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Thursday, August 1, 2013

LinkedIn’s Profits Soar as User Growth Accelerates

You receive one of those e-mails from LinkedIn with a request from someone asking to connect with you. Why not, you say, and click “accept.”

To individuals and businesses, reaching out to those ever-expanding networks is immensely appealing, and that helped drive LinkedIn’s strong second-quarter financial performance, which blew past Wall Street’s expectations on revenue, profit and cash flow.

Revenue was up 59 percent compared with the same quarter a year ago, coming in at $363.7 million. Net income was $3.7 million, compared with $2.8 million a year ago. But after stripping out stock compensation expenses and other one-time items, profit was $44.5 million, or 38 cents a share, compared with $18.1 million, or 16 cents a share, a year earlier. (Analysts had expected 31 cents a share, according to Thomson Reuters.)

Investors were certainly eager to connect with that kind of growth, sending shares of the company up more than 7 percent in after-hours trading, to around $228 a share. (And that was after a 4.5 percent gain during regular trading.)

A striking number in the earnings report, though, was the subscriber growth.

LinkedIn ended the quarter with 238 million members, up 37 percent from the second quarter of 2012 and 9 percent from the first quarter. About two-thirds of those members were outside the United States.

More precisely, in just three months, LinkedIn added 20 million new users globally. To put that in context, Facebook, which is five times LinkedIn’s size and appeals to a much wider audience, managed to add only about 40 million new users in that same time.

In a conference call with analysts, LinkedIn’s chief executive, Jeff Weiner, said that the subscriber growth rate had accelerated for the first time since 2011 as business professionals in developing countries like India and Brazil signed up. “We continue to see strength” in the third quarter, he said.

Over the longer term, the company’s target market is the 600 million knowledge workers in the world, he said. (Unlike Facebook and Twitter, two rival social networks, LinkedIn isn’t blocked in China, which is a vibrant market for the service.)

LinkedIn, which built much of its business around paid services for recruiters and job hunters, is just beginning to introduce other products aimed at helping sales people reach new prospects and helping companies build their brands. For example, sponsored articles, which allow companies to put custom content in front of LinkedIn users, have just become widely available to advertisers.

And the company has yet to fully make the transition to mobile devices. Mobile use is up, but the company’s apps lack much of the functionality of the desktop site. “It’s still very early days,” Mr. Weiner said.



LinkedIn’s Profits Soar as User Growth Accelerates

You receive one of those e-mails from LinkedIn with a request from someone asking to connect with you. Why not, you say, and click “accept.”

To individuals and businesses, reaching out to those ever-expanding networks is immensely appealing, and that helped drive LinkedIn’s strong second-quarter financial performance, which blew past Wall Street’s expectations on revenue, profit and cash flow.

Revenue was up 59 percent compared with the same quarter a year ago, coming in at $363.7 million. Net income was $3.7 million, compared with $2.8 million a year ago. But after stripping out stock compensation expenses and other one-time items, profit was $44.5 million, or 38 cents a share, compared with $18.1 million, or 16 cents a share, a year earlier. (Analysts had expected 31 cents a share, according to Thomson Reuters.)

Investors were certainly eager to connect with that kind of growth, sending shares of the company up more than 7 percent in after-hours trading, to around $228 a share. (And that was after a 4.5 percent gain during regular trading.)

A striking number in the earnings report, though, was the subscriber growth.

LinkedIn ended the quarter with 238 million members, up 37 percent from the second quarter of 2012 and 9 percent from the first quarter. About two-thirds of those members were outside the United States.

More precisely, in just three months, LinkedIn added 20 million new users globally. To put that in context, Facebook, which is five times LinkedIn’s size and appeals to a much wider audience, managed to add only about 40 million new users in that same time.

In a conference call with analysts, LinkedIn’s chief executive, Jeff Weiner, said that the subscriber growth rate had accelerated for the first time since 2011 as business professionals in developing countries like India and Brazil signed up. “We continue to see strength” in the third quarter, he said.

Over the longer term, the company’s target market is the 600 million knowledge workers in the world, he said. (Unlike Facebook and Twitter, two rival social networks, LinkedIn isn’t blocked in China, which is a vibrant market for the service.)

LinkedIn, which built much of its business around paid services for recruiters and job hunters, is just beginning to introduce other products aimed at helping sales people reach new prospects and helping companies build their brands. For example, sponsored articles, which allow companies to put custom content in front of LinkedIn users, have just become widely available to advertisers.

And the company has yet to fully make the transition to mobile devices. Mobile use is up, but the company’s apps lack much of the functionality of the desktop site. “It’s still very early days,” Mr. Weiner said.



Russian Bloggers Welcome Snowden With Jokes, Praise and Job Offers

When the former United States intelligence analyst Edward J. Snowden was finally allowed to leave his limbo in the transit zone of Moscow’s Sheremetyevo airport on Thursday with a permit granting him political asylum in Russia, Russian bloggers, activists, entrepreneurs and journalists posted messages on social networks welcoming him to his new home.

The messages mixed praise for his courage in leaking details of the National Security Agency’s vast surveillance programs with sardonic asides about his choice to live in a country where life can be nasty, brutish and short for whistle-blowers and democracy activists.

Mark Feygin, a Russian lawyer who defended three members of the activist collective Pussy Riot jailed for a political stunt, wrote on Twitter: “Snowden doesn’t quite understand that his acceptance of Russian asylum is the same as his agreeing to receive his inheritance from a Nigerian lawyer by e-mail.”

Pavel Durov, the founder of the most prominent Russian social network, VKontakte, offered Mr. Snowden immediate employment in data security:

Today Edward Snowden â€" the man that exposed the crimes of the U.S. intelligence agencies against citizens across the globe â€" received temporary asylum in Russia. At such moments, one feels proud of our country and sadness over U.S. policy â€" a country that has betrayed the principles that it was once built upon.

We invite Edward to St. Petersburg and will be thrilled if he decides to join our stellar team of programmers at VKontakte. At the end of the day, there is no European Internet company more popular than VK. I think Edward might be interested in protecting the personal data of our millions of users.

Vladimir Varfolomeyev, a host at the radio station Ekho Moskvy, said: “The Russian Federation took the correct decision on Snowden. We cannot give him to the U.S. However, the asylum seeker picked a very odd place of refuge.”

The Russian news site Sputnik & Pogrom joked, “For crimes against the American government, a U.S. court sentenced Snowden to the highest form of punishment â€" life in Russia.”

In a series of Twitter updates, the ecological activist Yevgenia Chirikova wrote:

I’m happy for Snowden. If he returns to the U.S., torture and death await him. Russia is most certainly better â€" a huge country, he’ll find somewhere to go.

Snowden can be saved not by the Russian government, but by its vastness. Lots of people have saved themselves that way.

If Snowden doesn’t want to be a toy in someone else’s game, he will lose himself in the endless Russian countryside. God give him strength!

The journalist Maxim Shevchenko suggested that Mr. Snowden, like the WikiLeaks founder Julian Assange, could soon be given his own talk show on Russia Today, the Kremlin-owned network known for its consistent criticism of the United States government.

The Gruppa Voina Twitter feed, run by Pyotr Verzilov, the husband of the jailed Pussy Riot activist Nadezhda Tolokonnikova, seconded a comment from a blogger who wrote, “Poor Snowden â€" the guy thinks he’s free.”

Ilya Mouzykantskii is a freelance journalist and a New York Times intern in Moscow. Follow him on Twitter @ilyamuz.

Robert Mackey also remixes the news on Twitter @robertmackey.



Russian Bloggers Welcome Snowden With Jokes, Praise and Job Offers

When the former United States intelligence analyst Edward J. Snowden was finally allowed to leave his limbo in the transit zone of Moscow’s Sheremetyevo airport on Thursday with a permit granting him political asylum in Russia, Russian bloggers, activists, entrepreneurs and journalists posted messages on social networks welcoming him to his new home.

The messages mixed praise for his courage in leaking details of the National Security Agency’s vast surveillance programs with sardonic asides about his choice to live in a country where life can be nasty, brutish and short for whistle-blowers and democracy activists.

Mark Feygin, a Russian lawyer who defended three members of the activist collective Pussy Riot jailed for a political stunt, wrote on Twitter: “Snowden doesn’t quite understand that his acceptance of Russian asylum is the same as his agreeing to receive his inheritance from a Nigerian lawyer by e-mail.”

Pavel Durov, the founder of the most prominent Russian social network, VKontakte, offered Mr. Snowden immediate employment in data security:

Today Edward Snowden â€" the man that exposed the crimes of the U.S. intelligence agencies against citizens across the globe â€" received temporary asylum in Russia. At such moments, one feels proud of our country and sadness over U.S. policy â€" a country that has betrayed the principles that it was once built upon.

We invite Edward to St. Petersburg and will be thrilled if he decides to join our stellar team of programmers at VKontakte. At the end of the day, there is no European Internet company more popular than VK. I think Edward might be interested in protecting the personal data of our millions of users.

Vladimir Varfolomeyev, a host at the radio station Ekho Moskvy, said: “The Russian Federation took the correct decision on Snowden. We cannot give him to the U.S. However, the asylum seeker picked a very odd place of refuge.”

The Russian news site Sputnik & Pogrom joked, “For crimes against the American government, a U.S. court sentenced Snowden to the highest form of punishment â€" life in Russia.”

In a series of Twitter updates, the ecological activist Yevgenia Chirikova wrote:

I’m happy for Snowden. If he returns to the U.S., torture and death await him. Russia is most certainly better â€" a huge country, he’ll find somewhere to go.

Snowden can be saved not by the Russian government, but by its vastness. Lots of people have saved themselves that way.

If Snowden doesn’t want to be a toy in someone else’s game, he will lose himself in the endless Russian countryside. God give him strength!

The journalist Maxim Shevchenko suggested that Mr. Snowden, like the WikiLeaks founder Julian Assange, could soon be given his own talk show on Russia Today, the Kremlin-owned network known for its consistent criticism of the United States government.

The Gruppa Voina Twitter feed, run by Pyotr Verzilov, the husband of the jailed Pussy Riot activist Nadezhda Tolokonnikova, seconded a comment from a blogger who wrote, “Poor Snowden â€" the guy thinks he’s free.”

Ilya Mouzykantskii is a freelance journalist and a New York Times intern in Moscow. Follow him on Twitter @ilyamuz.

Robert Mackey also remixes the news on Twitter @robertmackey.



Flares in Canada at the Thought of Verizon

OTTAWA â€" While it remains far from certain that Verizon will enter the Canadian wireless market, just the idea has set off a near panic in Canada’s wireless industry.

Prominent ads have appeared across the country over the last few weeks denouncing any incursion by Verizon as a threat to Canada’s sovereignty and economic well being.

“How does losing thousands of jobs in the cellphone industry help Canada? It doesn’t,” one ad said.

In an “open letter to all Canadians,” George Cope, the president and chief executive of Bell Canada, one of the three major wireless carriers in the country, wrote that “we would like to ensure Canadians clearly understand a critical situation impacting their world-leading wireless industry.”

The loud actions from Bell Canada and the country’s two other major carriers, Telus and Rogers Communications, might suggest that Verizon is hoping to buy one them. But that would be prohibited under foreign ownership laws. Instead, there are rumblings that Verizon may enter Canada by buying two start-up carriers, one of which is nearly insolvent and the other is already Russian-owned and also struggling.

“We’re having a national battle about an American company buying a Russian company that was once an Egyptian company,” said Iain Grant, an analyst with the Seaboard Group, a telecommunications consulting firm based in Montreal. “Where else can that happen?”

Verizon has declined to comment about the Canadian industry reaction. But when asked about the company’s plans for Canada during a conference call with analysts on July 18, Francis J. Shammo, the company’s chief financial officer, appeared far from committed to a northern expansion.

“Let me emphasize this is really an exploratory exercise for us,” he said. “Obviously some of the cautions here are the regulatory environment, a foreign investor coming into the Canadian market and what does that mean?”

Perhaps tellingly, the Canadian government’s index of lobbyists does not include anyone representing Verizon, although it can take up to 60 days for new listings to appear.

If Verizon does decide to purchase Wind Mobile, which is owned by VimpelCom, a Russian company based in the Netherlands, and Mobilicity, which is mired in debt and losing about $30 million a month, it can expect a warm reception from Prime Minister Stephen Harper. His Conservative government has sided with a widespread sentiment among Canadians that wireless service is excessively expensive and has introduced a series of measures meant to create a strong fourth national carrier.

The idea that Canadians pay too much and get too little was initially stoked by a 2009 report from the Organization for Economic Co-operation and Development that ranked Canada the third most expensive country in the developed world for “medium usage” cellphone plans, after the United States and Spain. Rates have dropped substantially since then. But a study released this year by Canada’s telecommunications regulator concluded that prices in two of the three categories into which it divides wireless services “fall on the high side of the average” in an international comparison.

Aside from posting a petition demanding better cellphone service terms on his Facebook page, Mr. Harper has introduced measures to help turn start-up carriers from also-rans into market leaders. First, he has barred the three big carriers from buying Wind or Mobilicity. The big three companies must also sell service on their networks at wholesale rates to start-ups to enable them to offer nationwide roaming. And start-ups can acquire more radio spectrum at a government auction scheduled for January than the established players can buy.

Although Verizon had $75.9 billion in revenue last year, Canada would treat it as a start-up if it bought Wind or Mobilicity. And that treatment, said Mirko Bibic, the chief legal and regulatory officer at Bell Canada, is behind the complaints from the established carriers.

“We have absolutely no issues with competition or more competition or vigorous competition,” Mr. Bibic said. “But it has to be a level playing field.”

Telus, which is based in British Columbia, has asked the Federal Court of Canada for a judicial review of some of the government’s concessions to start-ups. So far, the government has been unmoved. James Moore, the industry minister, said on Wednesday that it would not change its policies.

It is unclear whether Verizon would be a force for lower cellphone prices in Canada. But the company could conceivably deal with one major complaint from Canadians: even brief trips to the United States with a Canadian smartphone can produce hundreds of dollars in data roaming charges.

Dvai Ghose, a telecommunications analyst with Canaccord Genuity, cautions that coming to Canada might not make sense for Verizon. Both Wind and Mobility are “subprime assets,” he said, with customers that Verizon probably would not want to retain. And buying the two companies along with the radio spectrum and other investments would most likely involve at least $3 billion, by his estimate.

While that is a relatively small amount for Verizon, Mr. Ghose noted that Canada has only 26.8 million wireless subscribers compared with Verizon’s 100 million subscribers. Mr. Ghose estimates that Verizon would attract about five million Canadian customers.

“I think Verizon is going to come,” Mr. Ghose said. “But I also think it’s going to be tougher than Verizon expects.”



Jailed Pussy Riot Activist’s Defiant Speech at Parole Hearing

A Euronews video report on the parole hearing of Pussy Riot activist Nadezhda Tolokonnikova last week in Saransk, Russia.

As my colleague Melena Ryzik reported, the two members of the Russian activist collective Pussy Riot who remain imprisoned were both denied parole last week. At separate hearings, Maria Alyokhina and Nadezhda Tolokonnikova were judged to be insufficiently repentant for the “punk prayer” they performed in a Moscow cathedral last year, calling on the Virgin Mary to “send Putin packing!”

The women, who were arrested together last March and sentenced to two years in prison for “hooliganism aimed at inciting religious hatred,” both denounced the Russian justice system during the parole hearings in Perm and Saransk.

On Thursday, the literary journal n+1 published an English translation of Ms. Tolokonnikova’s defiant statement, in which she said: “I know that in Russia under Putin I will never receive parole. But I came here, to this courtroom, in order to cast light once again on the absurdity of the justice of the oil-and-gas-resource kingdom, which condemns people to rot pointlessly in camps.”

During her parole hearing last week, the Pussy Riot activist Nadezhda Tolokonnikova referred to protests in Moscow following the conviction of the anti-corruption blogger Aleksei Navalny.RIA Novosti During her parole hearing last week, the Pussy Riot activist Nadezhda Tolokonnikova referred to protests in Moscow following the conviction of the anti-corruption blogger Aleksei Navalny.

As one Russian art blogger explained, Ms. Tolokonnikova also took issue with the charge that she had failed to display “a positive attitude” in the penal colony by boycotting an essentially mandatory beauty contest for female prisoners. According to the n+1 translation by Kevin M. F. Platt, Ms. Tolokonnikova told the court:

The style of the Putin regime is a conservative, secret-police aesthetic. By no accidentâ€"and actually quite logicallyâ€"this aesthetic persistently samples and recreates the principles of two previous regimes, both of them historical precedents to the present one: the tsarist-imperial aesthetic and the wrongly understood aesthetic of Socialist Realism, complete with workers from some kind of standard-issue Train-Car Assembly Plant of the Urals. Given the clumsiness and thoughtlessness with which all of this is being recreated, the present political regime’s ideological apparatus deserves no praise. Empty space, in its minimalism, is more attractive and tempting than the results of the aesthetic efforts of the current regime.

This worthless aesthetic is lovingly recreated by each and every state institution in Russia, including of course the prison colonies, which form such an important part of the repressive machine of the state.

And so, if you are a woman, and what is more if you are a young woman and even the slightest bit attractive, then you are basically required to take part in beauty contests. If you refuse to participate, you will be denied parole, based on your disdain for the “Miss Charm” event. In the opinion of the prison colony administration and the court that supports it, non-participation means that you lack a “positive attitude.” However, I claim that in boycotting the beauty contest I express my own principled and painstakingly formulated “positive attitude.” My own position, in distinction from the conservative, secret-police aesthetic of the camp administration, consists in reading my books and journals during moments that I extract by force from the deadening daily schedule of the prison colony.

On the same day that Ms. Tolokonnikova made her impassioned plea for justice to the court in Saransk, a third Pussy Riot member, Yekaterina Samutsevich â€" who was jailed with the other women but released on appeal last October â€" took part in a bizarre protest in the Netherlands organized by Amnesty International to press for the release of the Russian activists. Ms. Samutsevich fired the starter’s pistol, via videolink, for Amnesty’s “Naked Run for Freedom,” but the Russian judges were somehow unmoved by the spectacle of hundreds of Dutch protesters running around a muddy track during a music festival in the Netherlands wearing only motorcycle helmets.

Video of Pussy Riot’s Yekaterina Samutsevich that was played at the start of a naked run in the Netherlands last week.



Daily Report: Facebook Shares Briefly Surpass I.P.O. Price

On Wednesday morning, Facebook’s stock crossed an important psychological barrier, trading for the first time above $38 a share, the price at which the company, the world’s leading social network, first sold shares to the public in May 2012, Vindu Goel reports.

The catalyst for the rise was the company’s surprisingly strong second-quarter earnings report last Wednesday, which quelled many investors’ doubts about Facebook’s ability to make money from its legions of mobile users and suggested that its profit stream would keep growing.

Since last week’s report, shares have risen about 34 percent. Early Wednesday, they briefly touched $38.31 a share, although they pulled back to close at $36.80 a share.

The company’s shares hit a low of $17.55 last fall. Since then, investors have warmed to the company as its management demonstrated that it could increase profit and not just users.

“There was a perception that they hadn’t monetized the users they have,” said Aaron Kessler, an analyst at the Raymond James brokerage firm, referring to last summer.



Daily Report: Court Upholds Cellphone Tracking Without a Warrant

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