Is this the Beginning of the End for LinkedIn?

By Bizclik Editor


LinkedIn announced weaker than expected second quarter revenues, suggesting that the company’s new mobile advertising initiative could take longer to come into fruition that first anticipated. As a result, the professional network saw its share price tumble.


According to Reuters, LinkedIn announced strong first-quarter revenues of $US324.7 million, up 72 percent from $US188.5 million a year earlier.

LinkedIn’s core recruiting services business generated 57 percent of the company’s sales, with its revenues up 80 percent to $US184.3 million, with the company reporting a solid first quarter net income of $22.6 million.

However, despite a strong first quarter, the company disappointed investors by announcing projected second quarter revenues of between $US342 million and $US347 million, below the $US359.3 million tipped by analysts.

The projections caused a 10 percent fall in the company’s share price, suggesting recent initiatives aimed at growing the company’s advertising could take longer to generate revenue growth than many analysts predicted. The company is also suffering from increasing competition from professional networking sites such as Businessfriend, which is currently gaining traction in the business social networking arena.

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The Future of LinkedIn

LinkedIn recently unveiled plans to run mobile ads in future versions of its iPhone and Android apps, and the service will also give greater prominence to its news feed in future versions, with Twitter-style advertisements interspersed, however that has failed to keep investors feeling secure about the future of the social network.

Could LinkedIn be losing its grip of the professionals social networking market? Let us know what you think on our Facebook page, or send us a Tweet!




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