How LinkedIn is Driving Higher Engagement Levels

LinkedIn (NYSE:LNKD) has introduced a few new features to drive engagement levels. Over the last few months, the number of page views on LinkedIn’s site has increased at a faster rate than the number of unique visitors that visit its site each month. The higher engagement levels are important for LinkedIn, which is trying to grow its online advertising business to compete with Facebook, Yahoo (NASDAQ:YHOO) and Google (NASDAQ:GOOG) in this market. Ads and marketing business accounts for 28% of our $30 price estimate for LinkedIn stock. Our price estimate suggests that LinkedIn’s current market valuation is unjustified (see LinkedIn’s Valuation as Facebook of Recruiting Hard to Justify).

New Features Driving Engagement Levels for LinkedIn

Page views per unique visitor increased from around 24 per month in 2009 to 30 per month in 2010. We expect this growth to continue in 2011 and beyond.

LinkedIn recently introduced LinkedIn Today, which is a social news platform for professionals aimed at delivering the days top stories. The service surfaces the top headlines and stories being shared by LinkedIn’s network of professionals. ((LinkedIn press release, LinkedIn launches LinkedIn Today to deliver the news that matters most for professionals, March 2011))

LinkedIn also introduced Company Pages, which is a platform to help businesses attract customers using professional product and service recommendations. ^[1] It is a provision through which companies can showcase their products and services to professionals on LinkedIn. It will also help companies grow their business virally through word-of-mouth.

See our complete analysis for LinkedIn stock here

1. LinkedIn press release, LinkedIn Launches Powerful New Tool to Help Businesses Drive Growth Using Professional Recommendations, November 2010 [↩]