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LinkedIn Q1 Beats on Sales of $638M, Shares Fall 25% on Weak Outlook

32 points| samaysharma | 11 years ago |techcrunch.com | reply

47 comments

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[+] kbenson|11 years ago|reply
I can't say I'm entirely disappointed to see LinkedIn doing poorly. They do shady things with their data[1], and I'm not okay with that.

I like the idea, but it feels like they are a company that could have done well and been fine privately, but market pressure forces them into some questionable practices (but I have no idea how representative of reality that is).

1: Such as determining a second email address of mine through data mining or some other method and sending emails to it asking if I know a person, even through I'm already linked with them, and that email address does not have a LinkedIn account. That's either an invasion of privacy, or spam, or both.

[+] NDizzle|11 years ago|reply
If we're trading stories about shady linkedin things, I want to participate!

While I have never synced any of my email addresses with linkedin, and I have always used the hidden craigslist email address when buying/selling things, linkedin currently wants me to connect with two different people that I have sold things to on craigslist.

I'm not even sure how that happens, especially since I use the craiglist-internal email for handling the transaction.

[+] rudimental|11 years ago|reply
I'm no lover of LinedIn, and I bet they do some shady thing. As to your second email address, I wonder if it's someone trying to 'connect' to you input it. LinkedIn asks for an e-mail address of the person you want to connect to if they're not close enough to you in the LinkedIn graph, and maybe a person put in the other email.
[+] themoonbus|11 years ago|reply
I had LinkedIn sending me messages on an email that I had deleted from my account a year prior. It was a bug on their end (edit: or so they claimed), and they fixed it after I talked to customer service, but I've never really trusted them since then.
[+] chollida1|11 years ago|reply
The word I'm hearing is that this is going to start being the new normal for tech companies.

The market is starting to demand that companies that have huge multiples start to earn their multiples.

FB, GOOG, MSFT, APPL and CSCO are proabably all ok as they can hit their targets with relative ease and don't carry a burdensome multipel, but hype based companies like TWTR, LNKD and others are about to be in a world of hurt, I wouldn't want to be a shareholder in any of those companies:(

This is probably going to be especially painful for the SAAS companies that just IPO'd, I don't think they'll get much time to prove they are worth their multiples and they have the double whammy of coming out of employee lock up periods pretty soon.

AMZN is the one wild card, I would have thought their free pass expired long ago but they are the sole exception that I can think of.

EDIT to respond to the question about FB's multiple, Most people still believe that FB has the ability to turn on a switch and make more money, ie they are artificially making less than they could fro the sake of growth, just like AMZN.

[+] hyperbovine|11 years ago|reply
I feel like the market somehow exacted its pound of flesh from AMZN recently when they revealed how much money they are making off of AWS. I can't imagine any other reason for wanting to do this other than to allay the fears of investors jittery over their perpetual operating losses.
[+] kbenson|11 years ago|reply
Isn't this exactly what the last week of HBO's series Silicon Valley was about? Not getting valued too high because it may force your hand later?
[+] phamilton|11 years ago|reply
In adtech, perception has been a big deal. If you are a media company you get one multiple. If you are a tech company you get a much higher multiple. As such, most adtech companies try very hard to market themselves as tech. Eg. "platform" is much more valuable than "network" even though most fall somewhere in between.

I wonder if that distinction will fade in line with your prediction.

[+] capkutay|11 years ago|reply
Are you sure about FB? Their price-earnings ratio is almost at 80 (compared to Google's 26, Apple's 15, and Cisco's 17)
[+] fourstar|11 years ago|reply
You really think LNKD is hyped? They make money, and lots of it. They're one of the few companies in the valley that have a solid business plan and footing.
[+] win_ini|11 years ago|reply
I wonder if there will be any sort of impact longer term as a result of them basically cutting off developer access to their current API. Login, Sharing, and some other stuff remains - but you can't access someone's network graph. Very similar to Facebook's move.

I know everyone always says "don't build your business on another platform" which I agree with. And several businesses have recently closed because they did just that.

LinkedIn claims this change is because they want to have the best end-user experience. Well - I think the main reason I have a professional graph is because I want to leverage my connections. And frankly, LinkedIn's use of that graph info is primarily focused on Finding Jobs and building Social Capital for your career.

By cutting off developers from the graph and community - I think Linkedin is actually NOT providing a better end-user experience... for other apps - LinkedIn is now a glorified Professional Resume served up via an API. BUT as a LinkedIn user I want to leverage my graph in different ways - reconnecting with old connections, keeping track of people's careers, connecting with vendors, and other use cases I can't imagine - but other app developers can.

As usual, I know nothing will change LinkedIn's mind. Except they have changed my mind, about using LinkedIn on a regular basis except for finding jobs. Over time I find Glassdooor is becoming better for that anyhow.

I personally have some feeling of Schadenfreude when I see them miss and only hope that cutting off developers hampers them in the long-term. But I also recognize developers are a small part of their users and can effectively be ignored.

Fuck you, Linkedin - I wish I knew how to quit you.

[+] gitah|11 years ago|reply
Yelp, Twitter, Grubhub, and now LinkedIn.

Social media companies are getting crushed this earnings season. Maybe it's FB sucking all the ad dollars in this space.

[+] hkmurakami|11 years ago|reply
This holds a lot of weight to me. Everyone I talk to raves about the effectiveness of FB app install ads, even though CPI is becoming tremendously expensive.
[+] deepinsand|11 years ago|reply
Twitter, LinkedIn, GrubHub, and Yelp all had decent quarters, and yet they all reported tepid outlooks. When they're in such disparate industries, how did they reach this consensus? Shouldn't this be reflected in the broader economy somehow?
[+] boomshucka|11 years ago|reply
Well, they are already several weeks into another quarter, and perhaps they are seeing a down trend.
[+] jedberg|11 years ago|reply
Q2 is generally a slow quarter for a lot of businesses, so many of them have lower outlooks.
[+] maverick2|11 years ago|reply
Like FB for Work,LinkedIn in for work is an 'easier' sell and a solid secondary revenue stream. They must be looking into that. If not, they should be.
[+] randomname2|11 years ago|reply
Beats? Sales were estimated at $718.3M, so they missed.
[+] saurabhtandon|11 years ago|reply
No they earned more than expectation which was good. But because in the second quarter they have lower revenue expectation. The shareholders don't like this given their history and that's why the share is down by 25%
[+] ta41q|11 years ago|reply
Off-topic: I'm interviewing for a Site Reliability Engineer position at LinkedIn (Mountain View). Anybody has any comments (even second-hand) on how is it to work for LinkedIn? thanks!
[+] ogsharkman|11 years ago|reply
Study your linux internals, seriously they drill you at the on-site.