linked in IPO, analysis of potential growth in comparison to monster.com

Posted on May 20, 2011

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the linked in IPO has been amazing. firstly, it shows the strong market demand for the digital media business models and for company’s that have executed well over time. This will create a lot of excitement for future IPOs and a lot of investor exuberance (did anybody say bubble?). linked in is stll relatively unknown as an advertising platform and not very actively used (especially in SA and similiar markets) so there is a lot of upside that it can benefit from over time which should work in investors favor. on the recruitment advertising side, its a good offering and well aligned to a global skills shortage that isnt going away in the near future. with the cost of recruitment so high, the ability to find new talent more cost effectively is very attractive and should become a richer revenue area for the company. if one looks at recruitment site monster.com. revenues for the quarter are higher than linked-in’s for the year, showing the room for growth from existing market demand.

($’s in millions, except per share amounts)
Second Quarter    Full Year
2011                2011
Bookings                    $250-$260          $1,191-$1,241
Year Over Year Change 20%-25%       20%-25%

Revenue (non-GAAP) $258-$269      $1,103-$1,149
Year Over Year Change 20%-25%         20%-25%

so the opportunity for linked-in to reach the $1Billion mark in revenues from everything it has to offer over the next 24 months is quite strong.

see also, how much is a user worth, analysis of revenues for social media and advertising networks

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