19 May 2011

LinkedIn shares boom as social media goes public

The much anticipated flotation of LinkedIn, the professional social network website with 100 million users, exceeds initial expectations as shares jump 97 per cent.

Shares in the networking website nearly doubled on their market debut, rising from $45 a share to $87.70 in early trading on the New York Stock Exchange and growing throughout the day.

This will net the company behind the website over $8bn, marking it as a great success for the first of the social media websites to go public.

LinkedIn is the first prominent social networking company to test just how much appetite there is for investment in the “Web 2.0” world of social media.

Other prominent social media websites – especially Facebook, Twitter and Viadeo – will be watching today’s developments closely.

Facebook, which is expected to go public next April, was valued at $50bn at the start of the year.

Peter Crosby, chief sales officer at Viadeo, a professional networking site, said LinkedIn’s success today will be encouraging news for these other big sites.

“LinkedIn’s IPO should be good for all social media as it will act as a yardstick by which future deals can be measured.”

LinkedIn has often been called the professional version of Facebook – allowing members to share details of their working histories, recommend colleagues and share CVs.

It is a particularly useful tool for marketers and recruitment agencies, allowing them to hone in on prospective clients.