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I last looked at LinkedIn (NYSE:LNKD) in August. At the time, I suggested the company could prove to be the poster child for social media success.

Following the company's Q3 conference call, it's clear LinkedIn has the best monetization program in social media.

LinkedIn Is Facebook, With a Twist

How many of us are willing to pay Facebook (NASDAQ:FB) a fee to view posts about dogs, kids, and colds? Not many, which is why Facebook earns revenue from advertisers instead of members.

However, millions willingly fork over big money -- some $50 million in the last quarter alone -- to have premium access on LinkedIn. And willingness to sign up for premium services remains strong, with Q3 subscription sales 74% higher than a year ago.

That's not to say LinkedIn isn't a fan of advertisers. In fact, advertisers are eagerly courting LinkedIn's business-minded users with advertising sales of $64 million in Q3, up 60% from last year.

But more important than memberships and advertising, LinkedIn gets the majority of its revenue from hiring related services. Back in May, I wrote about how LinkedIn was eating Monster Worldwide's (NYSE:MWW) lunch. LinkedIn is becoming the go-to resource for headhunters, job seekers, and employers. That status helped its Talent Solutions segment -- formerly known as Hiring Solutions, for those reading the 10-Qs -- grow revenue an inspiring 95% from a year ago to $138.4 million. That's in stark contrast to Monster, which saw Q2 revenue fall 12% year over year to $237 million.

Exiting the quarter, its talent segment accounted for 55% of LinkedIn's sales, up from 51% a year ago. That trend is likely to continue as LinkedIn wins additional share from firms like Monster, which still has a $1 billion in sales.

But Here's Where LinkedIn Really Shines

Facebook may have over a billion users, but LinkedIn does a far better job monetizing its 187 million users.

LinkedIn users rose 43% in the quarter and monthly unique visitors climbed to 143 million, including Slideshare. This works out to $1.76 in revenue per monthly active user, far better than the $1.25 at Facebook. And it downright dwarfs the $0.44 per monthly active user at Yelp (NYSE:YELP).

Sales (Millions)

MAU (Millions)

$/MAU

LinkedIn

$252

143

$1.76

Facebook

$1,262

1,001

$1.25

Yelp

$36.40

83.5

$0.44

LinkedIn's Success Is Likely to Continue in Q4

Social media sites are generating record traffic as innovation boosts engagement. LinkedIn is no different.

The following chart from Google Trends shows Google searches for LinkedIn are hitting the highest number on record. As more people search, it holds that monthly users and engagement will increase. In turn, this will mean more subscribers, ads, and job posts.

Click to enlarge image.

LinkedIn is redefining how people network, influence, mentor, and job seek.

It has a fast-growing user base and remains underpenetrated worldwide. It has multiple revenue streams, including subscriptions, advertising, and employment. Its largest revenue segment is growing fastest and it generates industry-leading revenue per monthly active user.

All of these reasons won't be enough to convince a value investor to buy shares. But for investors looking for a best-of-breed social media play, LinkedIn is a great choice.

Source: LinkedIn Beats Facebook In Monetization