LinkedIn Remains a Buy

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

LinkedIn CEO Jeff Weiner recently gave a presentation at the Citi Technology Conference. What investors learned is that LinkedIn is still worth buying because of the growth opportunities it has ahead. LinkedIn’s Hiring Solutions business serves an estimated $27 billion market within the $85 billion total market. It has more than 12,000 corporate customers, and that number is growing fast. It raised the price of a recruiter seat from $6,000 to $8,000 last year and, as it builds functionality, it has the opportunity to raise prices in the future. There are more than 2 million active company profiles on LinkedIn, and these are rich sources for business connections and targeted marketing. Just as it is for Google and TripAdvisor, selling ads is a lucrative and growing business. And LinkedIn is working to create more ways to engage its members. Management believes that the higher the engagement level, the more data available, and the richer the content that can be created, causing folks to stick around. LinkedIn is changing the way people manage their careers. Its growing network is becoming more valuable, despite competition from Monster Worldwide and Oracle’s Taleo. And, despite what looks like ridiculous multiples today, the company is attractive relative to its future prospects, and still worth buying.

 

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David Meier has no positions in the stocks mentioned above. John Reeves owns shares of Google. The Motley Fool owns shares of Google, LinkedIn, Oracle, and TripAdvisor. Motley Fool newsletter services recommend Google, LinkedIn, and TripAdvisor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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