financial news

LinkedIn shares 15% down on latest financial report

Warwick Ashford

Shares in professional networking service LinkedIn dropped 15% in after-hours trading on the latest financial report, despite fourth quarter revenue of $447.2m, a 47% rise on the previous year.

Non-GAAP net income was also up at $48.2m, compared with $40.2m in 2012, but GAAP net income was down to $3.8m from $11.5m.

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However, analysts said just as Twitter investors were put off by poor user growth, it was the weaker-than-expected outlook for LinkedIn’s first quarter of 2014 and slow sales growth that scared off investors.

The firm, which claims it has reach 277 million members, said it expects first quarter revenue of up to $460m, which is below analyst expectations of around $469m.

LinkedIn chief executive Jeff Weiner said the “solid fourth quarter performance capped another successful year”, but added the company is looking for new sources of growth.

"We are investing significantly in a focused number of long-term initiatives that will allow us to realise our vision to create economic opportunity for every member of the global workforce," he said.

LinkedIn plans to develop its mobile application further, strengthen its jobs vacancy business and expand into China, reports the BBC.

Coinciding with the financial report was LinkedIn’s announcement that it has acquired data analytics company Bright Media for about $120m.

Bright Media is a three-year-old startup which uses algorithms to match job candidates with prospective employers.

This helps recruiters and job candidates to find a good match without wasting time and resources on dead-end leads.

“We decided to join LinkedIn because of what we lacked – the ability to apply this technology across the entire economy,” Eduardo Vivas, founder of Bright, wrote in a blog post.

“We share LinkedIn’s passion for connecting talent with opportunity at massive scale. And we agree that the old models for online recruiting are hopelessly broken,” he said.

The acquisition ties into LinkedIn’s core revenue stream from selling service subscriptions to recruitment firms, which use the website as a database for potential candidates.

Unlike other social networking sites, such as Twitter and Facebook, LinkedIn does not depend on advertising sales.


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