LinkedIn gets a lot of grief from the technology press, and even from many of its own members, for being unpleasant to look at, difficult to use, and generally irritating. There was more than a little Schadenfreude when the company was fined recently for sending its users too many emails.
But none of that seems to stop the corporate social network from making money. In the most recent quarter, in fact, LinkedIn made a lot more than analysts were expecting. On Thursday, it reported an adjusted profit (which excludes certain expenses) of 78 cents per share in the third quarter. That handily beat analyst expectations of 45 cents.
The news pushed LinkedIn’s share price (LNKD) up more than 12% in after-hours trading at one point. Its stock is still well below where it was in May—just before the company cut its earnings outlook dramatically, due to a downturn in the display advertising market—but it is doing much better than some of its social media peers including Twitter (TWTR).
LinkedIn’s main strength is that, unlike Twitter and many other technology and social networking companies like Facebook, it doesn’t rely solely on ad revenue. The biggest part of its business is what it calls the “Talent Solutions” unit, which charges corporate recruiters to connect them to job candidates.
That part of the company saw revenues climb 46% in the most recent quarter, and LinkedIn said it now has 4 million active jobs, up from just 1 million last year.
LinkedIn’s overall revenues rose 37% to $780 million, compared with analyst expectations of $755 million. They got a boost from the company’s recent acquisition of Lynda.com, an online-education portal that LinkedIn bought for $1.5 billion in April. LinkedIn CEO Jeff Weiner said on the conference call that the company plans to continue integrating Lynda’s online courses into its network.
Weiner also said that LinkedIn is working hard to boost the mobile side of its business, which has been lagging for some time, due in part to a lackluster app. The LinkedIn CEO said the company’s new streamlined and redesigned mobile app is rolling out, and mobile usage has already climbed to the point where it now represents 55% of overall usage, up from about 40% last year.
The web version of the network is also being redesigned, Weiner said, to incorporate some of the changes that are coming to the mobile app. That includes a redesign of the traditional email “inbox” so that it is more like a messaging app.
On the advertising side, LinkedIn said the ad business continues to weaken, particularly the display-advertising part, which fell another 30% in the latest quarter. Luckily for the company, it has other lines of business that it can rely on that are growing strongly. And as long as those continue to outperform estimates, LinkedIn will continue to look a lot better than many of its fellow tech stocks.
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