Are LinkedIn’s Users Becoming Less Engaged?? The Data Says Yes…

Time to revisit LinkedIn ($LNKD) now that we approach a $10B valuation for a company that had $2M of net income in Q1 2011.

My theory is that $LNKD has seen a surge in traffic and signups simply due to their highly publicized IPO. Why not? It could be useful to the millions of unemployed and it is free. So, go for it and sign up.

They key for $LNKD, is once they get you signed up, what then? Do you use the site? Does it become a “landing page” for you (the web page your browser opens first)? Is it something you visit hourly? Daily? Monthly? Quarterly?……Just how engaged are those 100M “registered members” we keep hearing about? Bottom line, as time goes on, are “members” using the site more or less?

Turns out, less and less as $LNKD grows.

Here is the “all time” measure:

It looks like the old users are the hard core ones. New users, who already have Facebook and Twitter accounts find far less utility from $LNKD and clearly are just not using the site post account initiation.

Here is the last year:

Here is the monthly visits per person…you’ll notice the same trend:

If we look at the composition of those page view, we find near 70% have no interaction with the site, accounting for only 25% of page views:

 

Now, $LNKD is constantly being compared to Twitter and Facebook. But, if we look at the data for those two companies, we see the level of user interaction simply blows the door of $LNKD. While 1% of $LNKD users are heavy users of the site, 76% and 53% of facebook and twitter users are.

So, to value $LNKD like these others (Twitter recently raised $$ at a $7B valuation), given that only 1M of its 100M “registers users” use the site heavily vs the other two, the valuation of $LNKD is fundamentally flawed.  Facebook has a ~$100B valuation but also has >600M users….hard core users and >9B monthly page views.

This means either the valuation given to both Facebook and Twitter grossly undervalue them or $LNKD ‘s grossly over values it…… I say it is clearly the latter given its obviously indifferent users base to the service.