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We've Seen This Before: LinkedIn Tumbles as 2014 Forecast Misses Forecast

Stocks in this article: LNKD


NEW YORK (TheStreet) -- LinkedIn (LNKD) was tumbling in aftermarket trading as the professional services website forecast revenue for 2014 that fell short of analyst estimates.

The Mountain View, Cal.-based company said revenue for the year is likely to total $2.05 billion, less than the $2.16 billion average analyst estimate, according to Thomson Reuters. First-quarter sales guidance for $455 million to $460 million missed consensus by as much as $10 million.

Shares were falling 8% to $205.51 in extended trading, despite the fact company beat expectations in the fourth quarter.

LinkedIn, which has a history of low-balling forecasts which it habitually beats, posted net income of 39 cents a share in the fourth-quarter, edging a consensus analyst estimate of 38 cents a share.

Quarterly revenue jumped nearly 50% year-over-year to $447.2 million, led by increased demand for its Talent Solutions, a premium-fee recruitment package, which represented more than half total sales. The service's revenue totaled $245.6 million, a 53% year-over-year increase though less than the third quarter's 62% jump.

A diversified revenue stream has allowed the company to hedge its bets. Advertising revenue, a quarter of total income, jumped 36% to $113.5 million, while premium subscriptions pulled in one-fifth of sales, 48% higher than the year earlier.

In a move to diversify further, LinkedIn announced its acquisition of Bright, a jobs search engine which uses patented analytics technology to match employers with suitable candidates.

"By leveraging Bright's data-driven matching technology, machine-learning algorithms and domain expertise, we can accelerate our efforts and build out the Economic Graph," said SVP of products and user experience Deep Nishar.

Since 2012, the company has been fleshing out Economic Graph, a project charting real-time trends in the international job market to identify recruitment opportunities.

"We want to digitally map the global economy, identifying the connections between people, jobs, skills, companies, and professional knowledge," CEO Jeff Weiner said upon the project's launch.

The deal is worth around $120 million, consisting of 73% stock and remainder in cash, and is expected to close over the first quarter.

--By Leon Lazaroff and Keris Alison Lahiff in New York.

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