LinkedIn Allows Companies to be More Social with ‘Company Updates’
LinkedIn (NASDAQ:LNKD) continues to come up with simple yet effective ways to drive user engagement higher. With the latest addition of ‘company status updates’, [1] the professional networking giant hopes to enhance a company’s page on LinkedIn by allowing updates. This is a nice move that allows the company to now communicate regularly to followers be they exiting employees, customers or just fans of the company. In other words it can now participate in the social media side of corporate networking and follows in the footsteps of the popularity of its groups function, which allows users to add updates and engage in dialogue. LinkedIn competes with other online job portals such as Monster (NYSE:MWW) and Craigslist. It also competes in the online advertising space with Facebook, Yahoo (NASDAQ:YHOO) and Google (NASDAQ:GOOG).
See our complete stock analysis for LinkedIn’s stock here
Takes Cues from Twitter and Facebook
The concept of a “company status update” treads on the fine line between social and professional networking. With the ability to receive company updates on relevant job opportunities, company seminars and relevant breaking news on the company, this feature has 2 significant advantages. Firstly, it provides employers a tool to interact with interested candidates in much more direct manner, facilitating a higher degree of communication between LinkedIn’s 110+ million subscribers and the 2 million companies on it. Secondly, much like Facebook and Twitter, the phenomenon of users “following” others on a network could lead to higher levels of engagement, which translates to higher page views for LinkedIn’s online advertising business.
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We currently hold a price estimate of $34 for LinkedIn’s stock, which is well below the current market price. Refer to our article Why LinkedIn’s Fundamentals Don’t Support the Market Price on why we think the market is getting ahead of itself on the company.
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