Chowdhry: 'Challenges' Remain At LinkedIn

In an email sent to investors on Friday, Trip Chowdhry of Global Equities Research assures challenges remain at LinkedIn Corp LNKD, following its earnings beat on Thursday evening.

The tech company reported earnings of $0.55 per share on revenue of $711.74 million, doubling its guidance, which called for earnings of $0.28 per share on sales of $672.5 million. The results also beat the Street’s consensus estimate, which pointed towards earnings of $0.32 per share on sales of $681.56 million.

After the report, Chowdry answered a couple of questions that shed light on the results.

The Fundamental Problem Of Ad-Supported Business

Chowdry thinks the problem With Ad-supported business - including Google Inc GOOG GOOGL, Yahoo! Inc. YHOO, LinkedIn, Facebook Inc FB and Twitter Inc TWTR is that “engineers from these vendors have joined Advertising companies and Ad-Agencies, and since they are technically prudent, they are hitting hard on” the above mentioned tech companies “on Algorithm manipulation and Ad Monetization practices.

The analysts reminds investors that advertisers on Facebook will now pay only for clicks on Ads, and not on Shares and Likes, like they used to. This limits revenue acceleration in Facebook’s near-term, the expert assures.

Related Link: Why Wall Street Isn't Freaking Out About LinkedIn's Earnings

Chowdry goes on to explain that, in the past, these tech giants benefited from the “technical ignorance” of advertisers. However, this is not the case any longer. Nonetheless, he notes, “this is a fixable problem, but may take a few quarters.”

Global Equities Research’s View On Lynda.com

Regarding Lynda.com, Chowdry says his firm has not come across anyone using it yet. However, the analysts will continue to monitor the situation and provide updates when pertinent.

The expert comments, however, that Global Equities Research has seen “IT Services Companies and Bay Area Companies encouraging employees and mid-management employees to take Classes at Coursera.”