LinkedIn’s Wild IPO: Is it Really Worth 5 Times More Than Monster?

Wall Street investors who were bidding up LinkedIn faster than the last seconds of a hot eBay auction pushed the company’s value to $9 billion.

Not bad for a job board business network that saw its first profit last year.

The stock, which was priced in its first filings with the Security and Exchange Commission at $32-$35, soared to $122.70, before settling back in late afternoon trading to around $96.50 a share.

Trading as LNKD, the stock was the darling of Wall Street. More than 27 million shares changed hands by the time the market closed, several times the 7.84 million share that were part of the initial public offering. More than 200 stories have appeared in the financial trades and online since the stock opened this morning.

An IPO that’s simply “bananas”

The Wall Street Journal wrote an entertaining post pointing out that at LinkedIn’s price, Apple would be worth $3 trillion. It shows, says the Journal, “how bananas the LinkedIn IPO is.”

In a more appropriate comparison, at its current price LinkedIn is worth more than five times what Monster is. The difference, of course, is that Monster Worldwide has been around for 16 years or so (depending on whether you consider just the job board or its predecessor, TMP). The other difference is that Monster’s quarterly sales are equal to LinkedIn’s annual sales.

The big difference is that LinkedIn is new school. It was designed as a business networking site and since has seen recruitment become the biggest part of its revenue stream. Now, recruiters pay annual fees to access tools to search for candidates and to contact them directly. Job postings, a relatively new product, is growing.

It’s the social aspect of the site that makes it different from job boards, despite its reliance on recruitment for revenue and profits. Users come to the site to make business connections, participate with peers in professional conversations, and stay atop developments. Job search, if they come for that at all, is down the list.

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Start of a new tech bubble?

That’s why recruiters are so taken with LinkedIn; the users are almost all passives.

Job boards, try as hard as they may to layer on social and career elements, are still for job hunting. By definition, then, nearly everyone on the site is an active job seeker.

Still, while the IPO has made new Silicon Valley billionaires and millionaires, the Journal offers three issues to consider. First on the list is “Yes, this is crazy.” At the bottom of the article is a little poll: “Does LinkedIn’s successful IPO signal a new tech bubble? So far, the Yes votes have 70 percent of the total.

image source: LinkedIn / NYSE Euronext / Valerie Caviness

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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