Investors have long had a simple response when it comes to the gargantuan buzz of social networks: where’s the profit? While some investors have been bullish on the potential growth of social businesses, others have questioned whether we’re looking at something similar to the dotcom crash of 1999, where hundreds of small Internet companies went public without profits, rocketed to absurd prices based on speculation alone, then crashed hard.
So when in May of 2011, LinkedIn was the first major American social network to go public, the world was very curious to see what kind of numbers they’d generate, and whether social networks really had the legs to stand in the market. After a great run, LinkedIn announced the results of its fourth fiscal quarter as a public company and beat all expectations.
Sales were $188.5 milloin last quarter, beating the $178.4 million analyst estimate, according to Bloomberg. Net income rose to $5 million from $2.08 million a year earlier, which works out to 4 cents a share — this beat all analyst expectations of 0 cents a share for the current quarter. LinkedIn membership is now 161 million users, up from 150 million in the previous quarter. The company hired 331 employees during the quarter and will continue to grow over the course of 2012.
These are fantastic numbers for the company, which has separated itself from the rest of the social networking pack by focusing on revenue and sales other than just advertising. The majority of LinkedIn revenue comes from companies that use their recruiting services and users who want special upgraded LinkedIn accounts to better browse and contact people on the social network.
LinkedIn also announced they are buying SlideShare, the company that helps people create slideshows and presentations and easily embed them on the web.