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PREVIOUSLY: The initial public offering for LinkedIn, a career-oriented social networking site, marks the biggest Internet company IPO since Google went public in 2004.
Shares of the eight year-old company, which made just $15.4 million in 2010, were priced at $45 apiece, bringing the company's total estimated market value to around $4.25 billion, around $1 billion higher than initial estimates.
Previously derided as a "Facebook for losers," LinkedIn's sky-high valuation suggests founder Reid Hoffman--now reportedly worth over $800 million--may be having the last laugh. At the same time however, it raises questions about the sustainability of these web businesses, and whether the bubble could burst.
So are investors paying far too much for LinkedIn--essentially a modern Rolodex--and will the company come to look less like Google, which continues to rake in cash, and more like the failed web firms of the 1990s?
The company, which has over 100 million registered users, boasts three sources of revenue: online ads, premium subscriptions, and charging business for recruiting tools, or what the company calls "hiring solutions."
LinkedIn is one of the first social networking sites to go public, and a slew of other social media companies, including Groupon and Facebook, are rumored to be preparing their own IPOs. This comes amid renewed concerns of a tech bubble that many fear may be inflating values of Internet companies, some of which have attracted millions of users, but have yet to demonstrate a sustainable business model.
Source: The Huffington Post Bianca Bosker
Tags: IPO
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