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Massive LinkedIn IPO Raises Dotcom Bubble Concerns
The Installer writes with news of yesterday's stock offering from LinkedIn, which shocked investors by closing at more than double the initial price. "Buyers crowded the floor of the New York Stock Exchange, and financial news networks flashed LinkedIn's stock price urgently all day. By the closing bell, the company had a market value of $9 billion, the highest for any Internet company since Google had its initial public offering seven years ago. Millionaires and even one billionaire were made, at least on paper. The stock, issued at $45, went as high as $122.70 just before noon and closed at $94.25 on a trading volume of 30 million shares." That price values the company at over 30 times its 2010 revenue, leading to speculation that this is either evidence of the second dotcom bubble (a possibility we discussed in February) or a "watershed moment for social media." Many experts are questioning the value of LinkedIn, while others are claiming intentional market manipulation.
Three years ago, I used to recieve endless "Come Join Us on LinkedIn" e-mails to several e-mail accounts. Because at some point an old boss had somehow gave LinkedIn access to his Hotmail or Outlook book or something and created a place holder for me with my first and last name (and also my e-mail address) because my boss had that and only that information in his address book for me. Creeped me right the %*#@ out.
It wasn't hard to get the e-mails to stop but I'd wager that shell of a profile is out there floating around linking my old coworkers in a web -- for any of them that added that profile or had one of the e-mail addresses in their book. At the time, no one seemed to find this alarming but me so whatever. And now Facebook and a lot of sites will harvest your address book for you from Hotmail or whatever and then it will aggressively market that person to come to said social networking site on your behalf. Each site wants to boast fifty billion users (or some factor higher than living human beings), right?
But LinkedIn is really outpacing those sites: an outlook plugin/hijacker, drupal integration, actually a plugin for virtually anything and of course APIs to put it in your site.
So I was wondering what had gone wrong when I heard about its IPO the other day. After all, it's one of the creepiest spammiest social networking sites I've encountered. But that's just it, its methods are effective and so it is rewarded. If privacy abuser Facebook is "worth" the yearly GDP of a small nation, surely a website implementing the same APIs and plugins while experimenting with creepin' it up a notch is going to drive investors crazy. I think it's more a sign of overvaluation of a privacy abuse bubble--one I've been hoping to see pop for quite sometime now.
My work here is dung.
LinkedIn may have a "valuable user base" but does it have an active one? How much time do people spend on LinkedIn? I have a LinkedIn account and I log in maybe once every few months to accept invitations. It's a resume with references attached. It's invaluable when you're searching for jobs, but it's not a true social site.
My point is that yes, you could use the information you have for me to direct highly effective advertisements at me - but only when I'm logged in.
Facebook, people are logged in every waking second it seems like. It's their email, their IM, their message board - it's their life, not just their resume.
In Soviet Russia, the television watches YOU!