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LinkedIn Implodes, Twitter Erupts Over Report It’ll Blow Itself Up

LinkedIn ( LNKD ) shares lost nearly half their value on the stock market today after the professional networker announced grim 2016 forecasts. Then a report that  Twitter ( TWTR ) would radically revamp its service triggered outrage from core users. Twitter CEO Jack Dorsey on Saturday denied major changes were imminent. Twitter can help make connections in real-time based on dynamic interests and topics, rather than a static social/friend graph. We get it. — Jack (@jack) February 6, 2016 That was in response to a late Friday  Buzzfeed report  that Twitter would adopt a new algorithmic timeline, as soon as next week. The new system would order tweets based on what Twitter thinks you want to see, rather than the current reverse chronological order. The goal would be to make Twitter more attractive to new and casual users so they can see more targeted tweets, eliminating the unwanted posts. It was unclear if Twitter would make the change optional or mandatory, Buzzfeed said. The latter would greatly upset power users such as journalists, who use the chronological timelime to spot and follow breaking news. Twitter was abuzz with angry posts Friday night and Saturday morning, with #RIPTwitter quickly trending and complaints that Twitter would be become like Facebook ( FB ). Twitter staff meeting: ‘Our stock is crashing. How do we fix Twitter?’ ‘Make the user experience worse every week?’ ‘Crazy enough to work!’ — Josh Jordan (@NumbersMuncher) February 6, 2016 Facebook has used algorithms for years so people see posts from their favorite friends or sources. Facebook’s ongoing efforts have worked for the company, with more than one billion daily users — and still growing. Twitter’s growth, meanwhile has basically stalled, though revenue has swelled due to higher ad revenue and other monetization. Twitter CEO Jack Dorsey, since returning to the company late last year, has signaled a desire to shake up the company. Twitter reportedly is mulling an end to its 140-character limit on tweets. That’s another rumored move that would move Twitter in the direction of Facebook. LinkedIn also is going through a strategy shift. Late Thursday, LinkedIn reported better-than-expected Q4 earnings. But it gave 2016 revenue and earnings targets far below Wall Street views. Part of the reason was LinkedIn’s decision to shut its Lead Accelerator business, which had technology aimed at helping marketers better target prospects. LinkedIn said the project wasn’t worth the time and money, but analysts said they may have to rethink LinkedIn’s prospects. Twitter reports earnings on Wednesday, with analysts expecting a 48% revenue rise to $709.9 million, with earnings per share ex items flat at 12 cents. #SuggestedTwitterAlgorithims Posting “your an idiot” takes you to a grammar basics cheat sheet. — Renna (@RennaW) February 6, 2016 Twitter shares fell 7% on Friday to a record closing low. LinkedIn crashed nearly 44% to a 3-year low. Facebook skidded nearly 6% on Friday and more than 7% for the week, despite hitting a record high on Tuesday.

LinkedIn Just Imploded, Now Twitter Plans To Blow Itself Up

LinkedIn ( LNKD ) shares lost nearly half their value on the stock market today after the professional networker announced grim 2016 forecasts. Now Twitter ( TWTR ) reportedly is mulling a major shift with the hopes of winning over new customers, but potentially alienating its power users. Twitter will adopt a new algorithimic timeline, as soon as next week Buzzfeed reported late Friday. The new system would order tweets based on what Twitter thinks you want to see, rather than the current reverse chronological order. The goal is to make Twitter more attractive to new and casual users so they can see more targeted tweets, eliminating the unwanted posts. It’s unclear if Twitter will make the change optional or mandatory, Buzzfeed said. The latter would greatly upset power users such as journalists, who use the chronological timelime to spot and follow breaking news. Twitter was abuzz with angry posts Friday night. Twitter staff meeting: ‘Our stock is crashing. How do we fix Twitter?’ ‘Make the user experience worse every week?’ ‘Crazy enough to work!’ — Josh Jordan (@NumbersMuncher) February 6, 2016 Facebook has used alogrithims for years so people see posts from their favorite friends or sources. Facebook’s ongoing efforts have worked for the company, with more than one billion daily users — and still growing. Twitter’s To-Do List: 1) Algorithmic sorting that no one asked for … … … … … … … … … 173) Edit button that every asks for — Matt Mitovich (@MattMitovich) February 6, 2016 Twitter’s growth, meanwhile has basically stalled, though revenue has swelled due to higher ad revenue and other monetization. @ethanradd @BlackIrishI I hate Facebook! — Kevin Budds (@BuddsKevin) February 6, 2016 LinkedIn also is going through a strategy shift. Late Thursday, LinkedIn reported better-than-expected Q4 earnings. But it gave 2016 revenue and earnings targets far below Wall Street views. Part of the reason was LinkedIn’s decision to shut its Lead Accelerator business, which had technology aimed at helping marketers better target prospects. LinkedIn said the project wasn’t worth the time and money, but analysts said they may have to rethink LinkedIn’s prospects. Twitter reports earnings on Wednesday, with analysts expecting a 48% revenue rise to $709.9 million, with earnings per share ex items flat at 12 cents. #SuggestedTwitterAlgorithims Posting “your an idiot” takes you to a grammar basics cheat sheet. — Renna (@RennaW) February 6, 2016 Twitter shares fell 7% on Friday to a record closing low. LinkedIn crashed nearly 44% to a 3-year low. Facebook skidded nearly 6% on Friday and more than 7% for the week, despite hitting a record high on Tuesday.

Why LinkedIn Stock Is Crashing And Analysts Are Slashing Targets

Analysts slashed their stock price forecasts on LinkedIn ( LNKD ) following a fourth-quarter earnings report late Thursday that included a 2016 outlook far below expectations. Even though LinkedIn’s fourth-quarter earnings report soundly beat expectations, the stock closed down a whopping 44% at 108.38, striking a three-year low in massive trade in the stock market today . Perhaps the most startling announcement in the Q4 earnings report was that LinkedIn will shutter a business called Lead Accelerator. That decision cut the company’s 2016 revenue forecast by $50 million. Lead Accelerator was created out of LinkedIn’s $175 million acquisition of Bizo in July 2014. The technology focuses on boosting the ability of marketers to target prospects and had been considered a high-growth opportunity. LinkedIn said the manpower needed to boost Lead Accelerator was not worth the time and effort, saying it was “a higher-than-anticipated demand on resources.” The remaining assets from the Bizo acquisition will be integrated into the company’s Sponsored Content unit, which is part of the larger Marketing Solutions Group. With the change, LinkedIn said it was willing to accept some short-term pain for long-term gain, but it still raised concerns. “The exit from Bizo leaves our confidence shaken about the pace of new monetization of LinkedIn’s unique data set,” wrote Pacific Crest analyst Evan Wilson, who slashed his price target to 190 from 280. “We think LinkedIn is making a gigantic mistake stepping back on investment in its ad network. We would understand if the ad network had grave issues with privacy or if there was no demand from advertisers, but we can see from Alphabet ( GOOGL ), Facebook ( FB ) and Amazon ( AMZN ) that this is not the case,” Wilson wrote. For the year, LinkedIn expects revenue in a range between $3.6 billion and $3.65 billion. The consensus among analysts is $3.9 billion. It expects EPS in the range of $3.05-$3.20 per share, below the consensus of $3.67. LinkedIn provided three reasons for its weaker-than-expected earnings forecast for 2016. In addition to the fading out of Lead Accelerator, it cited a slowdown in premium display advertising as it goes through a shift in strategy. That clipped another $50 million off the revenue forecast. The third reason for weakness is currency headwinds in emerging markets, due to “current global economic conditions.” Some analysts wondered if LinkedIn’s problems go deeper than that. “We do not believe that this alone can account for all of the downside to guidance, implying to us material deceleration in the core business,” wrote RBC Capital Markets analyst Mark Mahaney, who cut his price target on LinkedIn to 156 from 300. LinkedIn has three revenue streams. The largest is Talent Solutions, used by companies to recruit employees and for training and education. Revenue rose 45% to $535 million. Marketing Solutions, which sells ads, rose 20% to $183 million. Premium Subscriptions, fees paid by users for enhanced services, increased 19% to $144 million. Another potential red flag is that page views among all LinkedIn users showed a deceleration in growth. Credit Suisse analyst Stephen Ju cut his price target on LinkedIn to 230 from 300. Cowen & Co. analyst John Blackledge cut his price target to 140 from 272.