It’s another morning where Facebook, Groupon, and Zynga are getting slammed.LinkedIn, alone among the social-media newcomers, is up!
You could also point to LinkedIn’s track record of steady growth. While its growth rate is decelerating as the law of big numbers kicks in, it’s still really high, especially compared to Facebook.
But we think there’s an explanation that’s less driven by numbers and more by psychology.
LinkedIn has several streams of revenue: subscriptions, job listings, and advertising. Dig deeper and you see that all of those revenue streams have their own nuances. For example, LinkedIn gets subscription revenues both from big companies and from individual professionals, and its growing its brand-advertising business that’s targeted at the site’s attractive demographics so it’s less dependent on employment-related ads.
In short, even if you’re bearish on one part of LinkedIn’s business, odds are you’ll find something else you like.
Contrast that to Facebook, which still hasn’t gotten its advertising story quite right and whose payments business is viewed as troublingly dependent on social games makers like Zynga.
Zynga is in the middle of a big turnaround as the excitement in gaming shifts to mobile. We think that there’s actually potential both in Zynga’s multiplatform, Web-and-mobile strategy and the notion of renting out its infrastructure to other social-games makers. But Zynga just hasn’t told that story to investors in a convincing way.
Oh, Groupon. We just don’t know where to start. Again, it could really make something of Groupon Goods and its nascent push into small-business point-of-sale systems and payments. But it is far, far from having anything persuasive there. Right now, Wall Street thinks of it as a daily-deals site, not the small-business operating system provider it wants to become.
Finally, there’s the CEO factor. It matters a lot for investors’ perceptions of companies.
LinkedIn’s Jeff Weiner is loved and respected inside and outside the company. We’ve asked around the Valley and we just haven’t run into anyone who dislikes Jeff. There’s a reason: He’s supersmart, like Mark Pincus, Mark Zuckerberg, and Andrew Mason. But he doesn’t have the rough edges they all share.
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