And is that investors are increasingly opting for the business model of LinkedIn, a preference that is based on five data.
Discover what reasons have to prepend the address book to Facebook:
1. Your income continues to improve
The first argument is that LinkedIn is growing both in terms of revenue and profits. Its turnover rose by 86% in 2012 , to reach 972.3 million dollars (euros, about 726 million) and its profit rose to $ 21.6 million (16 million euros), which means that won 81.5% more than in 2011.
Instead, led by Mark Zuckerberg platform achieved a more modest improvement in revenues and profits suffered a sharp deterioration : a turnover of 5.089 million dollars (euros, approximately 3.813 million), 37.1% more than in 2011, and won 32 million dollars (24 million euros), 95% less.
But how is it possible that Facebook bill five times and, instead, that its benefit is similar to LinkedIn? According to independent analyst Jaime Garcia Cantero, “this is because it is a larger company that needs more infrastructure, equipment … and therefore have more expenses.”
And, going over the figures of 2012, it is discovered that the network professionals need to enter to win a $ 45 greenback , while rival to bill $ 159 for it.
2. Its users are more valuable
Facebook beats LinkedIn by market value, as its capitalization is around 67,000 million dollars (about 50,200 million), up from 17,000 million dollars from his opponent. However, users of the platform to more valuable professionals.
At the end of 2012, without going any further, have confessed LinkedIn profiles 202 million, which means that each one is worth about $ 84 . However, and although Facebook has 1,060 million users, each one is worth about $ 63.
“LinkedIn has a portfolio of professional public and the world’s largest, but Facebook wins in quantity (has five times more users), lost in quality. Your audience is less defined and less specialized. Hence, it is more difficult to exploit the mass millionaire accounts you have today, “says Cantero.
3. Its shares are at record highs
Another argument that shows who opts for the market is the stock market evolution paths that have registered companies, which suggests the success of LinkedIn and the disappointment of his opponent.
The social network for professionals in stock market debut on May 19, 2011 at a price of $ 45 per share and signed one of the best releases on Wall Street .And it seems that momentum remains intact: its shares are highs area, have grown to over $ 160 and accumulate an increase of 40% so far this year.
Facebook , however, has not returned to play the price you dressed long the May 18, 2012: opened to $ 38 per share and currently trades near $ 10 below (they are in $ 29 ).
A worse than expected result for one of the largest IPOs in history and, as noted Cantero, “is that the company debuted Zuckerberg more expensive than it should, fueling rumors of a dotcom bubble ” .
4. A diversified business and clear
But what lies behind these differences? The answer is that the business model of the contact book is more diversified and can be measured better.
“LinkedIn is a company with a consistent track record (no bumping), with asustained growth and has three sources of income distributed (each representing one third): some fees paid by candidates who want to access information from third parties, the paid by companies who post jobs and recruitment made on the platform, and, besides, advertising “, detailing Enrique Dans , professor of Information Systems at IE Business School.
Instead, Facebook depends much of the advertising business . According to theCNN , ad sales account for 84% of company revenues, while in the case of LinkedIn, the reliance on advertising is around 30%. The remainder is made up of payments by companies and individuals.
“The problem with Facebook is to translate their potential. It is clearly the largest database in the world for any agency (because he knows the age, tastes, users friends …), but today, no one clicks on the ads . A person might say that he likes the English Court, but if it does not click, the window does not translate into money, “says David Navarro , equities manager Inversis Bank .
5. Lack of technological options
Finally, remember that there is a market gap in the technology sector, because some of the best known firms have stalled its growth in recent months and are no longer attractive.
” Apple has left the radar of many managers , Facebook fails to convince and businesses around you either stand out, while Microsoft has long since ceased to be the giant of the past. Investors are looking for a company that is able to grow at a moderate pace and …, and it seems that LinkedIn is one of the few that meets their requirements , “he says Navarro.