Wall Street Beat: Internet stocks under great pressure
Un uptick in IT spending is supposed to boost sales for tech vendors this year. However, fierce competition in social media and e-commerce companies, which gives them a great appetite for cash to fuel growth, is getting investors nervous about some Internet stocks. Revenue was up a healthy 46 percent year over year to 473.2 million U.S. dollars, Linkedln reported on Thursday for the first quarter.
The CEO Jeff Weiner said in a statement: “We made significant progress against several strategic priorities including expanding internationally with our China launch, extending our shift to content marketing, and furthering our goal to make Linkedln the definitive professional publishing platform by giving members the ability to publish long-form content.”
Those efforts presented progress on finance. Revenue from Marketing Solutions products was 101.8 million U.S. dollars in total, increasing 36 percent year over year. Diversified programs developed for the recruitment and job search market also earned profit.
Revenue from Talent Solutions products was 275.9 U.S. dollars in total, increasing 50 percent year over year. Sales from Premium Subscription products was 95.5 million U.S. dollars in total, increasing 46 percent.
However, creating and marketing those programs cost money, and compared to a profit of 22.6 million U.S. dollars for the year-earlier period, Linkedln reported a loss of 13.4 million U.S. dollars for the quarter.
Linkedln predict 2014 revenue below analyst estimate. The relevant data proves what Internet and social media firms are dealing with: expectation for rapid growth, which needs to be spent money on to realize.