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

32 points by samaysharma 12y ago

randomname2 12y ago
Beats? Sales were estimated at $718.3M, so they missed.
- saurabhtandon 12y ago
  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%
gitah 12y ago
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 12y ago
  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.
maverick2 12y ago
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.
chollida1 12y ago
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.
- kbenson 12y ago
  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?
  - talmand 12y ago
    Somehow, I found that storyline interesting in that such smart people could not grasp such a simple concept on their own.
    - kbenson 12y ago
      I think simple concepts can naturally be hard to come up with unless you are thinking in the right context. When someone in that situation should be thinking in the context of what that means to the people they are beholden to, often it's the first time they've been in that situation (or more accurately it's foreign feeling enough that the parallels are missed) and are still seeing it as a metric of their personal worthiness as measured through their creation. At least, that's my take on it. I don't have any real experience here, so I could be totally off.
      - talmand 12y ago
        Well, sure, if one is distracted or outside the context. But for one of them, that was his job. As for the leader of the group, the example of the problem was right there in front of him and he still didn't grasp it. The reason I found it interesting is because I could see it actually happening. Of which, I'm sure it has.
    - ericd 12y ago
      When everyone is doing something contrary to your instincts, it can be hard to trust your instincts... I think it's pretty common, actually.
  - guiomie 12y ago
    The last episode is the opposite, don't make revenues, this way expectations are limitless as opposed to making small revenues
kbenson 12y ago
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.
- themoonbus 12y ago
  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.
  - talmand 12y ago
    "Bug"
    - themoonbus 12y ago
      Haha, possibly. I don't see why they'd send email to an old address, but it definitely shows that I had a different definition of "delete" than they did. Also, I had some pretty terrible experiences trying to use their API (see: http://fucknolinkedindev.tumblr.com http://fucknolinkedindev.tumblr.com). Thankfully, I stopped developing anything using LinkedIn a couple months before they decided to totally nuke their existing dev resources (http://thenextweb.com/dd/2015/02/12/linkedin-takes-aim-developers-plans-lock-apis/ http://thenextweb.com/dd/2015/02/12/linkedin-takes-aim-devel...).
    - m_samuel_l 12y ago
      "Fixed"
- NDizzle 12y ago
win_ini 12y ago
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.
deepinsand 12y ago
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 12y ago
  Well, they are already several weeks into another quarter, and perhaps they are seeing a down trend.
- jedberg 12y ago
  Q2 is generally a slow quarter for a lot of businesses, so many of them have lower outlooks.
  - deepinsand 12y ago
    But shouldn't that have been priced into expectations or previous outlooks?
ta41q 12y ago
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 12y ago
  Study your linux internals, seriously they drill you at the on-site.
  - ta41q 12y ago
    thanks, that actually helps although first I have a Python remote test and then another one before the on-site.

32 points by samaysharma 12y ago

randomname2 12y ago

Beats? Sales were estimated at $718.3M, so they missed.

saurabhtandon 12y ago
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%

gitah 12y ago

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 12y ago
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.

maverick2 12y ago

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.

chollida1 12y ago

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.

kbenson 12y ago
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?
- talmand 12y ago
  Somehow, I found that storyline interesting in that such smart people could not grasp such a simple concept on their own.
  - kbenson 12y ago
    I think simple concepts can naturally be hard to come up with unless you are thinking in the right context. When someone in that situation should be thinking in the context of what that means to the people they are beholden to, often it's the first time they've been in that situation (or more accurately it's foreign feeling enough that the parallels are missed) and are still seeing it as a metric of their personal worthiness as measured through their creation. At least, that's my take on it. I don't have any real experience here, so I could be totally off.
    - talmand 12y ago
      Well, sure, if one is distracted or outside the context. But for one of them, that was his job. As for the leader of the group, the example of the problem was right there in front of him and he still didn't grasp it. The reason I found it interesting is because I could see it actually happening. Of which, I'm sure it has.
  - ericd 12y ago
    When everyone is doing something contrary to your instincts, it can be hard to trust your instincts... I think it's pretty common, actually.
- guiomie 12y ago
  The last episode is the opposite, don't make revenues, this way expectations are limitless as opposed to making small revenues

kbenson 12y ago

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.

themoonbus 12y ago
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.
- talmand 12y ago
  "Bug"
  - themoonbus 12y ago
    Haha, possibly. I don't see why they'd send email to an old address, but it definitely shows that I had a different definition of "delete" than they did. Also, I had some pretty terrible experiences trying to use their API (see: http://fucknolinkedindev.tumblr.com http://fucknolinkedindev.tumblr.com). Thankfully, I stopped developing anything using LinkedIn a couple months before they decided to totally nuke their existing dev resources (http://thenextweb.com/dd/2015/02/12/linkedin-takes-aim-developers-plans-lock-apis/ http://thenextweb.com/dd/2015/02/12/linkedin-takes-aim-devel...).
  - m_samuel_l 12y ago
    "Fixed"
NDizzle 12y ago

win_ini 12y ago

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.

deepinsand 12y ago

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 12y ago
Well, they are already several weeks into another quarter, and perhaps they are seeing a down trend.
jedberg 12y ago
Q2 is generally a slow quarter for a lot of businesses, so many of them have lower outlooks.
- deepinsand 12y ago
  But shouldn't that have been priced into expectations or previous outlooks?

ta41q 12y ago

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 12y ago
Study your linux internals, seriously they drill you at the on-site.
- ta41q 12y ago
  thanks, that actually helps although first I have a Python remote test and then another one before the on-site.