Turns out LinkedIn is the life of the party, after all.
Before the opening bell rang on the day of the LinkedIn initial public offering, enthusiasm for the stock was already running neck and neck with fears of a new tech bubble, given the company's aggressive asking price of $45 a share. LinkedIn shares opened at $83, or nearly double that. By late morning, trading had at times topped $100 a share, giving the company a valuation of more than $8 billion. Thursday's closing price of $94.25 put the value of LinkedIn at $8.9 billion. For comparison, Facebook has an estimated value of
Me, I've always liked LinkedIn precisely because it was all business. I built my profile and my network with the idea that I never knew when I would have to go looking for my next job. When I did get sacked at the beginning of 2008, it was one of the tools I used to get back on my feet--not that it led me to another full-time job, but it connected me with people and opportunities on a regular basis. I also use LinkedIn routinely to seek out experts to interview when I'm wearing my reporter's hat.
There is truth to the stereotype that LinkedIn is an endless sea of electronic resumes, upon which the jobless and the ambitious float their hopes. The most active users tend to be recruiters who have built their networks into the tens of thousands by advertising themselves as "open networkers," meaning they will connect with anyone regardless of personal or professional connection.
But there is more to it than that: professional development, sales research, and topical conversations through LinkedIn groups. I wonder how many of the people putting their money into LinkedIn today are doing so, at least in part, because it has been professionally valuable to them, personally. When I talk with companies building Web-based social tools for use within the enterprise, or in a business-to-business context, they often express more interest in connecting with the boring but businesslike LinkedIn than the more frivolous social media sites. I see a great deal of business value there, whether or not it's $8 billion worth.
When I asked a few active LinkedIn users and evangelists their opinion, none wanted to hazard a guess at whether the company is overpriced.
"Who am I to know?" says Rick Itzkowich, a California-based professional development coach and trainer who markets himself as "The LinkedIn Guy." While many Internet company valuations strike him as overblown, he said he probably would invest in LinkedIn if he had more money to burn. "I think it will probably do quite well," he says.
Itzkowich stumbled into his specialty while working as business development manager for a professional coaching firm that was scraping for business during the economic downturn. As he began using LinkedIn more intensively to develop leads, he also began promoting it to the BNI business networking group he participates in. Before he knew it, he was getting invitations to speak on the topic in places as exotic as Dubai. "Anybody who is in any kind business development or sales role is missing the boat if they're not using LinkedIn--it's a goldmine," he affirms.
Jack Young, a recruiter based in Plainview, N.Y., says he doesn't pay much attention to the stock market, but he knows the value of LinkedIn to his business. "I can't imagine, as a recruiter, being in the search business or the employment business and not using LinkedIn every day," he says. "I believe it is currently, and more so in the future or will become, something that is part and parcel of what we do as job seekers, recruiters, and business people looking to connect, for the foreseeable future."
Marc W. Halpert, a LinkedIn evangelist and trainer, says the service's reputation as a job site is "a well-earned misconception--it is a fantastic tool for finding a job if you're looking for a job." However, most of the people who come to his trainings are entrepreneurs or non-profit managers looking to improve their business networks, he says.
While Halpert admires LinkedIn as a business, he won't be sinking his savings into company stock. "I learned a long time ago that this is an area I really don't understand--and the people who are in the market all day long, they don't understand it either," he says. What he does know, he adds, is that companies who are awarded big values in the stock market "still have to prove it at the end of the day."
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