LinkedIn: No Rush To Mobile Monetization

linkedinFacebook’s stock jumped last month, once it began to generate real money from mobile advertising -- $150 million, or 14% of its total third-quarter revenue of $1.26 billion.
 
On its own third-quarter earnings conference call Thursday, LinkedIn said a quarter of its overall traffic now comes from mobile. The company, however, is just testing advertising and other initiatives to monetize usage on the mobile side. But in contrast to Facebook, its go-slow approach to making money from mobile has not caused a problem for LinkedIn on Wall Street.
 
The professional network boasting 187 million members posted strong financial results in the latest quarter, with revenue up 81% to $252 million, and adjusted earnings of 22 cents a share. Both figures beat analysts’ expectations. But the underlying difference is that LinkedIn is not mainly an ad-driven platform like Facebook.
 
It has a three-pronged business model, in which its hiring business, called “talent solutions,” is the largest- and fastest-growing revenue stream. That unit accounted for 55% of LinkedIn’s revenue in the quarter; it doubled revenue to $138.4 million as companies spent more on the site to recruit new employees.
 
LinkedIn’s marketing solutions business, including advertising and marketing, accounted for a quarter of overall revenue, while subscription-based services contributed about 20%. LinkedIn CEO Jeff Weiner reiterated that the company is taking steps to extend each of its three business lines to mobile.
 
“We are now showing jobs in our mobile apps, continue to test display ads on our iPad app, and are now enabling members to sign up and pay for premium subscriptions directly from their mobile devices,” he said during the conference call.
 
He also noted that the 25% of weekly traffic coming through mobile in the quarter is up from 13% a year ago. Asked during the analyst Q&A session how long before mobile monetization catches up with the desktop, LinkedIn CFO Steve Sordello indicated the company would ramp up those efforts in the next year.

Unlike Facebook, there is no urgency to speed up its mobile ad push.
 
“LinkedIn has executed well in its core business, and I think investors are willing to give the company some time to make sure they optimize the mobile ad experience based on the particular form factor -- smartphone, tablet, etc.,” said Tom White, an analyst covering the company for Macquarie Securities.
 
LinkedIn has the cushion of continuing high demand for its desktop inventory, easing the urgency to capitalize on its growing mobile audience, he noted.
 
Weiner also suggested that LinkedIn could make a smooth transition to the iPad in particular when it comes to advertising. “The larger amount of screen space affords us the ability to really leverage very similar marketing solutions that we see on the desktop."

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