LinkedIn revealed its Q3 2016 earnings lately. It obtained surprised performance but still got slow user growth. The reason for slow of user growth has connection with the acquisition made by Microsoft.
LinkedIn announced on Thursday that its revenue of Q3 was $ 960 million, increased by 23% yoy. However, the increas of Q3 2015 was 37% yoy.
Brent Thill from UBS claimed that the increase of LinkedIn declined sharply and its business did not run as well as expected. It may give LinkedIn some vitality if Microsoft has the acquisition done soon.
The quarterly documents submitted on Thursday showed that its sales and user growth get close to the highest point and it will be hard to maintain the fast growth rate as it did before. Its growth rate will be declining.
LinkedIn is the biggest world professional networking site. It was established in December of 2002 and turned to business in 2003. It quoted share in New York Exchange Stock in May, 2011. On June 11, 2016, LinkedIn and Microsoft came into business for merging. According to the agreement, Microsoft will acquire LinkedIn at $196 per share, with a total value of $ 26.2 million. The terms of payment is full cash and this acquisition is supposed to be done by the end of this year.
The reason why Microsoft acquires LinkedIn is to make full advantage of LinkedIn’s membership data to explore more business. LinkedIn has 467 million existing subscribers, increased by 18% this year. The monthly visitors traffic of LinkedIn homepage reached 106 million times, increased by 6%. The login times of subscribers increased by 27%.
LinkedIn membership database becomes an important point from Microsoft and Salesforce competition. Salesforce sent offer to LinkedIn for acquisition before Microsoft made deal with LinkedIn. Salesforce made pressure to supervision department last month that it wasn’t fair competition to other companies that Microsoft would obtain a great amount of membership data from this acquisition. The supervision department should stop the acquisition between these two companions.
LinkedIn made new record in sales this quarter, its business of hiring solutions increased by 24%, up to $ 623 million. This business section helps enterprises to recognize target applicants so that it could attract more membership. Many of enterprises also put more money on this section. Advertising business is also one of business sections that grows fast.Its prime subscription service also increased by 17%. The net profit of LinkedIn was $ 8.6 million, with 6 cents EPS.
LinkedIn share was closed at $ 188.63 on Thursday, with a 16% accumulative decline this year.