Where LinkedIn Soared and Stumbled This Quarter
Every quarter, LinkedIn management points out four of its top priorities as a business during the earnings call. Two of those -- talent and technology -- focus on having the right people and building the right tools internally. These priorities skew long-term and align with the company's goal of building the best networking tool for professionals around the globe.
The other two priorities revolve around the product, the members, and, ultimately, the money. For investors, the quarterly report can shed light on how LinkedIn is doing in terms of creating a product that members love in a scalable manner. Here's a look at LinkedIn's member growth in the third quarter compared with recent quarters:
LinkedIn's Member Growth Infographics
LinkedIn's member growth soars
LinkedIn added approximately 21 million members to reach 259 million members worldwide during the most recent quarter. The rate of growth in this department hit 39% year over year, slightly higher than the average growth of 36% in the prior two quarters.
On the whole, this is an impressive jump in a metric that's crucial for LinkedIn. Membership growth enhances one of LinkedIn's current competitive advantages -- its network effect. As LinkedIn's network expands, it increases the value for all users, and so on and so forth. LinkedIn's stands tall above its peers with the world's largest online professional network but nonetheless has bold ambitions. From CEO Jeff Weiner's perspective, LinkedIn's vast and growing network of professionals will entice more businesses to use its recruiting solutions.
For example, LinkedIn added 1,745 business customers in the third quarter, compared with 2,118 customers added in the second quarter. Today, LinkedIn has more than 22,000 business customers in recruiting solutions, but Weiner believes the market potential is north of 300,000 customers. That could take some time, but posting back-to-back growth rates of 65% and 57% year over year shows LinkedIn's on the right track.
Where LinkedIn stumbled
Drilling deeper into membership engagement, LinkedIn posted lackluster growth in two different categories. Unique visitors to the site, at 142 million, came in shy of last quarter's 143 million, according to comScore. Meanwhile, comScore revealed that LinkedIn's page views dropped from 11.7 billion to 11.6 billion. Notice these are subsequent-quarter comparisons, however, and both unique visitors and page views grew about 30% year over year.
LinkedIn has been investing heavily in all types of tools to boost user engagement, page views, and unique visitors, including the ability for users to add rich media content to their profiles. The site has also touted its LinkedIn Influencer posts, which drive traffic to articles from thought leaders in a variety of fields. Given those investments, it's slightly unusual to see a dip in traffic to the site compared with last quarter's numbers. However, this fractional decrease could also be due to seasonal online trends that affect a variety of websites during the summer months.
So, while LinkedIn's new member growth is soaring, the company stumbled ever so slightly in attracting new site visitors and keeping them actively engaged. Maybe they were on vacation enjoying the warm weather. Or perhaps it will take a bit more time for LinkedIn to become the destination site that it wants to be. Either way, the company continues to move the needle on the metrics that really matter for long-term investors.
What the future looks like for LinkedIn
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The article Where LinkedIn Soared and Stumbled This Quarter originally appeared on Fool.com.
Isaac Pino, CPA, owns shares of Google and LinkedIn. The Motley Fool recommends and owns shares of Facebook, Google, and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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