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LinkedIn's Competition Is Growing

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis ) -- LinkedIn (LNKD - Get Report) has seen rapid growth in its monthly unique visitors, from 4.5 million in 2007 to around 50.5 million in 2010.

We expect growth to continue, although at a slower pace, due to the larger base effect.

New features like LinkedIn Today, LinkedIn Swarm and LinkedIn Skill have beefed up the number of visitors to LinkedIn.

However, competition from other online recruitment services and social media platforms is always increasing.

LinkedIn's newest competition is from professional networking apps like BranchOut and Monster Worldwide's (MWW - Get Report) BeKnown, which are leveraging Facebook's wide user base to expand business.

Although we expect an increase in LinkedIn's average monthly unique visitors from 81 million in 2011 to around 215 million by the end of the Trefis forecast, Trefis members predict the unique visitor count will rise from 108 million to 300 million during the same period.

The member estimates imply an upside of 11% to the Trefis price estimate for LinkedIn's stock.

We currently have a Trefis price estimate of $30 for LinkedIn's stock, about 70% below the current market price of $101. We have explained in the past why we remain fundamentally bearish on LinkedIn.

New Features Boost LinkedIn's Visitor Count

In March 2011, LinkedIn introduced a new product, LinkedIn Today, which gives members customized news according to particular industries and according to what is being shared most frequently by the members.

The company also extended this feature as an app for mobile phones, which should drive more traffic.

During early 2011, it introduced other features like LinkedIn Swarm, which tries to answer the analytical question of what is popular and what is the most searched, similar to queries that appear on search engines like Google (GOOG).

Another attractive feature is LinkedIn Skill, which helps members stay ahead of the competition by discovering hot skills other professionals are adding to their profiles.

Competition from Professional Networking Social Media Apps

BranchOut, launched in August 2010, allows people to connect professionally on Facebook without granting access to others' personal profiles. It has become one of the largest professional networking services on FaceBook.

Monster's BeKnown app lets people connect professionally on Facebook without mixing business and friends. With more than 500 million active users on FaceBook, these professional-networking focused social media apps have a potential to reach a large number of users.

Our complete analysis for LinkedIn's stock is here.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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