LinkedIn shares down sharply on weak outlook

Investors in LinkedIn Corp, the largest professional social network worldwide, were a disappointed lot, despite a 47-per cent rise in revenue for the fourth quarter on a weak revenue outlook for the quarter.

Its shares were down sharply $18.95 or over 8 per cent to $204.50 per share.

According to the professional social network, during the fourth quarter, its non-GAAP net income rose to $48.2 million from $40.2 million while its non-GAAP earnings per share were up to $0.39 from $0.35 per share in the same period a year earlier.

The company had projected revenue for the first quarter of 2014 in the range of $455 million to $460 million and adjusted EBITDA at around $106 million to $108 million.

For the full year 2014, LinkedIn Corp projected that it would be able to deliver revenue around $2.02 billion to $2.05 billion and adjusted EBITDA of about $490 million.

Its revenue guidance for the entire year too was less than the $2.16 billion projected by analysts.

The lower-than-expected revenue outlook of the professional social network was taken by investors as an indication that it was facing challenges in maintaining its growth in the future.

According to LinkedIn chief executive Jeff Weiner, the company was currently 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 in a statement.

The California-based company has plans for further development of its mobile application and strengthening its job vacancy business.

Traffic from mobile devices now made up about one quarter of LinkedIn's traffic.

Weiner also added that they planned to expand into China, the world's most populous country, and had recently appointed a new executive to head operations there. It is the only major US social network allowed to operate in China.

LinkedIn  also announced yesterday that it had bought data analytics company Bright Media for about $120 million.

Bright Media, a two-year-old start-up, uses algorithms for matching job candidates with prospective employers.

Bright Media's founder Eduardo Vivas said in a statement that they were excited to join LinkedIn.

"The company shares a similar vision and is equally obsessed about using data and algorithms to connect prospects and employers," he said.