LinkedIn IPO On the Horizon?

by StockJockey

Monday, January 21, 2008 - 6:11 pm

LinkedIn does not get the press and buzz of Facebook, but seems to be thriving nonetheless, and CEO Reid Hoffman has another hit on his hands:

With more than 1 million people joining each month and projected 2008 revenue of $75 million to $100 million, LinkedIn Corp. seems likely to deliver another big payoff for Hoffman....LinkedIn’s focus on professional networking distinguishes it from social playgrounds like Facebook and News Corp.’s MySpace, where users are encouraged to share their personal lives by posting party photos and adding favorite bands.

Although it may not sound as much fun, LinkedIn appears to be thriving. About 18 million people now have profiles on the site, roughly twice as many as a year ago. AP/FOX

Hoffman’s baby is well behind Facebook in several key metrics, including members, but the sites are clearly differentiated, and both will likely thrive. And don’t cry for Hoffman, he is part of the Paypal Mafia that has investments in both companies and upstart Slide, Inc., although he passed on an opportunity to invest in YouTube in its early days.

To our 2007 Man of the Year Peter Thiel is LinkedIn to Hoffman; their relationship goes back many years, to Stanford University.

Thiel, an early LinkedIn investor who is now a venture capitalist and Facebook director, is one of the more than 1,500 connections that Hoffman lists on LinkedIn’s Web site.

“I pay a lot of attention to building relationships,” he said. “Part of how to create a lot of value and goodwill in the system is by doing something that is a little bit of work for me and massively valuable for you.”

Thiel marvels at how well the philosophy seems to work for Hoffman. “Everybody in Silicon Valley is no more than two degrees away from being connected to Reid.”

Thiel is clearly tight with Hoffman, maybe he should let Hoffman know the capital markets are shut down. Although he has other options available:

Hoffman, who remains LinkedIn’s chairman and largest shareholder five years after starting the company, said the Mountain View-based company will probably file for an initial public offering of stock before 2010 if he isn’t first tempted to sell to one of the suitors that have inquired about buying LinkedIn. Hoffman wouldn’t identify the suitors.

“I know we are going to be much more valuable in a year or two,” Hoffman said. “We have had (buyout) conversations with all the usual suspects, but I think an IPO is by far and away the most likely outcome.”

The question for us is, does LinkedIn go public before Facebook or vice versa? Waiting for Facebook to set a public comp for LinkedIn to follow might make sense. It should be interesting to see how this plays out, many questions remain to be answered here.

Of course, the way this market is looking, we might have to wait until 2010 for another IPO to succeed. With markets around the world open and plunging, Tuesday’s opening bell after the three day weekend is looking scary.

LinkedIn Co-founder Reid Hoffman Attributes Success to Good Relationships
AP/Fox