LinkedIn Revenue Surges Over Analyst Expectations; Stock Jumps

LinkedIn has announced that revenue has more than doubled in the last quarter and they’ve increased their 2012 revenues, and the stock has jumped accordingly.  The social network reported $167.7 million in revenue for the fourth quarter, beating the average analyst estimate of $159.8 million in the quarter.  The good news also comes at a time where people are piling into social media stocks, with Zynga hovering around 30% higher than it’s IPO price and LinkedIn now almost 200% over it’s $45 IPO price, placing it’s market cap at $8.67 billion.
The non-GAAP net income for the quarter was $13.3 million which represents an increase in profitability.  For the fourth quarter of 2010 the net income was $5.2 million.  LinkedIn earns it’s revenue from a variety of products.  They have Hiring Solutions, Marketing Solutions and Premium Subscriptions.  Looking at the fiscal report, we can see that revenue increased in all three areas.  A promising factor here is also that they are a diversified company: they are increasing revenue on all fronts.
Hiring solutions, which are their tools which help recruiters find solid candidates using the network, increased over Q42010 by 136% to $84.9 million.  Marketing solutions increased 77% to $49.5 million.  Revenue from Premium subscriptions increased 87% to $33.3 million.
This is incredible news for LinkedIn but also for the social sector as a whole.  It’s clear that revenue is a real possibility, and LinkedIn is demonstrating that.  Facebook’s IPO is gaining steam and recently broke the $100B valuation mark, and with news like this investors are all going to believe in the power of the network.  The one factor here is that LinkedIn is a professional network who have excelled at keeping their user base professional and keeping distractions out of the way — it’s a great place to find quality people.  LinkedIn also focuses on hiring products that they are explicitly selling to companies which is not part of Facebook’s arsenal at this point.
However, Facebook has Facebook credits in the wings, and if they’re able to launch that it could become a huge force on the web for e-commerce.  That may be a driving force that could help Facebook increase their revenues in place of having a specific product.
LinkedIn has also announced it hit 150 million members and is continuing to grow at a staggering pace.