TECH STOCKS: LinkedIn Down, But China Push Draws Praise

By Benjamin Pimentel, MarketWatch

SAN FRANCISCO (MarketWatch) -- LinkedIn Corp. shares fell Friday as the company's disappointing outlook rattled Wall Street, even though analysts were cautiously upbeat on the social network's expansion plan, including an ambitious push in China.

LinkedIn (LNKD) fell 6.2% to close at $209.59, as the tech sector posted modest gains that saw the Nasdaq Composite Index (RIXF) edge higher by 1.7% to close at 4,126. The benchmark ended the week with a 0.5% gain.

LinkedIn reported a weaker-than-expected forecast that offset what was generally seen as solid fourth-quarter results. But the professional social network also said it planned to boost investments significantly as it eyes other areas of growth.

In fact, LinkedIn announced Thursday that it was buying Bright, a data analytics firm, for $120 million. The company already signaled even bigger plans, including an aggressive push into a major market, China.

During Thursday's earnings call, LinkedIn Chief Executive Jeff Weiner spoke of "key strategic multiyear initiatives," including "the expansion of our presence in China, where today we already have 4 million members, but where nearly one in five of the world's knowledge workers and students live."

Wedbush analyst Shyam Patil said LinkedIn's China push could be "very meaningful," given that "20% of knowledge workers are in China." But that effort "will probably take time to ramp," he told MarketWatch.

Still, RBC Capital's Mark Mahaney said it's impressive that LinkedIn has become geographically-diversified "in a relatively short time."

"Could this actually be the first major U.S. Internet company to succeed in China?" he told clients in a note. "We believe the company is fundamentally a very good growth asset, with a very healthily diversified."

Other analysts also note that LinkedIn has had a history of beating its own expectations. The company also has continued to post robust growth.

"For those who are overly concerned about the outlook, they exceeded the top line of revenue," BGC Partners analyst Colin Gillis told MarketWatch. "They have a long history of upside surprise....It's still a fantastic business."

Apple (AAPL) shares climbed 1.4% to close at $519.68 on news that the tech giant was buying back $14 billion of its shares. Shares of Expedia (EXPE) also rallied 14.3% to close at $74.45 after the online travel site beat Street estimates.

Activision Blizzard (ATVI) also saw its stock jump 14.4% to close at $19.64 after the videogame company's results exceeded expectations.

Other must-reads from MarketWatch:

Ugly-looking jobs report is beautiful on the inside

Google takes a stand with Olympic rainbow Doodle

Subscribe to WSJ: http://online.wsj.com?mod=djnwires