LinkedIn didn’t so much beat Wall Street’s financial expectations, it shattered them.
The company earned 35 cents per share on revenue of $303.6 million. That was $24 million more than the average of analysts’ estimates and more than $11 million above the most optimistic projection. The average of their earnings estimates was 19 cents a share.
The numbers released this afternoon show LinkedIn brought in more total revenue for the year than did Monster and its fourth-quarter recruitment revenue alone was 90% above the same quarter in 2011.
LinkedIn said it expected to see between $305 million and $310 million in revenue for the current quarter and between $1.41 and $1.44 billion for the year.
Recruitment is the biggest share of the company’s overall revenue, accounting for 54% last year. That share may rise this year; beginning in the second quarter, the company will raise rates for its recruitment customers in the U.S. and some other areas. The increase will be in the “mid single-digits,” CFO Steve Sordello said during a conference call with investment analysts.
Employers will see the increase when their contracts renew, which, Sordello said, mostly occur in the last quarter of the year. He said it will be the first increase in recruitment rates since the company went public almost two years ago.
Since then, both the number of users and their engagement with the site has grown exponentially. Sordello and CEO Jeff Weiner credited the introduction of new offerings and enhancements during the year for improving the time users spend on the site and their interaction with it.
LinkedIn grew to more than 200 million members at the end of last year, adding users at a rate of about two new members per second; 64% of members now come from international markets. In the fourth quarter, after launching the new profile designs, the number of users updating their profiles doubled over the same period in 2011. The LinkedIn Today traffic, augmented by the new Influencers feature, lead to an eight-fold increase in traffic there, the company said.
Weiner said no one product is responsible for improving user engagement, instead it’s a “compounding effect,” where each enhancement leads to ever greater use of the site. In addition, both he and Sordello said more and more users are accessing the site on mobile devices. Right now, LinkedIn is testing a new mobile platform that will launch later in the near future.
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Steven Rothberg Feb 8, 2013 at 10:19 am
These guys are really firing on all cylinders. A 5% or so price increase every few years doesn’t seem at all excessive to me given how much more value they’re delivering today than they were a few years ago.
Stephanie McDonald Feb 8, 2013 at 10:28 am
Pricing themselves out of the startup market however. That’s an entire recruiting budget for my clients. It’s fine, I can find other tools to use or methods to connect but I miss having full LIR.
Casey Robinson Feb 9, 2013 at 9:12 am
Stephanie, you can use LinkedIn for free without having to pay the access charge to view profiles, connect with me @ csrobinson86@gmail.com I can email you the steps, or anyone who desires to know.
Keith Halperin Feb 9, 2013 at 12:55 pm
@ Casey: I’d like to know this, too….
@ Everybody: If you’d like me to connect you with the folks who’ll provide the direct contact information for LI Profiles (you provide them or *they provide them) for $150, then $1.50 each, please contact me.
Cheers,
Keith keithsrj@sbcglobal.net
* However, they don’t have LI Recruiter- they use the web.
Jeff Weidner Feb 10, 2013 at 11:28 am
IMO the rate increase is completely unjustified.
Kenexa is an RPO (recruitment process outsourcing) company and we have several hundred licenses that we buy. Our licenses are expected to increase 300% next year. yes that’s right 300%. The way our current SLA’s are written we can’t pass those costs on to the client and we can’t act as a third party reseller. We will either be A)stuck absorbing those costs or B) dropping user licenses. Guess which one will happen?
Why is this unjustified?
1) FIRST and foremost there are NO RESUMES.
2) the avg user on Linkedin logs in about once every 2-3 weeks.
3) potential candidates don’t respond to inmails in a “timely manner”. Why? because A) they are inundated with inmails and B)they only log in once every 2-3 weeks.
4) OK, no resume, what about contact information. 90% of people on Linkedin don’t have a valid phone or email address in their profile that is visible. Sure I can hunt it down but then I either have to spend time or money doing that. If I’m going to spend 300% more I want to be able to contact the candidate immediately on my own terms not Linkedin’s.
5) Their reporting is severely lacking. Screams for an OFCCP audit.
that’s just the top 5 I thought of, I could go on an on. Now our contract is up at the end of 2013. If our search licenses go up by the amount projected on their pricing sheets I guarantee you we will be dropping about 250 Linkedin search licenses.
The VALUE is NOT there to justify this increase.
We’ll shift our focus to the job postings slots, PPC and inmail campaigns if needed. I will reallocate budget somewhere else.
Jeff Weidner
Global Director Sourcing Science
Kenexa, an IBM Company
Keith Halperin Feb 10, 2013 at 1:32 pm
@ Jeff. Very well said. Until tens or hundreds of thousands of other recruiters start quitting and/or there’s a viable, cost-effective alternative, LI will probably continue to rationally act like the near-monopoly they are and squeeze every last penny out of us that they can.
Cheers,
Keith
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Sean Kent Feb 11, 2013 at 9:54 am
@Jeff – agree 100% (or should I say 300%?) Same situation here. Perhaps the most surprising thing, however, is LI’s willingness to bet that most RPOs will play ball. I think they will be in for a surprise.
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Carol Schultz Feb 11, 2013 at 11:49 am
John: Thanks for the interesting update.
@Keith: Your last comment is on target i.e. LI being a monopoly.
Let us not all forget that LI is just a gussied up database of names…
Keith Halperin Feb 11, 2013 at 8:27 pm
@ Carol. Thank you. As we know, it’s not what they’ve got for you, but how what they’ve got you by that often matters.
Think I’ll stop right here with this…
KH
Richard Araujo Feb 13, 2013 at 11:53 am
I’m glad they’re raising their rates. It will just spur more competition from firms who will deliver similar products, likely even better products. All the objections/issues raised above are why we did not opt to upgrade to LI Recruiter. It’s a lot of marketing hype and they do have the market more or less cornered right now, but they’ll only keep that position if they actually deliver something of value over time. I think many companies are going to realize, over the long term, that having a hyped up phone book without any actual phone numbers or solid contact info in many cases is a great tool to have, for passive recruiting. However, it isn’t worth the price they’re charging, and not as much help, when you realize the majority of your positions that need filled don’t require the level of recruiting for which this type of tool would be used.
Keith Halperin Feb 13, 2013 at 2:13 pm
@ Richard. Well-said. I may have mentioned that I’ve found some folks who will get you the direct contact info (phone and email) on up to 100 LI Profiles (you find or they find) for $150, then it’s $1.50 each… There are other companies that will do this in a monthly basis.
A thought experiment:
Folks could LI Recruiter be worth it at its increased price if IT included direct contact info?
Cheers,
Keith
andy nick Feb 14, 2013 at 9:59 pm
@Keith – if LI had contact info, wouldn’t that make it equal to Monster, CareerBuilder, etc. (well, except the lower website traffic on LI)? Hey wait…I’ve already forgotten why are they more expensive than Monster or CareerBuilder to begin with?
Richard Araujo Feb 15, 2013 at 7:52 am
@Andy: It’s a better overall interface much more geared towards recruiters and networking. I don’t think that justifies its current cost, but that’s why. For example, the hyperlinking of company names in profiles (essentially the members’ resumes) is interesting and useful, and it’s interesting and productive to go through those links to see all people on LI at a certain company. Often you’ll find interesting contacts to make and that are either immediately useful or worth keeping for future reference.
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andy nick Feb 16, 2013 at 11:10 am
@Richard – I’ll agree it has useful information and can help you become somewhat “connected” in an industry. However, if you are talking about hiring someone now or even in the semi-near future…it doesn’t seem to be the best source. And it’s more expensive than better sources. The bottom line is that it sounds like many of us agree that LI is over-hyped and overvalued.
Richard Araujo Feb 16, 2013 at 11:26 am
@ Andy: I agree. I think the ultimate problem is you have to get more and more people to buy in to such a solution before it becomes valuable. LinkedIn has the corner on the market for simply getting in on it with its interface and tools early on. I think its main competition will come soonest from social media websites which already have a large user base pushing ‘resume’ apps and extensions for people to use. The problem I see that would limit that is people want to keep a separation between business and personal, LI has that perception built in already. As such I think they’ll be the only game in town for a while until someone finds a way to leverage the membership of a site like Facebook without crossing the line between business and personal sites.
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Maurik Dippel Apr 21, 2013 at 3:42 pm
@everybody. Li’s monopoly and many interviews with internal/external recruiters inspired us to found Katch. Katch enables just-in-time feedback from your professional network, building your reputation, a vetted one this time. We will easify the way to connect to the best talents in the market, based on vetted info about their top qualities. Feedback is given by means of a score between +1 and +100 and a personal note. Personal notes will stay personal: it’s a tip, an advice, etc. Scores build up a reputation, that can be unlocked and shared with others to view.
If you serious about Li’s monopoly, then give Katch a serious chance. We launched at multiple large org’s already and with multiple recruiters.
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