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Facebook Vs. Linkedin


(Image Source: Forbes) 

Two similar companies that target different demographics. Facebook (NASDAQ:FB) is a social networking website that targets a younger demographic of users while Linkedin (NYSE:LNKD) targets professionals. So which has greater growth potential, according to the markets, Facebook.

According to an article by Daniel Sparks of The Motley Fool, Facebook has a market cap of $166 per member vs. Linkedin who has a market cap of $109 per user. The market believes that both of these companies have high growth potential, Facebook has a PE of 174 and Linkedin has a PE of 688.

According to Sparks, Linkedin is a better buy because it has lower market cap per member. Moreover, both Linkedin and Facebook earn the same amount per users, $1.6. What does that mean, even though people spend less time on Linkedin, they still produce the same amount of revenue as a Facebook member. However, before you invest there is a number of things you need to take into account, first off, Facebook users are way more active than Linkedin users. Second, Facebook is better at engaging uses.

On the other hand, as I mentioned in a previous post, Facebook users are more likely to switch more rapidly to something else than Linkedin users.   

Which do you think is a better buy?