Here's What LinkedIn Is Telling Wall Street About Its Ad Business [DECK]

jeff weinerLinkedIn’s Jeff Weiner

Photo: Flickr/The DEMO Conference

After LinkedIn disclosed its Q2 2012 earnings on Aug. 2, its stock popped from around $93.51 to above $112. It’s since settled at around $105, so Wall Street clearly saw something it liked in the numbers.But what?

Perhaps it was this short slideshow, which (among other things) summarizes key facts abound LinkedIn’s ad business and user base.

Although most people think of LinkedIn as a recruitment and career networking tool, it’s also got a nice little ad sales business going on. Around one third of LinkedIn’s revenues—$63 million in Q2—come from display ads and other “marketing solutions.”

If you include “hiring solutions”—what newspapers used to call the help-wanted ads—then ads and classifieds are 81 per cent of LinkedIn’s entire business.

More importantly, LinkedIn CEO Jeff Weiner and CFO Steve Sordello predicted total revenue could hit nearly $1 billion by the end of the year.

Take a look: We’ve edited out the boring bits, including the disclosures and the non-cash reconciliation, but you can download the unabridged version here.

Here we go!

Users are still growing, but traffic has actually flattened off a little.

Here's the revenue breakdown. Note that the ads/hiring/subscriptions split, and the growth of all three, is remarkably constant over time. This is what good management looks like: Consistent, predictable growth across the board.

Bad news: LinkedIn remains heavily dependent on the U.S. ... Good news: In theory, it has plenty of room to grow in foreign countries.

The split between the way LinkedIn generates revenues, via its sales force and online sales, is another aspect that remains constant over time. This is a low-drama company—and investors like that.

Here's how it all hits the bottom lines ...

And now here's the big number: $1 billion (almost) by the end of the year. That would appear to be well within LinkedIn's reach given that it just did nearly a quarter billion in revenues in Q2.

But wait, there's more ...

Here's some data on how advertising performs on LinkedIn ...

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