With social networking companies like Facebook struggling with uneven stock performance, LinkedIn reported an 80 percent increase in share prices, profits and revenues.
Social networking companies have not been doing too well in the face of tough competition, and even a company as large as Facebook has been having problems with its stock performance. Amid all this, LinkedIn reported an 80 percent increase in share prices, profits and revenues. According to a report by Seattle Times, more than 200 million professionals joined LinkedIn in 2012.
According to Michael Pachter, an Internet business analyst at Wedbush Securities, selling access to talent is how LinkedIn earns maximum revenue. Because of this feature, the networking site has given recruiting and hiring a new face.
"It has absolutely changed the way that we do everything," said Martin Millington, senior vice president for human resources at Quantros, a Milpitas, Calif.-based health care technology company.
So what makes LinkedIn different from other job posting sites? In LinkedIn, instead of just posting a vacancy and waiting for responses, recruiters can actually search for potential employees who meet their requirements, view their professional connections and even contact them discreetly.
Though the company earns a part of its revenue by showing ads and selling premium features to members, more than half of its $1 billion annual revenue comes from employers and recruiters who pay for what LinkedIn calls its "Talent Solutions".
"Talent Solutions is our largest and fastest-growing business," according to Parker Barrile, a LinkedIn senior product director, who said more than 16,000 companies currently use the tools. While declining to discuss growth targets, he added, "We think we have a tremendous amount of headroom to reinvent the way people hire."
According to Pachter, the biggest advantage of LinkedIn is that unlike other networking sites, users don't have to log in to their profiles every day. However, they continue to keep their LinkedIn profiles active, as in current times there is no job guarantee and LinkedIn could prove to be a reliable backup.
