During LinkedIn’s second-quarter earnings call Thursday, chief executive officer Jeff Weiner announced that new-member registration via mobile devices was up 5% over last quarter and accounted for 15% of all new-member registrations, up from 10% the prior quarter. The increase, Weiner suggested, may be due to a redesign of LinkedIn’s mobile app that makes it easier for professionals to join the network.
LinkedIn may be adapting to the move to mobile better than its social-media peers. The company reported a second-quarter, year-over-year earnings increase of 89%, according to CFO Steve Sordello. At the same time, the number of LinkedIn members grew to 174 million, up 50% year-over-year and 8% from the first quarter. More than twice as many of those members (23%) used LinkedIn’s mobile apps in the second quarter compared with the first quarter.
LinkedIn’s iPad app, released in April, was “extremely well received,” Weiner explained, with more than half of LinkedIn’s mobile page views generated by updates, news, and groups, which he called “encouraging signs of engagement.”
But as more and more members begin to visit the service through mobile devices, the company could begin to face problems generating revenue from those users, as advertising spending on mobile platforms in the United States is “much lower than it should be, given mobile usage,” says Internet analyst Mary Meeker. No social-media company has quite figured out what to do about that.
Facebook is currently suffering from that exact problem. A 10-Q filed by the company in July showed a 23% increase in its mobile traffic from March to June. In fact, 19% of the site’s 543 million average monthly mobile users never visit the site from their desktops. And because Facebook’s mobile advertising revenue doesn’t generate income to match its desktop version, the company loses revenue with each user who goes mobile.
LinkedIn launched its first mobile monetization test in June. Blue-chip brands such as Shell began running display ads within the company’s iPad app, and Weiner reported seeing a “healthy demand” for continuing the pilot program. LinkedIn’s goal, he said, is to monetize its mobile presence across all three product lines — hiring, marketing, and premium subscriptions — in addition to advertising. LinkedIn’s ability to generate income outside advertising is where it may have a leg up on Facebook.
“I think first it’s important to recognize,” said Weiner, “that when we talk about mobile monetization, it goes well beyond the advertising, which I know continues to be a hot topic with regard to digital media models.”
By bringing its multiple sources of revenue to mobile, LinkedIn may be able to avoid another difficulty Facebook is currently navigating: driving customers away with too many ads within the user’s feed.
In June Facebook began surfacing ads in its mobile newsfeed. Facebook executives, however, admitted to being worried that the crowding could begin to irk users, according to a recent report.
Weiner stressed that LinkedIn wants to “make sure that if we’re going to be introducing advertising into the feed itself that it is going to be creating value for the entire ecosystem.”
LinkedIn’s multifaceted business model is a likely explanation for its stock’s resilience compared with shares of Facebook and other social-media companies like Groupon and Zynga. However, it remains to be seen whether LinkedIn’s bread-and-butter offerings — its recruitment and hiring services — will translate successfully in a mobile setting.