “Much longer term, that’s where we want to be able to focus.”
Higher-than-expected profits throughout 2012 were reinvested in product engineering. As a result, the final quarter saw a faster rate of new product introductions than at any time since LinkedIn began.
Changes to the site during the period included a revamp of its profile pages and a new blogging platform called “LinkedIn Influencers” – used by prominent members such as President Barack Obama and Sir Richard Branson, the UK businessman – that boosted traffic. Page views have risen by nearly 70 per cent since its homepage was redesigned in July.
“2012 was a transformative year for LinkedIn,” Mr Weiner said. The company said it expects 2013 revenues of up to $1.44bn, which would represent a 48 per cent increase over 2012.
Mr Weiner said mobile development would be among LinkedIn’s investment priorities for 2013, alongside creating internal tools for enterprise customers, higher education and international expansion.
LinkedIn is already seeing strong growth in mobile usage, with 27 per cent of visitors coming via smartphones, compared with 15 per cent a year ago.
Many internet companies have struggled with the shift to mobile usage due to reduced advertising spending and opportunities on smaller screens, but LinkedIn’s subscriptions and recruitment businesses have helped to shield it from those pressures.
LinkedIn is piloting mobile-friendly advertising format, akin to Facebook’s “Sponsored Stories”, where brands can pay to promote status updates and other posts within users’ main timelines.
“What we’ve seen thus far has been encouraging,” Mr Weiner said, without specifying when it would launch. “We are going to be rolling out those same tests in a smartphone environment.”
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