(REUTERS) - Professional networking service LinkedIn's outlook for the current quarter and the full year surpassed expectations as the company banks on continued strong product and subscription growth after its fourth-quarter revenue beat estimates.
The company's performance and outlook is keenly watched by investors as an indication of whether the business model of Internet companies is solid -- especially in light of Facebook's filing for an IPO last week.
LinkedIn -- started in the living room of ex-PayPal executive Reid Hoffman in 2002 and officially launched in May 2003 -- is similar to Facebook in that it connects people but it is much smaller and is geared towards professionals.
It makes money by selling premium subscriptions to its members and by helping companies with hiring and marketing. Its services are also used by professionals seeking jobs or contacts.
LinkedIn said on Thursday revenue for the first quarter of 2012 will be in a range of $170 million to $175 million and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) will be between $25 million to $27 million, topping average Wall Street estimates of $170.8 million revenue and EBITDA of $25.63 million
For the full year, LinkedIn said it aims to reach adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in a range of $155 million to $165 million and revenue of $840 million to $860 million, well above average expectations
$828.2 million in revenue and EBITDA of $149.8 million.
Analysts had expected LinkedIn to benefit from the gradually improving job market as employers look to hire more staff.
The Mountain View, California-based company said it saw double-digit revenue growth in its subscription base in the fourth quarter and its marketing solutions, while revenue from its hiring solutions product showed triple-digit revenue growth.
Overall fourth-quarter revenue was $167.7 million compared with $81.7 million a year earlier, above Wall Street expectations of $159.7 million, according to Thomson Reuters I/B/E/S.
Net income was $6.9 million, or 6 cents per share. Excluding items, LinkedIn said it would have earned 12 cents per share, compared with 7 cents per share expected by analysts.
However, Thomson Reuters I/B/E/S said it was not immediately able to confirm whether the company's comparison was in line with its calculations.
LinkedIn's stock was up 2.1 percent in after-hours trade after it closed at $76.39 on Thursday, well above its IPO price of $45.
Wedge Partners analyst Martin Pyykkonen said that he did not see Facebook and Google developing similar products and that many professionals will inherently like to keep their professional and personal profiles separate and distinct.
We think that as a practical matter, professional networking platforms will be largely distinct from ubiquitous social networking, he recently said in a note.