International Markets Key to LinkedIn’s Growth in Visitors

LinkedIn (NYSE:LNKD) saw record growth in its monthly unique visitors and page views last quarter resulting in 111% sales growth for its marketing solutions business which comprises display ads, branded groups and white paper recommendations. ^[1] The monthly unique visitors reached close to 82 million, an increase of 83% year-on-year, driven by introduction of new features to improve user engagement levels as well as persisting high unemployment rate that is encouraging people to visit LinkedIn for job search and networking.  LinkedIn mainly competes with social media firms like Facebook and online recruitment firms such as Monster (NYSE:MWW).

Another notable trend is the expanding LinkedIn user base in international markets like India, Brazil and Mexico. While Brazil is seeing the highest amount of user growth, India has the highest number of LinkedIn users.

While we estimate LinkedIn’s average monthly unique visitors will increase from 105 million in 2012 to 232.5 million by the end of our forecast period, Trefis members expect an increase from 134 million to 280 million during the same period. The member estimates imply an upside of around 10% to our price estimate for LNKD stock.

We currently have a Trefis price estimate of $34 for LinkedIn’s stock, which is well below the current market price.

Sluggish Economy & New Features Driving People to LinkedIn

In the last quarter, LinkedIn introduced several new features like LinkedIn Today, LinkedIn Swarm and LinkedIn Skill to improve user experience on its site and to also help improve the placement and relevance of ads. The overall sluggishness of the economy and stubbornly high unemployment rate is also driving people to search for jobs as well as network with other professionals on LinkedIn. According to a recent survey conducted by Lab42, an online market research firm, 32% check the site several times a week and 35% check it daily. ^[2] The survey also found that 42% of users update their profiles regularly and 81% belong to at least one group. This means that the users are participating in discussions and interacting with other professionals, recruiters, and companies and are seeing the ads there.

International Markets Key to LinkedIn

While the U.S. has around 44 million of LinkedIn users, the remainder of the 100 million+ are outside of the U.S. and the majority of its user growth in now coming from international markets like India, Brazil and Mexico. The fastest-growing country for LinkedIn is Brazil, with 428% growth yoy, followed by Mexico, India and France. ^[3] In another study by ComScore, The Netherlands has the highest Internet penetration for LinkedIn at 26% versus 21% for Ireland and 17.6% for the United States. ^[4]

Our complete analysis for LinkedIn’s stock is here.

1. LinkedIn Announces Second Quarter 2011 Financial Results [↩]
2. The Linkedin Profile, Lab42 Blog, July 11, 2011 [↩]
3. 100 million members and counting…, LinkedIn Blog, March 22, 2011 [↩]
4. The Netherlands Ranks #1 Worldwide in Penetration for Twitter and Linkedin, ComScore, April 26, 2011 [↩]