The value of LinkedIn shares dropped by more than 10% after issuing a weaker than expected forecast for the current quarter.
The social site said it expects revenues of between $342m to $347m (£220m to £223m) in the April to June quarter. Business analysts had expected a figure closer to $359m. The lower than expected figures raised fears that LinkedIn’s growth may be slowing.
LinkedIn made a net profit of $22.6m in the three months to the end of March, which was up $5m during the same period a year ago.
Reasons for the drop in profits are unknown, but one of the reasons may be the growth in social media sites being accessed on mobile devices. These screens are much smaller than a traditional desktop and leave less room for advertising. Social media sites mainly rely on advertising as their main source of revenue.
LinkedIn have said that they will look at a new approach to advertising, especially on mobile devices. Steve Sordello, head of finance at LinkedIn said: “We are seeing some encouraging early signs, but it’s of a very small scale right now”.
LinkedIn is a social networking platform for professionals looking to connect with other business or other professionals, and can also be used as a recruitment tool.
The site now has 218 million registered users and has seen the value of shares increase steadily over the past 18 months.