PR Company, Internet Marketing

Linkedin’s floatation on the stock market – will it sink or swim?

Last week, professional social networking website Linkedin was floated on the US stockmarket with the initial public offering (IPO) standing at $45. Investors jumped at the chance to own shares in the darling of the social networking world which was demonstrated by the share price flinging up to $122 at once point in the first day but settling at around just over $94.

For a long time now, social networking sites have done incredibly well on the stock exchanges, but such amazing leaps in share prices has led to many analysts warning of a second dot com bubble just waiting to burst. If it’s happened once, could it happen again? Bearing in mind that it wasn’t so long ago that Linkedin was valued at $2.5bn, it’s latest valuation of more than $10bn is bound to make the cautious nervous about the company’s future when in 2010 the company made a net revenue of $243million, up 102% on the previous year.

Why is there such a fuss about Linkedin and what does the company’s floatation mean for internet marketers?

There is a real goldrush for social media at the moment as it is still a relatively new phenomenon and online marketing and PR people are adapting their online strategies to incorporate emerging technologies. At this stage of the game, it is incredibly important for the big players in social media to lead the way with the most up to date technologies and imaginative marketing strategies. The winners could see amazing returns for years to come if they play their hand well early on.

Do you know the saying “if you’re not paying for it, you’re not the customer, you are the product”? Since Facebook made the move to become more heavily monetised,  users have been heavily marketed at by businesses and under other circumstances users may not have tolerated this. However, Facebook has provided users with an online experience that has been unmatched by competitors. Floatation means that Linkedin will feel the pressure to live up to it’s high valuations and will be looking at ways to increase revenue. This means that user experience could change in the future, whether it is with a greater push for users to subscribe by offering greater feature to paid subscribers or a more aggressive advertising strategy.

Internet marketing professionals will also be keen to make the most of Linkedin without forsaking other emerging networks, many junior and senior internet marketing professionals have made the mistake of putting all their eggs in one basket by marketing their clients on the website tipped to be the next big thing only to find themselves disappointed.

What do you think about Linkedin’s floatation? Do you think it is a big deal or a disaster waiting to happen? Let us know what you think!

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