LinkedIn’s IPO goes live today, due to hit the top end of its price range and one of the biggest internet company valuations at $4 billion since Google first went public seven years ago. If market forecasts are correct, the stock is set to soar higher in their first day of trading but even so, this could be only a moderate valuation compared to some other social network players that are looking to go public over the next year or so, Facebook being top of that list.
The short history of the internet is one littered with over-valuations and failure to execute well, never more so than around 2000 with the dot.com bubble that saw many companies fall by the wayside. Interestingly the strong players won through then and there is no small reason to think that, while new companies may pop up in this cycle’s wake, if their ideas are good and, more importantly, their execution strong, LinkedIn’s launch may be the day that ‘social media’ can start to make real significant money.
LinkedIn has been around long enough to be established in its business model, to have grown relatively slowly with around 100M users now, and to have made some – though not maximum – use of its position as a business and not a consumer site. It captures an enormous amount of quality data from its users, its business aspect is a massive success, and its model of contagious distribution means that one new user brings in many more similar users to grow the site.
LinkedIn needs the IPO cash to defend against the future though, and to develop further business-focused value and maintain its value as a networking and recruitment tool. I just can’t help wondering if a more ‘social’ way of raising that cash could have been an initial offering to existing members- though of course the numbers being talked about today could not be achieved that way without each existing member donating around $4K each.
Looking at my LinkedIn profile today (Sarah Wood, Senior E-Business Consultant), I see that I joined the site in November 2004; I have worked for a lot of large international companies, and back then was sent an invite from a US colleague. Having built up and updated my profile over the years as I moved through different roles and companies, I am delighted to be able to keep track of and keep in touch with many colleagues that it would prove challenging to keep in contact with without such a versatile tool.
One of the joys for me of working in a large company, as well as one of the biggest challenges, was to be a good manager to the people I hired or inherited, and to allow them to grow and develop within their roles as much as I was able given the particular situation. I have managed teams in good time and in bad, and a few times have had to motivate and encourage through an extremely difficult landscape; I have been privileged in the collaboration with individuals I have worked with and it gives me real pleasure to see colleagues shine and succeed in their current working lives, all of which is more visible to me through LinkedIn than it would be out in the ‘real world’.
Yes I can make sure I have a keyword-rich profile summary that sells me harder than an online cv, I can take part in groups to widen my visibility and knowledge of latest trends for my subject area, and yes I can use the search functionality to uncover new connections and opportunities.
But more than this I can look back at where I have been and the people I have worked through the night with to meet an improbable deadline; I can see whatever happened to people after moved on from my immediate sphere; and I can be grateful for the people that I have met and enjoyed spending times with and be glad they are enjoying themselves still somewhere else in the working world.
I trust LinkedIn’s IPO is going well for them today, and I thank them for the richness of connections that they enable among their 100M+ connections each and every day – a valuable commodity that is enviably difficult to price.