LinkedIn Proves Some Social Media Sites Are Better Than Others As 3Q12 Earnings Beat Estimates

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LinkedIn Proves Some Social Media Sites Are Better Than Others As 3Q12 Earnings Beat Estimates:

LinkedIn, the largest social media networking site for professionals is proving the social media sector isn’t dead.  Social media is now becoming differentiated as the sector grows and investors focus on sites aside from Facebook.  The social networking sector is now much broader with sites like LinkedIn combining the profitability of Monster and Twitter into one site, along with review sites like Yelp and Spotify radio which has grown based on Facebook integration.

The poor U.S. economy is also helping LinkedIn as more people look to extend or exploit their professional network to get employed. LinkedIn is making more money by sales to recruitment firms and the company estimates full year sales will be upwards of $915 million to $925 million which is an upgrade from the $880 million to $900 million that was projected in May.

LinkedIn’s shares rose 15 percent today above $107.35 at 2:35 pm EST.  Facebook shares were also up as a result of the positive sentiment in the social media sector after Yelp beat earnings expectations this week even though it was reported yesterday that over 8.7 percent of Facebook users are fake.

LinkedIn won’t have the fake account profile problem Facebook has and it also boasts a more educated user base with better income on average.  LinkedIn is extremely popular overseas and will continue to grow worldwide as Facebook’s growth rate tempers.  LinkedIn is becoming even more social, the company added new tools to increase user engagement such as commenting and liking as well as a new feature that allows users to see what’s trending in their network.

Facebook recently announced that it will be adding LinkedIn capabilities but this may not work well and similar efforts by the company in the professional networking space have been lackluster.  Users may want to keep professional and family networks completely separate – advantage LinkedIn.

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