LinkedIn plans to raise up to $175 mn in initial share sale

SAN FRANCISCO: Linkedin’s plan to raise as much as $175 million 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 yesterday with the US Securities and Exchange Commission.

Other companies that foster online interaction may follow suit. LinkedIn is at the forefront of social-Web startups 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.

“LinkedIn is bringing the very hot concept of social networking to the practical business world,” said Dixon Doll, cofounder of venture-capital firm DCM, based in Menlo Park, California. “The whole social-networking phenomenon may be in the fourth or fifth inning and none of these have gotten public yet.”

Social deals site Groupon, which rebuffed a $6 billion 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 ended in September, net income attributable to common shareholders was $1.85 million, LinkedIn said. Revenue was $161.4 million, almost double the $80.8 million a year earlier. Total revenue in 2009 was $120.1 million, and the company had $89.6 million in cash and equivalents.

LinkedIn is dwarfed by Palo Alto, California-based Facebook, the most popular social network, which has more than 500 million users. It had revenue of $1.2 billion in the first three quarters of last year, up from $777 million, according to a person who has viewed documents pertaining to its results and asked to remain anonymous because the company is private.