LinkedIn's plan to raise as much as $175m in an initial public offering may be the first in a wave of share sales for US social-networking companies.
The largest professional-networking site plans an IPO after turning a profit in the first nine months of last year and more than tripling revenue between 2007 and 2009, it said in a filing last week with the US Securities and Exchange Commission.
Other companies that foster online interaction may follow suit. LinkedIn is at the forefront of social-web start-ups that aim to replicate the successes of internet pioneers, such as Google and Amazon.com, and avoid the fate of sites like Pets.com, which shut less than a year after its IPO.
Social-deals site Groupon, which rebuffed a $6bn takeover approach from Google, is in talks with banks about a public offering this year, while Facebook may pursue an IPO in 2012, three people familiar with the matter said last year.
For the nine months that ended in September, net income attributable to common shareholders was $1.85m, LinkedIn said. Revenue was $161.4m, almost double the $80.8m a year earlier. Total revenue in 2009 was $120.1m, and the company had $89.6m in cash and equivalents as of 30 September.
LinkedIn could draw strong demand in the public markets because it has steadily boosted sales from advertising, subscriptions and hiring services, said Tom Taulli, an independent technology analyst.Some of the shares sold to the public will be from existing shareholders and some stock will be issued and sold by the company, according to a post on the company's blog.