Change is rarely a painless process. Consider LinkedIn, which is taking a beating on Wall Street as it tries to reinvent itself as a mobile-first platform.
In light of poor first-quarter
guidance, the company’s stock tanked nearly 40% on Friday.
LinkedIn is expecting revenue of about $820 million in the first quarter -- considerably less than analysts’ average
estimates of $867.1 million, according to data compiled by Bloomberg.
Rather than a hindrance to growth, however, analysts see LinkedIn’s mobile awakening as necessary to long-term
sustainability and success.
Particularly critical is Project Voyager -- a faster and more intuitive app that LinkedIn debuted last December -- according to RBC Capital analyst Mark
Mahaney.
“We believe this app could lead to greater engagement on the service,” Mahaney wrote in a research note issued earlier this week.
Since the launch of Voyager,
LinkedIn says mobile engagement and sharing are up by nearly 40%, year-over-year.
Overall, mobile grew about 300% faster than overall member activity during the fourth quarter, and now
represents 57% of all traffic, LinkedIn reported on Thursday.
At the moment, however, it’s not clear how better mobile engagement can help LinkedIn’s struggling marketing-services
business -- which connects companies with potential customers -- and its weakening recruiter business.