Silicon valley

Let IPOs Bloom Again: LinkedIn Files With SEC

LinkedIn, the social network for professionals, announced plans to go public by filing a registration statement with the Securities and Exchange Commission Thursday.

LinkedIn’s move, while expected, makes it official: We’ve got an internet IPO boom on our hands, after a long drought following the bursting of the first internet bubble a decade ago and the post-Enron passage of strict rules for public companies that made the prospect of going public less palatable.

Yesterday, the internet content mass-production firm Demand Media went public. Despite having no profits, its share price increased by 33 percent in one day.

Demand Media and LinkedIn are the first of what is expected to be a flurry of public offerings by internet companies over the next two years as the economy improves. Shopping website Groupon and social-gaming company Zynga are both mulling an IPO, though both companies have said they’ll likely wait until 2012. Then there’s the long-awaited IPO from Facebook, which is also expected to go public in 2012.

LinkedIn says it has 85 million members, and analysts estimate the company had $200 million in revenues in 2010. On private online market SharesPost, LinkedIn has an implied valuation of over $2 billion.

The astronomical valuations being assigned to these startups have given some observers flashbacks to the dot-com bubble of 1999-2000 and the subsequent market crash that wiped out scores of companies and billions of dollars in shareholder equity, and plunged the United States into a recession.

Ten years later, in 2011, most of the premier internet startups are generating significant revenues, and more importantly, profits, Demand Media notwithstanding.

Linkedin has carved out a solid niche for itself as the social network for professionals. In addition to selling ads, the website makes money by selling premium accounts and recruiting services to businesses.

LinkedIn has raised over $100 million in funding from Sequoia Capital, Greylock Partners and Bessemer Venture Capital Ventures.

The IPO size and price range have not been determined yet, MarketWatch reported. The financial news website said that Morgan Stanley, Bank of America, Merrill Lynch, and J.P. Morgan will be the lead bookrunners, while UBS and boutique tech/media house Allen and Co. will assist.

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