Business social network LinkedIn is planning on an initial public offering of stock in 2011, hoping to beat Facebook to the punch and maximize the attention its offering can draw, according to a report tonight by Reuters reporter Nadia Damouni. Damouni cites multiple unnamed sources stating that LinkedIn has already chosen financial underwriters, a precursor to making an offering, though filing financial paperwork could still take months.
LinkedIn may not have all the mass consumer glamour of Facebook or Twitter, but many of its 85 million members pay for premium accounts with extra business networking features and the company pitches advertisers with user demographics skewing heavily toward the upper-middle class and above. Those two revenue streams have helped the company grow substantially since it launched in 2003, 1 year ahead of Facebook and 3 years ahead of Twitter.
ReadWriteWeb’s Bernard Lunn explained what makes LinkedIn so valuable three years ago. If business contacts and personal work histories are of value or of interest to you, LinkedIn’s market penetration makes it invaluable.
I have criticized LinkedIn at every opportunity, however, for making moves that don’t make sense and failing to deliver user data in some of the ways that would be most valuable. The company also insists on adding all kinds of messaging between users, importing Tweets and other such nonsense. It would be great if LinkedIn would stick to business and keep the Tweets on Twitter. I know I visit the site multiple times a day, but the unenthusiastic imported messaging just gets in the way.
Several years ago, ReadWriteWeb was scraping pages off of LinkedIn to capture updates about job changes by people in the tech industry. We would then write about those changes, linking to LinkedIn in every one of those posts. The company suspended my account when it found out so I talked to their business development department about the value we sought to add. They asked me how many page views we got each month, said they’d talk about it and never got back to me. I thought that was rather snobby and unhelpful, but it is a company that’s always bragging about how many of its users make six figures, so what do you expect? The company turned my account back on the next time they wanted me to review a new feature, thankfully.
Like I said, I visit the site several times a day – and if I could get a feed of just the new jobs taken by my contacts, free of all the clutter of new connections made or recommendations posted, I’d visit LinkedIn all day long.
Can the company launch a big IPO? It probably can; as a growing number of business people come online, LinkedIn could become all the more useful. Would an IPO before Facebook’s be beneficial for LinkedIn? That seems like a crap-shoot – the company could ride a wave of investment enthusiasm that arose from a Facebook IPO. It might be safest to go it alone and first, though.
