LinkedIn to Float on the Stock Exchange

LinkedIn, the social media network for business professionals, is to become the first major western social network to go public after announcing that it was to float on the New York stock exchange with an offer that could value the company at more than $3bn. 

In just over nine years LinkedIn has become the equivalent of Facebook for business professionals, gaining over 100 million users in that time.  The social media network has also been increasingly profitable since its inception, turning over a profit of $15.4m on revenues of $243m in 2010. 

Due to the business focus of LinkedIn members, along with their professional influence, the network has become potentially more valuable to advertisers than other social media networks such as Facebook. Advertising revenue for the network has remained solid over the past year, contributing to 32% of overall revenue.  Unlike Facebook, which is totally free, LinkedIn operates under a model in which it offers premium services to paying customers whilst basic services and registration are free.

The floatation announcement is likely to start a social media gold rush as 7.8m shares, priced at between $32 and $35, are made available. More than half on offer are new shares, which the company states will be used to expand the business, possibly through acquisitions.

With this announcement it is becoming increasingly clear that investments in social media platforms are likely to increase, rather than slow down, over the coming years.  Other social networking sites, including Skype and Facebook, are also expected to draw in large amounts of money by going public in the next year. 

As LinkedIn continues to grow, therefore, it is imperative that businesses and professionals take advantage of its’ services and benefits.  Setting up an account with LinkedIn is easy, however maintaining the account and utilizing it for business purposes can be tricky.  For advice on using LinkedIn for your business, or for more general advice about using social media, please feel free to visit the Pipon Solutions website or contact us directly.