Published On: Fri, May 1st, 2015

LinkedIn Losing Its Luster?

Obama Participates In Linkedin Town Hall

World’s leading business networking service LinkedIn lost a quarter of its value after company reported poor revenue forecast. LinkedIn announced the current quarter’s sales to go down $45 million than the expected figure of over $670 million.

The downward correction in company’s revenue is attributed to losses in European advertising profits, foreign exchange woes, coupled with the substantial cost of acquiring online leaning site, Lynda.com.

LinkedIn is the third social media company to announce losses in quarterly earnings this week – following Twitter and Yelp. LinkedIn’s shares lost up to 25 per cent of their value within in an hour of trading. In terms of market capitalisation, the company lost $ 7 billion as result of short term trading.

Earlier in April, LinkedIn announced its intention to acquire Lynda.com at an estimated cost of $1.5 billion. This was the largest acquisition move by the social media giant company so far. Lynda.com, the newly acquired video tutorial site is expected to add over $20 million to parent company’s revenue in 2015.

LinkedIn’s new advertising format and currency fluctuations are the main factors to the company’s lacklustre performance.

This week, both Twitter and Yelp reported lower than expected earnings – resulting a loss of 26 and 23 per cent in share value respectively.

Last week, Facebook came out as a big surprise by performing better than market expectations. Though currency fluctuations slightly affected Facebook’s forecast, company’s shares remained stable over the week, reporting a minor fall.

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