Not much doubt about what Wall Street thinks of LinkedIn’s performance after the firm’s share price plummeted 28%, knocking $7 billion from its value.
Weak forward guidance and the slowest quarterly rise in ad revenue for two years were to blame. The firm turned in a $8.4 million loss on revenues of $862 million for its Q415. That’s revenue growth of 34% year-on-year, while full year revenues were up 35% to $2.99 billion.
In fact there are some strong numbers in the mix:
- 414 million members, up 19% year-on-year.
- 100 million unique visitors each month
- 57% of active users on mobile.
- 17% year-over-year growth in page views per unique visiting member.
- 22% rise in premium subscriptions.
CEO Jeffrey Weiner says that customer engagement has improved following the revamp of the core LinkedIn app late last year:
The year-over-year growth rate for members sharing content has nearly doubled since launching the new flagship app, accelerating to nearly 40% year-over-year. And some third-party publishers are seeing materially increased traffic coming from LinkedIn, in some cases greater than three times previous levels.
The early accelerated traffic trends are particularly noteworthy, given our 2015 emphasis on quality versus quantity of email sent by LinkedIn to members. We have reduced the number of emails sent on a per member basis by 40%, a worthwhile trade-off aligned with our long-term strategy to create the best possible member experience.
We’ve seen accelerating growth now in terms of unique user sessions and page views fairly consistently. And we’re seeing the fastest year-over-year growth across those metrics consistently over the last five months.
So that acceleration in growth is most definitely related to the launch of this new flagship application, which has exceeded our expectations. What’s interesting about the growth that we’re seeing is the acceleration is not just with regard to mobile engagement, it’s with regard to desktop engagement as well.
Weiner also points to an uptick in members using LinkedIn as a job-seeking tool:
Through improved discovery in our flagship and Job Seeker apps, as well as better relevance, we’ve seen a material increase in jobs engagement on LinkedIn, from approximately 30% year-over-year growth last January to over 80% growth today. In addition, our jobs app has seen traffic increase approximately six times from a year ago. And most importantly, we’re driving a greater volume of hiring by our customers.
For 2016, there are three hiring product priorities, he adds:
First, we’ll roll-out new Recruiter and Referrals across our existing customer base. Second, we will tie our existing products together into an easy to use suite, growing our potential to impact greater amounts of hiring with existing customers. And third, we’ll begin our journey towards addressing long-tail hiring by making Recruiter simpler to use, and introducing automated sourcing to help SMBs and hiring managers find and acquire talent.
There will some changes of emphasis when it comes to the Recruiter offering, with a focus on Small and Medium Businesses (SMBs). Weiner explains:
Historically flagship Recruiter product has best served recruiters, staffing agencies, more-sophisticated recruitment efforts. Individual hiring managers, folks within small, medium-size businesses have different needs, and we’re going to be developing products that better meet those needs.
But off the table will be Lead Accelerator, he adds:
We saw pretty healthy initial demand. What became increasingly clear, as we learned more about the business, is that to scale that would require greater investment. And that’s not just from a capital or resource perspective, but from a managerial perspective. We want to increasingly focus on those areas of greatest leverage.
And when contrasted with the momentum we have with the native advertising in Sponsored Updates specifically, we felt like there was a great opportunity to get more focused on our fastest-growing business at scale in native advertising, a business that we believe has the potential to benefit from our re-imagined flagship application and greater engagement within the feed in that application, where 80% of Sponsored Updates is coming through mobile.
Not the first time that LinkedIn has been smacked down by Wall Street for weak forward guidance.
The long term play around Sponsored Content will be a key indicator to track as Lead Accelerator is phased out. The firm states:
Sponsored Content is our fastest growing and most profitable ad product, so we will increasingly focus our efforts here to scale our B2B capability in the fastest, most sustainable way.
That’s one to watch.