![]() "As a result of this lack of confidence in LinkedIn's topline, the valuations associated with this will be chopped in half from where we were yesterday. "Companies with high predictability do get valuations that are at significant premiums to other Internet companies," said James Cakmak, an analyst at Monness, Crespi, Hardt & Co. "It's a little surprising that Facebook and Google didn't call it out, maybe they're having such strength in the business."Īnd expectations of a robust subscription business are falling flat. ![]() firms, and LinkedIn is a great example of that," said Mahaney. "Today we hear Obama talking about global weakness impacting U.S. LinkedIn cited softness in Europe, the Middle East, Africa and the Asia Pacific Region. If the Mark Zuckerberg-led company decided it wanted to take some of the jobs business away from its rival, it likely could easily enough."They're fundamentally different companies Google and Facebook are ad revenue businesses, and LinkedIn is 60 or 65 percent enterprise subscription revenue," said RBC analyst Mark Mahaney, who cut his rating on the company from Outperform to Sector Perform and slashed his price target to $156 from $300.Įach of LinkedIn's three businesses is facing its own challenges. People may not have their full work history on the social media leader, but they generally have a lot of it, with their current and many past jobs listed. How risky is it?In the short term, LinkedIn seems like a safe, slow- to moderate-growth platform, but it's hard to get past the fact that Facebook could crush it if it wanted to. People are voluntarily attending one while they would skip out on the other if they could, and that leaves LinkedIn vulnerable. In some ways, Facebook is a cocktail party you were attending anyway, while LinkedIn is the semi-mandatory training you have to take or risk missing out on future opportunities. ![]() Sometimes the same may be true of Facebook, but the social media leader generally mixes pleasant interaction with family and friends with the occasionally networking opportunity. The problem - and this is personal feeling, not hard evidence - is that most people go to LinkedIn out of obligation, not for fun. What are the risks?While LinkedIn appears to have a solid business, it remains vulnerable to a push into jobs solutions from Facebook. "We enter 2016 with increased focus on core initiatives that will drive leverage across our portfolio of products." "Q4 was a strong quarter for LinkedIn, bringing to a close a successful year of growth and innovation against our long-term roadmap," said CEO Jeff Weiner in the Q4 earnings release. That segment increased by 22% year over year to $532 million for all of 2015. Premium Subscriptions also grew in Q4 by 19% to $144 million. Marketing Solutions, where about 50% of the revenue comes from sponsored posts, grew20% year over year in Q4 to $183 million, and grew 28% to $581 million in 2015.
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