Belfast Telegraph

Idea of a new boom gets floated again

2011 may become the year of a second boom as a flurry of hype grows around social networking websites.

Business networking site LinkedIn, one of the first social media websites to claim profitability, is reported to be considering a flotation with an announcement due in a few months.

But there was no confirmation from LinkedIn, with a spokesman simply saying that an initial public offering (IPO) is "one of many tactics that we could choose to pursue".

LinkedIn is a much less 'busy' site than Facebook and lacks the same frivolous trappings of games and endless photographs (thankfully). But it does have members in hundreds of countries, and boasts nearly 50m visitors every month and around 85m fully fledged members.

The website is also a lucrative proposition because of its white collar users, a selling point which enables it to charge high rates for ad space.

It seems that LinkedIn is more amenable to flotation than Facebook, whose notoriously publicity-shy founder Mark Zuckerberg is just 26-years-old. Perhaps that's due to its rather more long in the tooth founder, Reid Hoffman.

Hoffman was also an early backer of Facebook and one of Silicon Valley's best-known investors.

LinkedIn was valued at $2bn last year, though the feeding frenzy which is surrounding social networking sites may push that up, especially after Facebook was estimated to be worth $50bn when investment bank Goldman Sachs agreed to pour $375m into it.

Plenty of its members are likely to be experienced enough to advise, should LinkedIn decide to float.

But US financial regulator the Securities and Exchange Commission is keeping a close eye on developments as under US law a private firm must have under 500 shareholders to stay private.

If it goes over that magic number, it must start delivering detailed financial statements.

Meanwhile, Groupon, a coupon company which is fast becoming ubiquitous by widespread, localised web-advertising, is raising $1bn in new funds but recently rejected the takeover overtures of Google.

Zuckerberg and his former benefactor will be closely monitoring each other's moves towards flotation - perhaps using a social networking website to do so.

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