LinkedIn IPO Filing Opens Floodgates for Facebook, Groupon

 
 
By Clint Boulton  |  Posted 2011-01-28
 
 
 

LinkedIn Jan. 27 confirmed it has filed for an initial public offering with the Securities and Exchange Commission, with designs on raising at least $175 million in stock.

LinkedIn, the latest Internet company to commit to the publicly traded stock market, is the world's largest business contact Website for professionals. The Website help 90 million users network with past and present colleagues and has also become a valuable hiring tool for human resource managers.

According to the documents filed with the SEC, LinkedIn's revenue topped $161 million through Sept. 30., with net income of $1.85 million.

LinkedIn makes money from advertising, premium subscriptions and software service professional recruiters use to hire new employees.

LinkedIn's hiring solutions, which CEO Jeff Weiner said in November have really taken off for the company, appear to be its meal ticket, comprising 41 percent of revenue in the first nine months of 2010.

The number of shares to be offered and the price range for the offering have not been determined. However, a portion of the shares will be issued and sold by LinkedIn, and a portion will be sold by certain stockholders of LinkedIn.

LinkedIn investors include Greylock Partners, Bessemer Venture Partners, Goldman Sachs and Sequoia Capital.

Morgan Stanley, BofA Merrill Lynch and J.P. Morgan Securities are managing the books for the IPO. Allen & Company and UBS Securities will be acting as co-managers. 

LinkedIn's IPO filing, coming one day after content aggregator Demand Media enjoyed its first full day of public trading on the New York Stock Exchange, could set in motion other IPOs.

Local deal Website Groupon, which spurned a $6 billion merger offer from Google, is said to be mulling an IPO after taking $950 million in funding from Accel Partners, Battery Ventures and Digital Sky Technologies.

Facebook, which garnered a $50 billion valuation after taking $1.5 billion funding from Goldman Sachs and Digital Sky.

Many analysts expect Facebook to file an IPO by April 30, 2012, when it will have to disclose its finances under SEC rule.  

Other Internet companies that could be tempted to follow in LinkedIn's footsteps include the successful microblog service Twitter, which is expected to make $150 million from advertising this year, and online game power Zynga, which makes a living from offering social games on Facebook.

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