The Web 2.0 bubble is taking shape, although a bit more cautiously than the first time around. Now, actual value a company is able to produce is taken into account, and LinkedIn is one of those companies that (gasp!) make money from their web based social networking business.
As such, the question about LinkedIn’s future reappears every now and then, and in a recent Newsweek interview LinkedIn CEO Dan Nye did not rule out the possibility of an IPO; actually, he called it “likely”. “We are committed to building a company that changes the world, and we believe that we can do that best independently. We have a great advantage because we are profitable, and so we can fund our own growth.” - Dan said, adding that they’re looking at 300 percent growth in 2007.
Although pessimists might start drawing parallels to the dot-com bust in the late nineties, it’s important to note that LinkedIn is a company on solid ground with big growth and profits to show for it. It’s got paying customers, and it doesn’t rely solely on ads for its revenue, which separates it from 95% of other web companies out there. In a world where everyone is used to getting everything free, LinkedIn has a product so good that people will gladly pay for it. When companies that are losing money or have no sound business model except for selling ad space start announcing IPOs, then we should start to worry.
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