The Zacks Analyst Blog Highlights:LinkedIn Corporation, Facebook Inc., Google, Expedia and Priceline.com

The Zacks Analyst Blog Highlights:LinkedIn Corporation, Facebook Inc., Google,
                          Expedia and Priceline.com

PR Newswire

CHICAGO, Nov. 13, 2012

CHICAGO, Nov. 13, 2012 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include LinkedIn Corporation (LNKD),
Facebook (FB), Google (GOOG), Expedia (EXPE) and Priceline.com (PCLN).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Today, Zacks is promoting its ''Buy'' stock recommendations. Four daily picks
are offered free.

Here are highlights from Tuesday's Analyst Blog:

Online Networking, Present & Future

Fifteen years ago, we could hardly gauge the benefits of professional/social
networking platforms, though the Internet and e-mail already existed. People's
understanding and usage of technology and the Internet have evolved over the
years. And although it looks like we have come a long way, the rate of
development indicates that innovations in social networking are just getting
started.

Present Scenario

Professional social networking is the order of the day, and nobody can defy
its benefits any longer. We all know that the trend setters in this domain
include LinkedIn Corporation (LNKD) and Facebook Inc. (FB). However, other
companies like Ning are coming up fast and helping people socialize on the
net.

Though online networking is at a nascent stage, these new players have
realized the potential of this business and are coming up with innovative and
customized solutions to grab a major share of the market.

"Netizens" have started understanding the dynamics of an online network,
either professional or personal. Again, corporate and business houses are
trying to make a foray into this business as they have realized that the end
users are evolving every day and are increasingly adopting the social network
sites.

Headhunters have been able to use the professional networking platform to look
for suitable candidates for job openings. A case in point would be networking
company XING's new collaboration with a career website Kariyer.net. The
companies will be using special software that automatically matches job
postings published at Kariyer.net with XING members irrespective of the fact
that job searchers may be active or passive in their approach. This is
attracting HR professionals as they are getting a readymade database of
candidates.

Growth Potential

According to the latest available data from the Internet research site
eMarketer.com, as of December 2011, more than 1.2 billion people worldwide
used social/professional networking sites with a frequency of at least 1 hit
per month. eMarketer.com expects 1.5 billion Internet users by the end of
2012.

The research suggests that although the segment witnessed the highest growth
of 23.0% in 2011, the growth rate may be expected to moderate over the next
few years. However, the growth rate is estimated to remain in the double
digits.

Growth in the Internet networking business is expected to come largely from
Facebook's expansion (although it is barred in China), which is expected to
exceed the billion-user mark by the end of 2013.Facebook grew 44% in 2011,
but the growth rate is projected to drop to 13.9% in 2014.

Among the different geographic regions, India is expected to take the lead in
Internet networking, offering the fastest growth of 51.7%, followed by
Indonesia with 51.6%, while China is expected to come third with a growth rate
of 19.9%. China is trying to restrict their young population from accessing
Internet networking due to certain cultural issues in the country.

Pitfalls

Apparently, the future looks promising for the Internet networking companies,
but the end users have slowly started understanding the risks of maintaining
an online public profile. One important drawback is that the demarcation
between personal and the public information of a person is slowly reducing.

Personal information may get divulged in the public domain without the user's
knowledge. Thus, many users are deactivating their online profiles.

Security concerns and password theft in both personal and business networks
are the other negative attributes. Although most of the sites claim to have
adopted security measures to conceal user information, rampant cases of
harassment, cyber-stalking, online scams and identity theft are being
reported.

Moreover, these internet networking companies are mostly funded by
advertisements on the sites, so their effectiveness in marketing these
advertisements go a long way towards their success. This is specifically the
case with Facebook.

Moreover competition is also heating up in this space. Local networking sites
especially in china are likely to grow strongly and spread overseas. They are
confident about their contents and about their appeal to the mass public.
Moreover, companies like Google ( GOOG) (with its Google+) is also increasing
competition. This increasing competition will also affect the pioneers and may
have an effect on their revenue generation ability.

China's decision to ban Facebook is an ostensible sign of the government's
concern about the addictive nature of this medium. The Chinese also believe
that youngsters should not be freely exposed to information since it could
have a negative effect on the society and culture of the country. These
government regulations affect the business potential of Internet networking
companies.

To Sum Up

Although Internet penetration is expected to grow exponentially over the next
5 to 10 years, we believe that this may not be the case for social networking
companies. End users gradually understand the pitfalls of this medium.

Although this has transformed the life of many in a positive way, there are
others who feel differently. Therefore we think that investors would gain far
more by investing in Travel booking sites like Expedia (EXPE) and
Priceline.com (PCLN) both of which carry a Zacks Rank of #2 (Buy), but we have
a Zacks #3 Rank for both LinkedIn and Facebook, which implies a short-term
Hold rating.

Today, Zacks is promoting its ''Buy'' stock recommendations. Four daily picks
are offered free.

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