I recently saw a presentation from Dan Nye, who is the CEO of LinkedIn. Of course, all the metrics were spiking. Then again, LinkedIn is the place for professionals to connect.
So, this week the firm has snagged $53 million in venture capital. The investors include Bain Capital Ventures, Sequoia Capital, Greylock Partners, and Bessemer Ventures. As a sign of their optimism, the valuation of the investment came to around $1 billion.
While Facebook and MySpace get lots of buzz, I think LinkedIn is a more interesting play. Basically, the company is leveraging user-generated content to build an immensely valuable database. For example, if an advertiser wants to target someone located in California that is interested in Linux systems, you will definitely get some hits. This is critically important. After all, many other social networks have a tough time monetizing things.
Something else: LinkedIn is careful about adding features. In other words, the company sticks to its mantra of the "company you keep is one of the most credible reflections of who you are and what you have to offer." Thus, if something doesn't fit that, LinkedIn will probably avoid it.
Oh, and LinkedIn has been generating profits since 2006.
Now, will LinkedIn go public? I think so. And, I think the $53 million investment will help that out. But, in light of the difficulties with equities, it may take some time until LinkedIn has a public offering. However, when things improve, I'm sure the company will be one of the first to hit the public markets.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.