Professional networker LinkedIn (NYSE:LNKD.DL) recently announced that it would be adding Sponsored Jobs within its content feed. This comes shortly after launching similar Sponsored Updates a few months ago, which are off to a strong start. The company has taken heed of Facebook's mobile successes, and is following suit. Social media companies tend to borrow strategies from each other, and this is merely the latest example.
LinkedIn's marketing segment remains quite young, at just 24% of revenue last quarter. Other social players rely primarily on advertising, yet advertising is LinkedIn's secondary business. As the company grows its marketing segment, the gains provide incremental upside for investors while the core recruiting business continues to soar.
Some investors may be skeptical of LinkedIn's premium valuation, which is pricing in hefty growth expectations going forward. The company will need to prove itself as a true disruptor, or else investors could be in store for some pain.
In today's episode of Tech Teardown, Erin Kennedy discusses who's winning in social media with Evan Niu, CFA.
Erin Kennedy has no position in any stocks mentioned. Evan Niu, CFA, owns shares of LinkedIn. The Motley Fool recommends Facebook and LinkedIn. The Motley Fool owns shares of Facebook and LinkedIn. 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.
More from The Motley Fool
You Won't Believe What LinkedIn, Inc. CEO Jeff Weiner Said About College Degrees
His analysis may be both controversial and self-serving, but it still makes a ton of sense in today's job search market.
LinkedIn Could Get Banned in Russia
Will the professional network comply with data localization requirements?
Better Buy: LinkedIn Corporation vs. Match Group
Each internet stock has plenty going in its favor, so which one offers investors more long-term upside?