LinkedIn, the 1st US Social Networking Company is in news as it sold USD 352.8 million worth of shares to the public yesterday. This social networking site is becoming important day by day because of its intense demand. It is mainly used for professional networking with significant different business models.
Saad Khan, a partner at venture capital firm CMEA Capital said that social networking is the most efficient customer acquisition strategy throughout the world. “(It) is going to be a customer acquisition strategy in every industry, explaining that social networks can help companies reach new customers more efficiently.
This professional site allows people to create professional profiles and is widely used as a job-hunting tool that raised the expected price range of its IPO by 30% on Tuesday, to USD 42 to USD 45 per share. At the USD 45 IPO price, the company has a market value of USD 4.25 billion. The recent update regarding this is that its shares are expected to begin trading on the New York Stock Exchange on Thursday under the symbol “LNKD.”
Facebook is one of the social networking sites that have experienced even bigger increase in its valuation by gearing more towards its recreational use.
The LinkedIn Company is widely expected to go publically in 2012. Ben Howe, Chief Executive Officer of boutique investment bank America’s Growth Capital said that there is a feeding frenzy is going on. He further said that there are companies that are going to have very strong positions in massive markets such as Facebook … but he thinks most of the other companies that are riding on their coattails and getting these enormous valuations do not fit the same profile and are just extremely overvalued.