In a tough IPO market, LinkedIn (NYSE:LNKD) has been quite resilient. Coming public in May at $45, the stock now trades at $85.76. No doubt, the company has been a standout when compared to other dot-coms like Pandora (NYSE:P) and Demand Media (NYSE:DMD).
LinkedIn is one of the first movers in social networks for professionals. It now has more than 115 million members, and it has more than 81 million monthly unique visitors.
And the financials definitely have been strong. In the latest quarter, LinkedIn posted a heady 120% increase in revenues to $121 million. It even had a profit of $4.5 million and EBITDA of $26.3 million.
Great, huh? In a tough economy, it’s these kinds of numbers that always get investors excited.
But something else always emerges — that is, competition. While the environment is much more intense for consumer social networks like Facebook and Twitter, LinkedIn still is seeing new startups vying to grab a piece of the growing market.
For example, this week, Identified launched its service. Essentially, it is integrated into Facebook and allows you to improve your professional profile as well as search for jobs.
Identified raised $5.5 million in its most recent funding. While this is a relatively small round, the investors are top-notch. They include Tim and Bill Draper, Google’s (NASDAQ:GOOG) Eric Schmidt (who has his own investment firm) and Facebook’s Chamath Palihapitiya.
Identified already has processed huge amounts of data from Facebook to create professional “scores” for more than 40 million people. If this score is fairly low, your job prospects might be lacking. So to improve things, you can add more content to your Facebook profile. It could be as simple as putting in your job history and other professional background details. What’s more, it is a good idea to have high-impact friends on Facebook.
To make money, Identified will provide recruiting services to corporate clients. The company already has customers including Walt Disney Co. (NYSE:DIS) and MTV, who realize Facebook is a wide net with which they can find talented employees.
Identified is not the only innovative player trying to grab LinkedIn’s market. Other upstart companies like BranchOut and TweetMyJOBS leverage social networking platforms like Facebook and Twitter.
But how much of a threat are these companies to LinkedIn? It’s still too early in the game to tell. For the most part, LinkedIn has many key advantages, such as its brand and massive user base, making it difficult to get people to switch to these alternatives. LinkedIn also has a head start with data analysis, and the result has been lots of traction with corporate customers and advertisers.
Yes, perhaps during the next couple years, emerging rivals will make a dint. That’s reasonable. But until then, it seems likely that LinkedIn will remain the dominant player in its space.
Tom Taulli is the author of “All About Short Selling” and “All About Commodities.” You can also find him at Twitter account @ttaulli. He does not own a position in any of the stocks named here.
