Great discussion by Nancy Miller @nancefinance of why the market loves LinkedIn and plainly does not love Facebook, despite the fact that it is trading at 102 times estimated earnings for 2013 versus 60x for Facebook.
1. There is a solidity in LI’s play for the hugely-lucrative recruitment market that leaves Facebook’s unresolved ad-based play looking fragile. Only 20% of LI’s revenues are from ads.
2. LinkedIn also does the unthinkable in this land of free/ads/privacy intrusions – it asks for subscriptions and plenty of people are happy to stump up $200 a year +.
3. While LinkedIn’s efforts to move into Facebook-type “social” seem to many of us half-baked, the issue also seems entirely secondary.
Lessons for Facebook? Well, to my mind one is clear: Why not try a subscription-based offering?