The old versus the new
LinkedIn are planning their IPO, with a possible total value of perhaps $2.5 billion (maybe more, if there is a strong interest). They have revenues estimated at $214 million for 2010, more than double those of 2009. Making it's 2003 founder Reid Hoffman and his wife Michelle Yee, who still own more than 20%, very wealthy indeed. Much of their revenue comes from job listing related advertising, though 27% comes from premium subscriptions. Though some would compare this with Facebook, it is as visitors to the site will be aware, a useful way for professionals to stay in touch. It's success during our recession is to be applauded.
Another comparison could be made with 'Tate & Lyle' whose revenues from continuing business' have been more or less steady at £2.5 billion, and it's value at £2.7 billion. These figures have been much the same for the last 10 years, which might be expected for a company whose sugar related origins began in the 1860s. The last 20 years have seen the difficulties of agricultural commodity prices fluctuating wildly, which have affected profits. Also there have been legal disputes with the Chinese over it's market leading 'Splenda' patents.
I think that LinkedIn are a superb company. I have no doubt they will have a successful IPO, though as technology companies like Nokia have shown, the future can change very quickly, to last 150 years in business is the real achievement.
Remember as 2008 has shown, shares and other financial assets can go up and down at frightening speed. Don't buy any, unless you know what you are doing and can afford to lose the money.