Daily Tech Snippet: Friday, February 5

• LinkedIn Shares Plummet 30% After Sales Outlook Trails Estimates: LinkedIn Corp. shares lost almost a third of their value after the professional networking site forecast a year of slower revenue growth amid signs of weakness in sales of advertising and marketing tools. Revenue will be about $820 million in the first quarter, and $3.6 billion to $3.65 billion for 2016, the company said in a statement Thursday. That missed analysts’ average estimate for $867.1 million and $3.9 billion, according to data compiled by Bloomberg. LinkedIn had 414 million users in the fourth quarter, up from 396 million in the prior period. While Chief Executive Officer Jeff Weiner has made investments to diversify the business, like acquiring education website Lynda.com for $1.5 billion last year, it will be a while before those efforts contribute meaningfully to revenue. In the meantime, LinkedIn is facing a slowdown in its marketing-services business, which companies use to find potential customers, show them ads and relevant information and generate sales leads. Sales to recruiters, who use LinkedIn to find candidates for jobs, are also slowing. LinkedIn is narrowing its focus in some areas, which is hurting sales. For example, it’s discontinuing a tool that helps marketers find leads, incorporating the technology into its sponsored content business instead, contributing to a slowdown in its marketing solutions business. Revenue in the marketing solutions division rose 20 percent in the fourth quarter to $183 million. The professional-networking website is also facing slower economic growth in Europe and Asia, though it said China is its fastest-growing country for new members. The company has a standalone app for Chinese users and has devoted much of its efforts over the past year to push deeper into that market. For the fourth quarter, LinkedIn reported a loss attributable to common shareholders of $8.43 million, compared with the average estimate for $50.2 million. Revenue climbed 34 percent to $862 million, topping the prediction for $857.4 million. 

• Spotify Links Up With Amazon’s Echo: It took a while, but Spotify and Amazon have started playing nicely: The streaming music service is now integrated into the Echo, Amazon’s connected speaker/shopping stimulator/robot spy machine you willingly install in your own house. Previously you could get Spotify working on Echo, but only if you worked at it. Now you can ask Alexa, Amazon’s AI assistant, to play Spotify, or you can control it from the Spotify app on your phone. The only catch is that the integration only works for the 20 million to 25 million people who are paying Spotify subscribers, not the ones using the free, ad-supported version of the service. That sort of makes sense, since the Echo doesn’t have any place to show the display ads that run on the free version of Spotify; on the other hand, Echo is integrated with Pandora, which also has display ads.

• Software maker Atlassian's revenue up 45 percent: Australian Atlassian reported a 44.7 percent increase in quarterly revenue as more customers purchased its software that help companies collaborate and manage their operations. Net income inched up to $5.1 million in the second quarter ended Dec. 31 from $5.0 million a year earlier. On a per shares basis, profit was flat at 3 cents. Atlassian, which listed on the Nasdaq in December, said revenue rose to $109.7 million from $75.8 million. The company added more than 2,600 net new customers in the quarter.

• Indian IT services growth seeng slowing: Indian IT services exports are likely to grow at a slower pace next fiscal year than in the recent past as global clients rein in technology spending, an industry lobby group said on Thursday. The cutback on routine IT services is likely to push firms including Tata Consultancy Services Ltd and Infosys Ltd to sharpen their focus on high-margin digital services, analytics and artificial intelligence to cushion the impact on earnings. India's IT and software services export revenue is likely to grow by 10-12 percent in the fiscal year beginning on April 1 to as much as $121 billion, the National Association of Software and Services Companies (Nasscom) said. Exports in the current fiscal year ending March are estimated to grow 12.3 percent to $108 billion, at the lower end of Nasscom's projection, with digital services seen up 19 percent. IT services growth seen slowing as clients curb spending. The shift towards new services could also trigger a wave of mergers and acquisitions in the sector, after Indian IT companies spent $2.4 billion on digital deals in 2015 - three times higher than the year before, Nasscom said. "To acquire digital skills companies will have to re-skill employees and acquire new technologies and that is likely to continue," it said. Including domestic sales, total revenue of the Indian IT sector, which accounts for 9.3 percent of the country's economic output, likely rose 8.3 percent to $143 billion in the fiscal year ending March 31, Nasscom said.