Financial News

  • 8 February 2014, 16:16

LinkedIn Shares Hit Over New Member Growth

Business networking site LinkedIn has suffered a share sell-off over fears it is failing to attract sufficient new members.

Trading dropped by 8% on Friday, following lower-than-expected first quarter and full-year forecasts released late Thursday.

The flight to safety came on the same day social media site Twitter saw its value drop by 6bn - nearly a quarter - within minutes of the stock market opening in New York.

By the end of trading around 4.14bn was lost by Twitter, on concerns it is approaching saturation in the United States - its biggest market.

LinkedIn also revealed it would spend 72m to buy Bright, a data analysis firm that is used to connect job hunters with employers, indicating a shift into active search capabilities.

It said 18 million new member accounts were set up in the last three months of 2013, extending LinkedIn's reach to 277 million users.

Revenue comes from premium member subscriptions, advertising and what it calls "talent solutions".

The company was launched in 2003 and went public in 2011. It now has around 41% of members logging on to the site by mobile devices.

The membership figure roughly equalled growth in the previous four quarters, but LinkedIn's forecasts increased concerns it is starting to struggle in mining members for more revenue streams.

It has spread to more than 200 countries and territories, but revenue from some areas are unable to match the per-member return of the US.

The company predicted revenue of around $460m (280m) during the first three months of 2014, 2.3% below expectation.

Its net income was $3.8m (2.3m), down 67% on a year earlier. Revenue was up 47% on the previous year to $447m (270m)

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