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%
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.
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.
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.
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.
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.
Yes, but the character who gives that advice is very blatantly portrayed as a moron (by the way, does anyone know who are the inspirations for the character?)
It's a thinly veiled Mark Cuban, who sold his radio on the internet startup to Yahoo and has since managed to increase his net worth from 2.5 billion dollars to a whopping 2.7 billion dollars.
I think that advice is out-of-date now - and in Silicon Valley, the advice was given by "literally the worst person in the world", so I didn't see it as being advice anyone was meant to take seriously.
Not at all. This is probably the one thing they've gotten the most right so far.
It's not unique to tech stocks - it's very deep part of investor psychology.
E.g. in a romantic relationship, people being far more enthusiastic and more willing to invest in a partner with high perceived future potential earning and other value, than in a partner who's already clearly laid out all their cards.
FB keeps consistently growing quarter over quarter, and advertisers are still catching up with the fact that mobile advertising coupled with conversion tracking on FB works extremely well. FB's EBITDA nearly doubled from ~700MM to 1.4B in just 6 months![0] I don't know many tech companies that have done that much of a delta and absolute value in combination.
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.
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.
The article we're responding to references the $43M they lost this quarter
Having missed their last forecast, they're now forecasting earnings of $1.90 per share this year. They'll need to keep that rate of making money up for another ~130 years to justify their post-slide share price even at a zero discount rate. To put things into perspective, 130 years ago, electric light bulbs were a novelty.
As you hinted, they're far more aggressive than most companies in the Valley about actually trying to make money, but that just underlines how hideously overvalued they are.
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.
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.
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.
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.
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.
You probably replied to a craigslist email which used your real email address via reply-to field and they were using gmail which stored this information.
My current theory is that I gave him my phone number in one of the emails, but every email transaction was through the pseudo-anonymous craigslist email that is generated per listing.
He probably has a contact with that (now bad) email and my (still current) phone number. Which is my phone number on linkedin.
That kind of makes sense, but it still doesn't make me very happy about their methods.
The people who you sold stuffs to, they saw you on linkedin and tried to link you. Now here is the funny part - Linkedin asks them to enter your email id to confirm that they really know you. Bang... you receive mail on your craiglist email...
Again, just a wild guess as I have received Linkedin mails on different mail ids including my official email id that I have not entered....
Lesson learnt. You dont need to share your information online. Your friends will do that for you. And some times, even people you thought know nothing about you will have that missing link that these companies can then use to join the dots .......
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.
No, when this first happened, I was confused and contacted the individual by IM. They hadn't tried to contact my through LinkedIn or any other method, nor even logged into LinkedIn in quite a while. I just checked, and now there exists an account for the other email address, with no contacts. It's possible a bug created a bunch of accounts based on some alternate email settings they had, but I can't imagine them keeping around a bunch of bogus accounts unless it served some useful purpose, such as increasing the user count to show growth...
On further reflection, I remember creating that account with no connections while investigating what was going on. I tried to log in from the email address that was receiving the emails but couldn't and assumed that the account had been cancelled for inactivity. I "reopened" the account (in reality creating a new one) on accident. So I retract any statements about them accidentally creating accounts, this was a while back and I had forgotten that portion.
But to be clear, that wohle scenario happened because LinkedIn started sending info to that (unaffiliated) email address unexpectedly, and I assumed if I was getting LinkedIn email there, that must be my account email...
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.
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?
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!
48 comments
[ 3.7 ms ] story [ 101 ms ] threadSocial media companies are getting crushed this earnings season. Maybe it's FB sucking all the ad dollars in this space.
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.
At least, that's my take on it. I don't have any real experience here, so I could be totally off.
The reason I found it interesting is because I could see it actually happening. Of which, I'm sure it has.
It's not unique to tech stocks - it's very deep part of investor psychology.
E.g. in a romantic relationship, people being far more enthusiastic and more willing to invest in a partner with high perceived future potential earning and other value, than in a partner who's already clearly laid out all their cards.
[0] - http://www.wikinvest.com/stock/Facebook_%28FB%29/Data/EBITDA
Having missed their last forecast, they're now forecasting earnings of $1.90 per share this year. They'll need to keep that rate of making money up for another ~130 years to justify their post-slide share price even at a zero discount rate. To put things into perspective, 130 years ago, electric light bulbs were a novelty.
As you hinted, they're far more aggressive than most companies in the Valley about actually trying to make money, but that just underlines how hideously overvalued they are.
I wonder if that distinction will fade in line with your prediction.
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.
Also, I had some pretty terrible experiences trying to use their API (see: 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-devel...).
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.
He probably has a contact with that (now bad) email and my (still current) phone number. Which is my phone number on linkedin.
That kind of makes sense, but it still doesn't make me very happy about their methods.
Lesson learnt. You dont need to share your information online. Your friends will do that for you. And some times, even people you thought know nothing about you will have that missing link that these companies can then use to join the dots .......
But to be clear, that wohle scenario happened because LinkedIn started sending info to that (unaffiliated) email address unexpectedly, and I assumed if I was getting LinkedIn email there, that must be my account email...
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.