BizJournals Portfolio

LinkedIn Locks In

$1 billion valuation bolsters the case for social sites.

So if Facebook is worth $15 billion, then LinkedIn must be worth…? The answer turns out to be $1 billion, based on a new $53 million capital infusion from Bain Capital and other investors.

The valuation will certainly escalate the debate about the potential worth of social-networking sites and whether there is really a significant business there.

Of course, LinkedIn is different, as it is focused on professional networking rather than all things social.

As Kara Swisher at All Things Digital decribed it, it is "the serious cousin to the party-hearty twins of MySpace and Facebook."

Founded four year ago, LinkedIn now has more than 23 million users in 150 countries—and its number of unique visitors is growing.

Its chief executive, Dan Nye, told Jessica Guynn of the Los Angeles Times that the new capital would be used to introduce corporate services and explore potential acquisitions.

"We have a strong balance sheet and a strong business model," Nye told the paper. "Now we have the luxury of being able to focus on building a great company."

Brad Stone of the New York Times says only a quarter of LinkedIn's $100 million in revenue this year will come from ads.

The way the investment was officially announced was very 2.0: a video on YouTube. Connie Loizos of Private Equity Hub was not a fan:

"Watching the video reminded me of a late-night infomercial. (Not the pornographic kind. The kind where you end up with some crap abdominal cruncher because seemingly respectable people testified that it had given them six-pack stomachs. And in your fatigued state, you believed them.)"

See for yourself here.


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