LinkedIn Expands Its Job Listings Efforts With Standalone Job Search App

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LinkedIn

Building upon its recent efforts to increase the number of jobs listings on its website, LinkedIn (NASDAQ:LNKD) has now launched a standalone job search mobile app. This is an acknowledgement of the fact that while the company has disrupted the traditional hiring business, job listings are not going away. It is prudent of LinkedIn to make efforts to consolidate its position in this market. We estimate that recruitment services and job listings business constitutes roughly 50% of LinkedIn’s value, of which one third comes from job listings alone. Below we take a look at how the number of jobs listings and average price per job listing is trending for LinkedIn.

Our price estimate for LinkedIn stands at $134, implying a discount of around 20% to the market price.

See our complete analysis for LinkedIn

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Number Of Annual Job Listings Will Go Up Significantly

LinkedIn has seen tremendous growth in its user base in recent years, and going forward we expect this growth to continue, albeit at a moderated pace. When jobs are posted on LinkedIn’s website, the automated system gives several matches for the jobs posted. As the number of registered users increases, the system will generate better and more matches. Each user can forward jobs to candidates whom they think could be a match for the job posted. This will help in establishing LinkedIn as the preferred medium for posting jobs. Additionally, Monster.com’s share of job postings has been come down in recent years, which presents an opportunity for LinkedIn to grab this market.

Some of the biggest job sites such as Career Builder have more than 1 million job listings. Simply Hired, the world’s biggest job search engine, has more than 8 million job listings and 30 million monthly users globally. [1] It is fundamentally different from pure job listing sites as it partners with about 25,000 partner sites, including LinkedIn, and aggregates job postings across all of their partners. LinkedIn is now adopting a similar approach and expects to double its total job listings to about 700,000 this year. We estimate that the total addressable market for LinkedIn in terms for job listings could be somewhere between 3 million and 6 million. We believe that within the next five years, LinkedIn could easily capture a big share of it. Note that these are monthly listings and annual figure will be 12 times larger.

Average Price Per Job Listing Is Likely To Go Down

We estimate that the average price per job listing on LinkedIn declined from $170 in 2008 to $148 in 2013 due to a growing mix of jobs posted outside the U.S. and Europe where the prices are lower, partially offset by the increase in prices of certain jobs due to the economic recovery in the U.S. Going forward, we expect the average pricing to come down further.

LinkedIn continues to demonstrate strong growth in international markets. At the end of 2013, about 66% of the company’s total user base was international. Although LinkedIn is seeing immense success in developed markets, emerging markets offer good growth potential from a long-term perspective, and the absence of strong direct competitors will help the company continue its expansion. Since LinkedIn typically resorts to market specific pricing, the prices for job postings in emerging markets are much lower. As the contribution of these markets in LinkedIn’s overall business increases, the average price per job posting is likely to come down. Earlier this year the company announced that it has crossed 50 million members in the Asia-Pacific region. The flip side is that LinkedIn could establish itself as the preferred medium for posting jobs, thus gaining some pricing power.

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Notes:
  1. Simply Hired Crunchbase Profile []