Up approximately 75% in the last 12 months, LinkedIn Corporation (NYSE: LNKD ) has proven bears terribly wrong. Though the company's valuation has kept many investors cautious, there is no ignoring the stock's phenomenal performance since the company's IPO. LinkedIn's premium valuation might seem insane, but it's not enough reason to short the stock. Why? LinkedIn's powerful and expanding moat. You're going to need a bigger moat Identifying economic moats, or a company's durable competitive advantage, is imperative to a solid long-term investing strategy. In a nutshell, moats protect a company's profits from potential entrants. Bruce Greenwald, author of Competition Demystified, says the job of identifying and managing a company's moat is management's ultimate priority in competitive strategy. Though moats come in many forms, a network effect is one of the most powerful.