Mike Isaac

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In Tepid Times for Tech Stocks, LinkedIn Still Expected to Perform

LinkedInrevenueIt has been a rough year on the market for buying tech stocks. Zynga’s worth has been reduced to a shadow of what it once was. And we all know how that whole Facebook IPO went.

And then there’s LinkedIn, one company in the minority of consistently strong tech market performances over the last few years. Since the company debuted on the NYSE nearly two years ago, it has spent most of its time on the market moving in an upward trajectory (save a nasty period in mid-2011).

This afternoon’s expectations are little different. The Street consensus is positive on its earnings report, with an average estimate of $279.5 million in revenue — nearly an 11 percent quarterly sequential increase — and an EPS of 19 cents.

Why so bullish? Sterne Agee analyst Arvind Bhatia attributes some of his positive outlook to new products debuted over the last quarter, citing an increase in overall user engagement.

“We believe new features such as Professional Insights (ability to follow thought leaders) and Linkedin Today (a social news curation product that provides members with news most relevant to them) would have helped increase engagement,” Bhatia wrote in a research note to investors this week.

Coupled with the site’s overall design refresh last fall, LinkedIn is focused on its engagement issue. The company saw a 2 percent sequential decline in page views last quarter (down to 9.4 billion, which is certainly no slouch). Part of the problem is the perception that LinkedIn remains an online resume, something you update with your most recent career information and then don’t return to. (Or “set it and forget it,” as Ron Popeil might say.)

Obviously that’s not what LinkedIn wants, and it has beefed up its efforts to increase engagement over the past year. Now users are prompted to leave feedback on each others’ profiles in the form of “endorsements,” essentially a “Like” for someone’s ability to do something (I, for example, get endorsed for journalism by my connections). Or take the little profile completeness progress bar on the right-hand side; LinkedIn wants you to keep coming back, to add content to your page, and to stay up to date on what others are doing.

That’s not an easy feat. Perhaps, as every other Web company seems to believe these days, the answer lies in mobile. LinkedIn’s unique mobile-only visitors jumped to 25 percent in Q3, nearly double that from a year-ago quarter. If the company can continue to bolster its mobile apps on Android, iOS, BlackBerry and Windows Phone, we could see that mobile growth sustained. I’d keep an eye out for mobile numbers in today’s earnings release.

We’ll have coverage of LinkedIn’s numbers this afternoon.

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