LinkedIn's traffic grows rapidly but is its value dropping?

With the global economy still in a tailspin and waves of layoffs still hitting major industries, it's no surprise that websites catering to professionals and job-seekers are increasingly popular.

After all, business and jobs become far more important when business is harder to build and jobs are harder to come by.

According to TechCrunch, one such beneficiary of the current economic environment is professional social network LinkedIn. It's often referred to as a Facebook for adults and while Facebook's massive growth is hard to beat, LinkedIn isn't doing so bad itself.

TechCrunch cites comScore data from January showing that LinkedIn's unique visitors shot up an impressive 22% month-over-month, reaching 7.7m from 6.3m in December 2008. Even more impressive - time spent on the site. That doubled, with visitors spending 96.8m minutes on LinkedIn in January as compared to 47.6m a month ago in December.

Erick Schonfeld observes:

Part of what is driving all the activity is people looking for job, and helping friends who are out of work. Recommendations are up 65 percent since December, says spokesperson Kay Luo. LinkedIn’s improved people search, which it launched at the end of November, is also driving a lot of activity on the site. The company is seeing a 50 percent increase in activity on the new search platform.

But is this really good news for LinkedIn and other websites catering to professionals and job-seekers? I'm not so sure.

Most of these websites are highly-dependent on the very people who are hurting: employers and businesses. Fewer jobs mean fewer job postings.

With more businesses and professionals feeling the pinch, premium services could become a bit less appealing. LinkedIn's premium offerings cost anywhere from $24.95 per month to $499.95 per month. Not exactly cheap when you're counting your pennies.

And with advertisers cutting back, paying a premium even to reach the more affluent demographics sites like LinkedIn generally appeal to may not be as attractive as in the past.

All of this means that LinkedIn probably doesn't have an inverse financial correlation to the economy, one in which the economic downturn actually contributes to a boost in its revenues above and beyond normal growth.

In reality, traffic growth has never been a good measure of financial growth and while I suspect that LinkedIn will do just fine, I think traffic metrics today are of far less importance than they were even a year ago thanks to an upside down economy.

By that measure, it's possible that sites like LinkedIn are worth less today from an investment standpoint than they were when times are good, even though bad times means greater popularity.