Reid Hoffman: LinkedIn will go public (at some point)

Posted Nov 25th 2009 2:30PM by Tom Johansmeyer
Filed under: Internet, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Research in Motion (RIMM), Goldman Sachs Group (GS), McGraw-Hill Companies (MHP), Media World, Technology

Look for a LinkedIn IPO, but not in the near future. Company co-founder and executive chairman Reid Hoffman has revealed his (and his investors') exit strategy, even if it could take a while to get there. Any social media company IPO would take a while to get off the ground in this market, since companies are being incredibly cautious. So, "not anytime soon" could coincide with a change in market conditions ... but Hoffman stopped well short of that.

At an event in London to celebrate LinkedIn's hitting the 3 million user mark in Britain, Hoffman said about the company's IPO prospects, "Probably at some point a balance will occur when that's the right thing. That will not occur in the near term." Worldwide, LinkedIn has 53 million members.

Despite the fact that Facebook owns the hype -- and may be taking steps of its own to go public -- LinkedIn is the social media community's favorite, with a recent Reuters poll finding it the Silicon Valley company "most eligible to go public."

LinkedIn stands out in the social networking because it's focused on professional life ... and because it's been profitable for the past two years. Facebook just turned cash flow positive in the second quarter of 2009 (not the same thing as profitability), and Twitter stumbled into revenue this year with its Google (GOOG) and Microsoft (MSFT) licensing deals. But, this new revenue source is already under subtle attack from Yahoo! (YHOO).

Backed by Goldman Sachs (GS), McGraw Hill (MHP), SAP Ventures and Bessemer Venture Partners, LinkedIn raised $76 million in its most recent round of financing (2008), which led to a company valuation of $1 billion, which it didn't bother to touch. According to Hoffman, "We haven't spent a dime of our last financing."

The social network has used the past two years to nearly double its user base, demonstrate continued profitability and launch projects and partnerships with large and hot companies such as Microsoft, Research in Motion (RIMM) and Twitter. The latest announcement is an interface that will let developers pull LinkedIn profiles onto other websites, creating another route through which traffic can flow.

LinkedIn may be playing it safe, but it looks like we can expect it to go public -- and be the hottest IPO in the Valley. We'll just have to be patient. Fortunately, much of the holdup is likely to be consumed by an economy trying to right itself, which makes the wait a little easier. When the market is ready -- and LinkedIn is ready -- we'll get the social media IPO fix we've all been waiting for.

Tags: Bessemer Venture Partners, facebook, featured, Goldman Sachs Group, GS, initial public offering, ipo, linkedin, LinkedIn.com, McGraw-Hill, Microsoft, MSFT, reid hoffman, Research In Motion, reuters, RIMM, Silicon Valley, social media, social networking, social networks, twitter

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Reader Comments (Page 1 of 1)

11-29-2009 @ 12:04PM

JD said...

I do not know many professionals that do not have a linked in acocunt. But I work in the financial service industry and what I notice is many of the poeple I know are only connecting to others and do not really gain any education and can not give much back.

Visit www.streetrede.com for a fresh look to the old concept of getting educated on the area you want to work in as well as getting connected to people whom you can really interact with. StreetRede is geared towards college student and professionals that want to and do work in financial services.