LinkedIn stock is soaring after strong results from the company’s second quarter that have helped eased some worries about the viability of newly formed internet companies.
LinkedIn had strong revenue in its second quarter thanks to new fees for deeper access to professional profiles as well as growth from ad revenue, the Associated Press reported. Even though net income fell as LinkedIn makes the investments needed for the company’s rapid growth, revenue increased faster than expected in the second quarter, leading the company to increase its expectations for the fall.
LinkedIn Corp. had revenue $228 million, an 89 percent increase from last year’s $121 million. Analysts had expected lower revenue of $216 million.
The LinkedIn stock rose more than 7 percent on Thursday when the results were released, and the rise continued afterward as well. The news was a good sign after other new internet companies like Facebook and Zynga had shown tepid results so far, the Associated Press noted.
The LinkedIn stock rise is good for investors in the company, but it also has larger implications for the employment market, the Associated Press reported. As more people look for jobs, LinkedIn becomes an important tool for them to post resumes and connect with potential employers. The company said it had 174 members by the end of June, up 50 percent from last year.
It also had good implications for LinkedIn, reported MarketWatch, a Wall Street Journal blog. John Shinal of MarketWatch wrote noted that the LinkedIn stock performance will appease investors from Wall Street:
By both exceeding Wall Street’s second-quarter expectations and raising its full-year forecast, LinkedIn’s LNKD management has stayed in the good graces of Wall Street firms, as well as among the money managers that buy growth stocks.
LinkedIn stock opened trading this week at close to $108 per share after ending the day Thursday near $94.