Story first appeared on USA Today -
Online professional-networking service LinkedIn's fourth-quarter performance added another line to its sterling resume as a public company.
LinkedIn's fourth quarter earnings came in far above Street expectations, boosting the stock in after-hours trading.
The results announced Thursday extended LinkedIn's uninterrupted streak of exceeding analysts' projections for both earnings and revenue. It marked the seventh consecutive quarter since LinkedIn's May 2011 IPO that the company has pulled that off, to the delight of investors.
The run of pleasant surprises is one of the reasons that LinkedIn's stock has tripled from its initial public offering price of $45. The shares surged $12.11, or nearly 10%, to $136.20 in extended trading after the numbers came out.
Wall Street's embrace of LinkedIn contrasts with the cold response given to other Internet services that have gone public during the past few years. Most of them are trading below their IPO prices. The most notable is Facebook, whose stock is worth about 25% less than it was when it made its market debut in May.
Although both run websites devoted to connecting people with common interests, LinkedIn and Facebook are targeting different audiences. Facebook focuses mostly on letting friends and family share good times and swap stories, while LinkedIn concentrates on helping people advance their careers and helping companies fill jobs.
Facebook, which is based in Menlo Park, is the larger of the two services, with more than 1 billion active users and $5.1 billion in revenue last year. LinkedIn, which is based in Mountain View, California, has 20 million account holders and revenue of $972 million in 2012.
But LinkedIn is growing more quickly, partly because it's less dependent on advertising than Facebook and most Internet services. In the fourth quarter, advertising accounted for 27% of its revenue. The remainder comes from various tools that it sells to help recruit workers and glean more insights from the information that its users post on its website.
LinkedIn earned $11.5 million, or 10 cents per share, during the final three months of last year. That marked a 66% increase from $6.9 million, or 6 cents per share, a year earlier.
If not for the costs of employee stock compensation and certain other charges, LinkedIn said it would have earned 35 cents per share. That was far above the average estimates of 19 cents per share among analysts surveyed by FactSet. Analysts excluded certain items from their calculations.
Revenue soared 81% from the previous year to $304 million — about $24 million above analyst forecasts.
LinkedIn's revenue outlook for the current quarter and all of 2013 were roughly in line with analyst estimates, setting the stage for the company to clear those financial bars once again.
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Showing posts with label stock. Show all posts
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Friday, February 08, 2013
Wednesday, August 08, 2012
Key Mobile, Marketing Talents Exit Facebook
Story first reported from USA Today
SAN FRANCISCO – Facebook hasn't just been losing market value.
Since its poorly received IPO in May, the social-networking company has lost a handful of top-ranking executives.
The latest defections came last week, when Ethan Beard, who is responsible for developing relationships with top app makers, and Katie Mitic, platform marketing director, announced pending departures. Jonathan Matus, mobile platform marketing manager, also is leaving.
The announcements come after the high-profile exits of chief technology officer Bret Taylor in June to start his own company, and Open Graph product manager Carl Sjogreen last month.
The loss of key mobile and marketing personnel, on the heels of a $157 million second-quarter loss, won't help Facebook shares, which have drooped to $20.72 — nearly half of their $38 starting price. Questions about its online and mobile advertising business have led to a drop in the company's initial valuation to $43.5 billion, from $100 billion.
Shares may further decline when Facebook's first lockup period for stock ends Aug. 17, allowing employees and early investors to sell some of their shares.
The talent drain underscores intense competition for employees in Silicon Valley, and the temptation for workers — even those at Facebook — to flirt with start-ups, where they can wield more influence, says social-media analyst Greg Sterling.
"Start-up junkies get restless after a few years," says Sterling, noting that fledgling companies offer bigger potential salaries and greater long-term stock payoffs. "This is not a time to lose top talent. That is Facebook's challenge."
"We're fortunate to have many, many talented people join the company each week, and we believe this will serve us well over the long run," Facebook spokesman Larry Yu said in a statement.
But stock options don't appear to be enough to keep employees rooted at Facebook.
Beard worked at Facebook more than four years, and most of his stock options have likely vested. Four years is the customary amount of time for options to fully vest at Silicon Valley companies. Mitic has been at Facebook only two years; Matus, one.
Both are likely to have received stock before Facebook's IPO. It's possible they're betting Facebook's stock will not rise so steeply the next year or two that they'd be leaving serious cash on the table.
SAN FRANCISCO – Facebook hasn't just been losing market value.
Since its poorly received IPO in May, the social-networking company has lost a handful of top-ranking executives.
The latest defections came last week, when Ethan Beard, who is responsible for developing relationships with top app makers, and Katie Mitic, platform marketing director, announced pending departures. Jonathan Matus, mobile platform marketing manager, also is leaving.
The announcements come after the high-profile exits of chief technology officer Bret Taylor in June to start his own company, and Open Graph product manager Carl Sjogreen last month.
The loss of key mobile and marketing personnel, on the heels of a $157 million second-quarter loss, won't help Facebook shares, which have drooped to $20.72 — nearly half of their $38 starting price. Questions about its online and mobile advertising business have led to a drop in the company's initial valuation to $43.5 billion, from $100 billion.
Shares may further decline when Facebook's first lockup period for stock ends Aug. 17, allowing employees and early investors to sell some of their shares.
The talent drain underscores intense competition for employees in Silicon Valley, and the temptation for workers — even those at Facebook — to flirt with start-ups, where they can wield more influence, says social-media analyst Greg Sterling.
"Start-up junkies get restless after a few years," says Sterling, noting that fledgling companies offer bigger potential salaries and greater long-term stock payoffs. "This is not a time to lose top talent. That is Facebook's challenge."
"We're fortunate to have many, many talented people join the company each week, and we believe this will serve us well over the long run," Facebook spokesman Larry Yu said in a statement.
But stock options don't appear to be enough to keep employees rooted at Facebook.
Beard worked at Facebook more than four years, and most of his stock options have likely vested. Four years is the customary amount of time for options to fully vest at Silicon Valley companies. Mitic has been at Facebook only two years; Matus, one.
Both are likely to have received stock before Facebook's IPO. It's possible they're betting Facebook's stock will not rise so steeply the next year or two that they'd be leaving serious cash on the table.
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Friday, July 27, 2012
Losses Posted for Facebook
Story first reported from USA Today
Ending a tumultuous day for social media companies, Facebook posted a loss Thursday in its first test as a public company.
Investors fled the social-networking giant in after-hours trading following a quarterly loss of $157 million, which included one-time charges related to the accounting of stock awards disclosed amid the botched initial public offering on May 18.
The social-networking giant, which went public in May with an eye-popping high valuation, reported on an adjusted basis a profit of $295 million, or 12 cents a share, on revenue of $1.18 billion for its second fiscal quarter. That met the consensus estimate for the quarter.
The company's stock plunged 11% in after-hours trading to $23.77 after losing nearly as much during the day's trading session. And the stocks of other social media companies slumped further, among them Zynga, Groupon and LinkedIn . The stocks had fallen during regular trading, even as the broad market rallied. Zynga had released disappointing earnings Tuesday after the close of regular trading, giving investors pause.
Meanwhile, a problem at Twitter's data centers took the micro-blogging site offline for several hours, affecting millions of its users. Google Chat also crashed.
The stakes could not be higher for social-networking giant after its much-anticipated IPO fizzled amid questions about its online and mobile advertising business. Its initial valuation of $100 billion is now $60 billion.
There was some good news. The social-networking giant's revenue of $1.18 billion for its second fiscal quarter compared to consensus estimates of $1.15 billion.
It was the first quarterly report for Facebook as a public company. It's unusual for a company to miss estimates on its first quarter as a public company, says Jay Ritter, professor of finance at the University of Florida. When companies go public, they typically have a solid outlook at least for the first few months.
Seeing Facebook's earnings coming in roughly in line with expectations was a disappointment for investors who have been hoping for more, says Jordan Rohan of Stifel Nicolaus. "Investors still hung to the hope that Facebook would rise to the occasion," he says.
Investors response to Facebook's report shows just how jaded Internet investors have become, he says. "It takes a particularly special performance for a stock to go up on its earnings," he says. "That's the rhythm of this quarter earnings period."
Facebook had warned investors that the quarter wasn't going to be a stellar one, by updating the risk section of its prospectus, Rohan says. "A company wouldn't do that unless the results were going to be uninspiring," he says.
Rohan continues to rate the stock a "hold." "This quarter's fundamentals don't seem to change the story of the outlook," he says.
"They have to show they can justify" even that lower valuation, says Lucy Jacobs, chief operating officer of Spruce Media, a technology platform for social-media advertising. She said Facebook has made several changes to goose ad revenue.
Like nearly every business in social media and beyond, Facebook is betting a large portion of its future on mobile ads. Yet few companies, including Facebook, have been able to capitalize on the promise. The popularity of mobile devices comes, in part, from their lack of ads.
CEO Mark Zuckerberg said mobile is a huge opportunity on a conference call with analysts, but he downplayed a rumored mobile phone from Facebook, adding that it "wouldn't make much sense." There had been speculation prior to the call that Zuckerberg might skip the conference call.
The market for the ads that dot smartphone and tablet screens is expected to soar to $10.8 billion in U.S. sales by 2016, from an estimated $2.6 billion this year, says research firm eMarketer. That's a tiny slice of the $169.5 billion market for media ad spending in the U.S.
Google has the early lead in the U.S. in monetizing mobile, with 51% of the market, largely due to its success with mobile search ads, says Noah Elkin, an eMarketer analyst. Phone numbers embedded in mobile ads on Google's click-to-call feature, for example, generate about 15 million calls per month.
Facebook barely registers yet, though the company has the potential to rake in $2.54 billion from mobile advertising, according to researcher Chitika. Facebook Sponsored Stories — an ad form that appears on a member's Facebook page and generally consists of a friend's name, profile picture and an advertiser the person "likes" — now appear in a user's Facebook mobile news feed.
Debra Williamson, an analyst at eMarketer, says mobile is where it's at right now.
Until early this year, Facebook had no real mobile strategy, she says.
The company's challenges don't end there.
In the U.S., where Facebook makes most of its advertising revenue, the social network is not drawing new users. In May, 158.01 million unique visitors logged on to the network, compared with 158.69 million in April, according to market researcher comScore. Facebook says it has more than 955 million members worldwide.
Underwriters of Facebook's IPO lowered guidance in May, suggesting the company would earn about $4.8 billion for 2012 — a billion-dollar drop in confidence that fed market uncertainty about the effectiveness of Facebook's advertising machine.
Social-gaming leader Zynga's woeful results on Wednesday — it lost $22.8 million in its most recent quarter — underscored Facebook anxiety, since Facebook depends on Zynga for about 12% of revenue.
Zynga CEO Mark Pincus blamed some of its problems on changes Facebook made to its platform.
Ending a tumultuous day for social media companies, Facebook posted a loss Thursday in its first test as a public company.
Investors fled the social-networking giant in after-hours trading following a quarterly loss of $157 million, which included one-time charges related to the accounting of stock awards disclosed amid the botched initial public offering on May 18.
The social-networking giant, which went public in May with an eye-popping high valuation, reported on an adjusted basis a profit of $295 million, or 12 cents a share, on revenue of $1.18 billion for its second fiscal quarter. That met the consensus estimate for the quarter.
The company's stock plunged 11% in after-hours trading to $23.77 after losing nearly as much during the day's trading session. And the stocks of other social media companies slumped further, among them Zynga, Groupon and LinkedIn . The stocks had fallen during regular trading, even as the broad market rallied. Zynga had released disappointing earnings Tuesday after the close of regular trading, giving investors pause.
Meanwhile, a problem at Twitter's data centers took the micro-blogging site offline for several hours, affecting millions of its users. Google Chat also crashed.
The stakes could not be higher for social-networking giant after its much-anticipated IPO fizzled amid questions about its online and mobile advertising business. Its initial valuation of $100 billion is now $60 billion.
There was some good news. The social-networking giant's revenue of $1.18 billion for its second fiscal quarter compared to consensus estimates of $1.15 billion.
It was the first quarterly report for Facebook as a public company. It's unusual for a company to miss estimates on its first quarter as a public company, says Jay Ritter, professor of finance at the University of Florida. When companies go public, they typically have a solid outlook at least for the first few months.
Seeing Facebook's earnings coming in roughly in line with expectations was a disappointment for investors who have been hoping for more, says Jordan Rohan of Stifel Nicolaus. "Investors still hung to the hope that Facebook would rise to the occasion," he says.
Investors response to Facebook's report shows just how jaded Internet investors have become, he says. "It takes a particularly special performance for a stock to go up on its earnings," he says. "That's the rhythm of this quarter earnings period."
Facebook had warned investors that the quarter wasn't going to be a stellar one, by updating the risk section of its prospectus, Rohan says. "A company wouldn't do that unless the results were going to be uninspiring," he says.
Rohan continues to rate the stock a "hold." "This quarter's fundamentals don't seem to change the story of the outlook," he says.
"They have to show they can justify" even that lower valuation, says Lucy Jacobs, chief operating officer of Spruce Media, a technology platform for social-media advertising. She said Facebook has made several changes to goose ad revenue.
Like nearly every business in social media and beyond, Facebook is betting a large portion of its future on mobile ads. Yet few companies, including Facebook, have been able to capitalize on the promise. The popularity of mobile devices comes, in part, from their lack of ads.
CEO Mark Zuckerberg said mobile is a huge opportunity on a conference call with analysts, but he downplayed a rumored mobile phone from Facebook, adding that it "wouldn't make much sense." There had been speculation prior to the call that Zuckerberg might skip the conference call.
The market for the ads that dot smartphone and tablet screens is expected to soar to $10.8 billion in U.S. sales by 2016, from an estimated $2.6 billion this year, says research firm eMarketer. That's a tiny slice of the $169.5 billion market for media ad spending in the U.S.
Google has the early lead in the U.S. in monetizing mobile, with 51% of the market, largely due to its success with mobile search ads, says Noah Elkin, an eMarketer analyst. Phone numbers embedded in mobile ads on Google's click-to-call feature, for example, generate about 15 million calls per month.
Facebook barely registers yet, though the company has the potential to rake in $2.54 billion from mobile advertising, according to researcher Chitika. Facebook Sponsored Stories — an ad form that appears on a member's Facebook page and generally consists of a friend's name, profile picture and an advertiser the person "likes" — now appear in a user's Facebook mobile news feed.
Debra Williamson, an analyst at eMarketer, says mobile is where it's at right now.
Until early this year, Facebook had no real mobile strategy, she says.
The company's challenges don't end there.
In the U.S., where Facebook makes most of its advertising revenue, the social network is not drawing new users. In May, 158.01 million unique visitors logged on to the network, compared with 158.69 million in April, according to market researcher comScore. Facebook says it has more than 955 million members worldwide.
Underwriters of Facebook's IPO lowered guidance in May, suggesting the company would earn about $4.8 billion for 2012 — a billion-dollar drop in confidence that fed market uncertainty about the effectiveness of Facebook's advertising machine.
Social-gaming leader Zynga's woeful results on Wednesday — it lost $22.8 million in its most recent quarter — underscored Facebook anxiety, since Facebook depends on Zynga for about 12% of revenue.
Zynga CEO Mark Pincus blamed some of its problems on changes Facebook made to its platform.
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Tuesday, May 22, 2012
Yahoo Discusses Selling Stake in Alibaba Again
Alibaba Group Holding Ltd. is near an agreement to buy back a 20 percent stake in itself from Yahoo! Inc. for about $7 billion and may announce a deal as soon as today, said a person with knowledge of the matter.
The purchase may pave the way for Alibaba, China’s largest e-commerce provider, to pursue an initial public offering in the next 18 months. Alibaba, helped by shareholders Temasek Holdings Pte., Digital Sky Technologies, Silver Lake, plans to finance the purchase with cash and debt.
Alibaba has been trying to buy back the stake in itself for more than a year and stepped up efforts in September, when the U.S. company fired former chief executive officer. Reducing the Alibaba stake lessens Yahoo’s toehold in China, the world’s largest Internet market, while also making a takeover of the U.S. company more likely, said an analyst at Stifel Nicolaus & Co.
For Yahoo shareholders, the sale and subsequent march towards an IPO is a clear positive, as many questioned whether Yahoo would be able to monetize its China assets at all. In addition, the capital required to take Yahoo private is reduced with each Alibaba monetization event.
Yahoo has come close to selling the stake in the past and failed, and a deal may be postponed. Yahoo currently owns a 40 percent stake in Alibaba so the current proposal under discussion would cut that holding in half.
The companies struggled to make headway on negotiations, failing to reach an agreement to let Alibaba Group buy back shares in 2010. Yahoo acquired the stake in 2005 in exchange for $1 billion and ownership of Yahoo’s Chinese unit.
Fissures became public by January 2010 when Alibaba Group described as “reckless‘‘ Yahoo’s support for Google Inc., which tangled with Chinese authorities over the nation’s Web- censorship rules.
In May of last year, Yahoo’s rift with Alibaba widened after the Web portal said the Chinese company spun off its online payment business without informing shareholders. Yahoo said it wasn’t consulted about the transfer of the Alipay unit to a company mostly owned by the chief executive officer of Alibaba Group.
Yahoo had a board meeting to review the transaction and will consider a dividend payment, AllThingsD reported May 17. The website said the deal is likely to value the portion of Yahoo’s holdings at about $7 billion, or 20 percent of Alibaba’s $35 billion enterprise valuation. After a potential IPO, Yahoo could sell more of its stake, AllThingsD reported.
Active Discussions
Yahoo, which failed to keep pace with growth at Google and Facebook Inc., is pursuing active discussions with the Chinese company.
Yahoo had also been in discussions about selling its stake in Yahoo! Japan to Tokyo-based Softbank Corp. Those talks have gone cold over price and have not resumed.
Yahoo considered a deal with Alibaba and Softbank that would cut its stake in Alibaba to about 15 percent from about 40 percent.
The purchase may pave the way for Alibaba, China’s largest e-commerce provider, to pursue an initial public offering in the next 18 months. Alibaba, helped by shareholders Temasek Holdings Pte., Digital Sky Technologies, Silver Lake, plans to finance the purchase with cash and debt.
Alibaba has been trying to buy back the stake in itself for more than a year and stepped up efforts in September, when the U.S. company fired former chief executive officer. Reducing the Alibaba stake lessens Yahoo’s toehold in China, the world’s largest Internet market, while also making a takeover of the U.S. company more likely, said an analyst at Stifel Nicolaus & Co.
For Yahoo shareholders, the sale and subsequent march towards an IPO is a clear positive, as many questioned whether Yahoo would be able to monetize its China assets at all. In addition, the capital required to take Yahoo private is reduced with each Alibaba monetization event.
Yahoo has come close to selling the stake in the past and failed, and a deal may be postponed. Yahoo currently owns a 40 percent stake in Alibaba so the current proposal under discussion would cut that holding in half.
The companies struggled to make headway on negotiations, failing to reach an agreement to let Alibaba Group buy back shares in 2010. Yahoo acquired the stake in 2005 in exchange for $1 billion and ownership of Yahoo’s Chinese unit.
Fissures became public by January 2010 when Alibaba Group described as “reckless‘‘ Yahoo’s support for Google Inc., which tangled with Chinese authorities over the nation’s Web- censorship rules.
In May of last year, Yahoo’s rift with Alibaba widened after the Web portal said the Chinese company spun off its online payment business without informing shareholders. Yahoo said it wasn’t consulted about the transfer of the Alipay unit to a company mostly owned by the chief executive officer of Alibaba Group.
Yahoo had a board meeting to review the transaction and will consider a dividend payment, AllThingsD reported May 17. The website said the deal is likely to value the portion of Yahoo’s holdings at about $7 billion, or 20 percent of Alibaba’s $35 billion enterprise valuation. After a potential IPO, Yahoo could sell more of its stake, AllThingsD reported.
Active Discussions
Yahoo, which failed to keep pace with growth at Google and Facebook Inc., is pursuing active discussions with the Chinese company.
Yahoo had also been in discussions about selling its stake in Yahoo! Japan to Tokyo-based Softbank Corp. Those talks have gone cold over price and have not resumed.
Yahoo considered a deal with Alibaba and Softbank that would cut its stake in Alibaba to about 15 percent from about 40 percent.
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News, visit the Electronics America blog.
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visit the Commercial and Residential Real Estate blog.
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