LinkedIn profit climbs as growth accelerates

In its first quarterly update since its sizzling initial public offering, online professional networking service LinkedIn Corp reassured investors who have been buying into the hype surrounding a promising crop of internet companies.The second-quarter results announced on Thursday injected some hope into a grim stock market and could feed the mounting excitement for upcoming initial public offering of stocks from other rising internet stars such as online coupon Groupon Inc and Web game maker Zynga Inc.The reason: LinkedIn reported the accelerating revenue and membership growth that it needed to support its lofty stock price and delivered higher earnings when analysts were bracing for a loss.It marked the first update since LinkedIn's headline-grabbing initial public offering of stock in May. The company's shares immediately doubled from their IPO price of $45 (Dh165) and remained in that range, stirring debate about whether investors are overvaluing internet companies that build large audiences with mostly free services.The fervour has raised fears that the internet may be in the early stages of an investment bubble akin to the late 1990s hysteria that culminated in a devastating collapse. LinkedIn's performance served as a reminder that there is at least one significant difference in the latest internet frenzy: Some of today's online companies are making money, unlike the ones hatched in the web's early days.LinkedIn earned $4.5 million, or 4 cents per share, in the April-June period. That contrasted with earnings of $938,000, or 2 cents per share, at the same time last year.Revenue more than doubled from last year to $121 million while membership climbed 61 per cent to 116 million at the end of June.Analysts, on average, had projected a loss of 4 cents per share on revenue of $104.5 million, according to FactSet.LinkedIn shares rose $3.50, or almost 4 per cent, to $99.02 in extended trading to recover part of a steep decline that occurred during the regular trading session amid a sweeping market sell-off."The IPO and attention certainly helped raise the company's profile and compounded the momentum we had already been seeing," LinkedIn CEO Jeff Weiner said in a Thursday interview.The earnings in LinkedIn's most recent quarter represented the most money the company has made in any three-period so far in its eight-year history. It's still a puny profit for a company whose market value is sitting around $10 billion. Losses could loom ahead too. LinkedIn has indicated it's willing to sacrifice short-term earnings to increase spending on technology and new product development.Growth is also expected to slow, partly because of economic uncertainty and partly because of the temporary lift provided by the IPO publicity.San Francisco (AP) The company, which is based in Mountain View, California, thinks it is better positioned to weather another recession than most businesses because its network has been designed to help people find better jobs."We connect talent with opportunity on a massive scale," Weiner said in the interview. "When times get tough like this, I think our platform can make a real difference in the lives of people."If LinkedIn loses money for a couple quarters, it may not bother investors too much, as long the company is still persuading millions more people to post their CVs and other information about their careers on its website. As its audience grows, LinkedIn's website will become a more attractive place for advertisers to promote their wares and for employers to recruit talent.LinkedIn gets more than two-thirds of revenues from fees that it charges companies, corporate recruiting services and other people who want broader access to the profiles and other data on the company's website. The remainder comes from advertising.Weiner said LinkedIn is adding about two members every second. That works out to about 173,000 new members, a pace that would give LinkedIn about 132 registered accounts by the end of September. From / Gulf News