LinkedIn Engagement Weakens But Its Ad Business Keeps Growing

LinkedIn fourth quarter and full-year earnings are out. The company posted strong revenues, driven largely by its ad business. User growth slowed and engagement declined slightly.

LinkedIn grew total membership 7% to 277 million. 70-per cent of new LinkedIn members in 2013 came from outside the U.S., management said on the earnings call.

Monthly unique visitors averaged 187 million in the fourth quarter, an increase of just 3 million over the previous quarter.

Page views, an important engagement metric for mature Web properties, fell 9% to 10.6 billion. This represents the largest quarterly decline in page views ever reported by LinkedIn.

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A decline in page views indicates that existing LinkedIn members are spending less time browsing the professional social network. We observed a similar phenomenon with Twitter in the fourth quarter.

Despite weak audience growth, and the enegagment decline, LinkedIn still increased revenues 14% sequentially in the fourth quarter. Marketing Solutions, which is what LinkedIn calls its suite of ad products, increased revenue 29% over the previous quarter. Marketing Solutions accounted for 25% of LinkedIn’s total quarterly revenues.

Meanwhile, Talent Solutions — LinkedIn’s suite of talent search products for recruiters — grew revenue 9% in the quarter, and accounted for 55% of total quarterly revenues.

Premium Subscriptions, which give users access to more features on the social network, generated $US88 million in revenue in the fourth quarter, 10% more than it generated in the third quarter. Premium Subscriptions accounted for 20% of total quarterly revenues.

LinkedIn also announced that it had acquired data mining and artificial intelligence firm Bright for $US120 million. On the earnings call, company management said Bright’s technology will be used to perform more effective job matching for LinkedIn users at a larger scale. This will only help to bolster LinkedIn’s top grossing revenue source — Talent Solutions.

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