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.



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recruitment services and job postings business accounts for around 50% of our $30 price estimate for LinkedIn stock, making it the most valuable business for LinkedIn.

Here we take a look at two key value components of the recruitment services and job postings segment. LinkedIn competes with



in the recruitment services market, social networking portals like Facebook and Twitter, and with


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in the online advertising market.

Our price estimate of $30 for LinkedIn stock is significantly

below market price.

The first key driver for LinkedIn is the average number of corporate customers. LinkedIn offers several recruitment solutions to its corporate clients. These solutions include simple job listings services as well as advanced recruitment solutions such as LinkedIn Recruiter, Talent Direct, Custom Company Profiles and Jobs Network. These tools help corporates identify the best matches from the largest and the most qualified pool of passive candidates.

The average number of corporate clients for LinkedIn has increased at a fast rate over the last few years, from 450 in 2008 to more than 2,700 in 2010. We expect this number to continue to grow to around 30,000 by the end of our forecast period.

The second key driver is the revenue per corporate customer. We estimate that revenue per corporate customer declined from around $26,000 in 2008 to around $22,000 in 2009 and 2010. The steep decline from 2008 to 2009 is attributable to the greater mix of large corporations, which paid higher fees, in 2008.

We believe that revenue per corporate customer will decline slightly over the near term as the mix of smaller corporate and business customers grows. Over the long-term, we expect a slight increase in this parameter as the corporate and business customer base growth slows and LinkedIn is able to increase revenue per customer through the introduction of new features and services.

See our complete analysis for LinkedIn stock


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