While Social Media Blinks, LinkedIn's First To Eye Public Offering
While social media has been jockeying for position, dancing the IPO dance, the world has been waiting with baited expectation as to which social network would take the lead. Speculation reached a fevered pitch in early January when rumors indicated that LinkedIn would be the first to go, before Facebook, Twitter or Groupon sucked all the oxygen out of room.
Then after a four week hiatus with little to no news, LinkedIn announced in its blog today that it had filed a registration statement with the Securities and Exchange Commission for a proposed initial public offering of its Class A common stock. While the number of shares and the price range for the offering was not disclosed, a portion of the offering will be issued and sold by LinkedIn and a portion will be sold by high-level LinkedIn stockholders.
As anticipated in my January 6th blog, titled "Social Media IPS" Facebook Not To Steal LinkedIn's Thunder," one of the top book runners involved in the IPO will be Morgan Stanley & Co. Also assisting in the proposed offering will be BofA Merrill Lynch, J.P. Morgan, Allen & Company and USB Securities.
TechCrunch lists LinkedIn's nine months net revenues ending in September 30, 2010 at $161 million, doubling over the same period in 2009. Net income for the first nine months of 2010 came in at $10 million. While these earning levels pale in comparison to Faceboook, it becomes clear why LinkedIn wanted its S-1 filing to be the social media IPO leader. Particularly since LinkedIn currently sports only 90 million users to Facebook's 600 million.
Oddly enough, LinkedIn is indicating their future earnings for this year will actually decline. In the same TechCrunch report, a spokesperson for the network asserted, "we expect to our revenue growth rate to decline, and as we continue to invest for future growth, we do not expect to be profitable on a GAAP basis in 2011."
An IPO will position LinkedIn in a way that might also prevent any of the other social networks from interloping on LinkedIn's business-focused turf. This is an arena that up till now Linkedin reigned supreme and was the major differentiator that distinguished them from other networks in the social media space.
In their filing documents LinkedIn points to a number of social networks they felt could have encroached upon their area of expertise.
Fast on LinkedIn heals, however, is Groupon. Earlier this week, the social shopping site's Chief Executive Andrew Mason indicated that his social shopping site was considering an IPO and was in talks with bankers.
But LinkedIn was the first bride to the alter, and in so doing will start attracting not only the high-rollers, but also the low-hanging fruit from daily users (like myself) who have relied on the network to manage our business contacts, update resumes, find jobs and create an efficient online forum for engaging with fellow colleagues and thought leaders. Public offering? Where do I sign up?