LinkedIn Beats The Street In First Quarter As A Public Company; Revenue Up 120 Percent To $121M
For the first time as a public company, professional social network LinkedIn is reporting its first quarter results today. LinkedIn's revenue for the quarter came in at $121 million …
Context & Ripple Effects
This is the first market test of the blockbuster May IPO that priced at $45, opened at $83, and closed its first day at $93.86 for an $8.9 billion market cap on heavy investor demand. After such a debut, the question hanging over the stock was whether LinkedIn could justify the premium once real numbers replaced hype.
First-order effects
- Investors who paid up to $93.86 in the May debut get confirmation the valuation tracks fundamentals: $121M in revenue, double the year-ago figure, beats Street expectations in quarter one.
- CEO Jeff Weiner, giving same-day interviews on the results per Fortune's pickup, now operates under quarterly public-market scrutiny for the first time.
Second-order effects
- Coming weeks after LinkedIn passed Myspace in U.S. traffic to become the No. 2 social network in June, the beat strengthens its hand against larger rivals for professional-user attention and advertiser budgets.
- The April full public opening of LinkedIn's JavaScript platform for 'building the professional web' gives the company a second growth lever beyond ads and subscriptions that private competitors lack.
Third-order effects
- As the first major social network of the 2011 vintage to report as a public company, LinkedIn sets the template its peers will be judged against: consumer-social valuations now hinge on demonstrated revenue growth, not audience alone.
- If the platform-plus-recruiting-data model keeps compounding, professional identity becomes a distinct monetization layer of the social web, separate from personal-social advertising.
The trend: Social networking companies entering the public markets in 2011 are being repriced from growth stories into quarterly-revenue performers, with LinkedIn as the class's first proof point.