LinkedIn raises IPO — and eyebrows


(Paul Sakuma/AP)

LinkedIn started in 2003 as a social network for professionals. You add a digital résumé, recommendations and lots and lots of business contacts. Early this year, news outlets reported its user base had grown to about 90 million users.

The company feels so confident in the IPO, it just raised its asking price to $42 to $45 per share. Reuters Deals Wrap blog says investors seem to be willing to overlook a number of risks:

Potential risks include LinkedIn’s gutsy bet on future growth, an admission that it does not expect to be profitable in 2011 and the prospect of having its site blocked, which would limit its user base and could curtail some of the potential growth so attractive to investors.

I leave most business questions to my far more qualified colleagues in our business section, but I have to admit the deal is puzzling. Google would be a huge IPO, even back in 2004, because, well, we all use Google all of the time. But LinkedIn? It’s always struck me as being useful only when you don’t have a job.

I’m not alone in my confusion. Some have raised the specter of a rising “social media bubble,” suggesting the high values placed on companies like LinkedIn are too high.

Others, just don’t get the interest. “Really? They have new users?” a colleague wrote in a note to me. “Who still uses it? Why does it keep sending me e-mails?”

Ian Sigalow, a partner at the venture capital firm Greycroft Partners, said he finds the company “exceptional” and feels confident in the IPO, citing its growth over the past two years as one reason. We were in a recession for the past two years — of course people would turn to a professional job search Web site when jobs were hard to come by.

The rest of the time when you’re not looking for work, there isn’t much to drive you to visit LinkedIn. Of course, LinkedIn has a different way of getting money into stock owners’ coffers aside from just hoping people like me drop in to visit and check out advertising. It also sells premium subscriptions to people seeking jobs and it sells hiring services, helping companies find the right employees.

Perhaps that’s worth more than all of our combined efforts. I could be wrong about the whole thing and undervaluing the site’s worth. How do you use LinkedIn? Has it worked for you?

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