I've never owned any stock in a company. Not sure why. Maybe it's because the concept seemed related to companies I didn't feel I had a "connection" with. Well, I'm connected with the Internet and social media. More and more Internet technology and social media companies seem to be gearing up to go public. These are tools I work with, sites I use every day, and companies I support. How can I not get on the boat when companies like Pandora, LinkedIn, Skype, Groupon, and even Facebook seem to be gearing up to let the public get a piece of the action?
Pandora recently filed for an IPO. I've been a Pandora subscriber for years. Pandora is an online streaming radio service that is tailored to the music you like. You can enter an artist name, or song name, and the Pandora site will set up a radio station based on similar artists and songs. You can listen anywhere you have access to the site. Pandora boast nearly 80 million registered users like myself, with the average user listening to more than 10 hours of streaming music a month. Pandora is working to expand its reach into car radio, and Internet ready TV. Surely a company that is growing and worth a look.
LinkedIn is basically a professional social media site. A Facebook for professionals, where they can connect and interact with each other and companies. I am a big fan of LinkedIn and think networkers, companies, and job searchers underutilize it. LinkedIn is on its way to an IPO, and it looks to be a big one. LinkedIn has over 90 million registered users, 65 million unique visitors in Q3 2010, and had $161.4 million in revenue in Q3 of 2010. Another Internet tech company continuing to grow, especially as members and companies alike realize its potential to connect and engage in mutually beneficial relationships.
Skype, the premier Internet based calling services, filed for an IPO in 2010, but it's been on hold for some time. For 2010, Skype has 663 million users worldwide, and reported 2010 revenue of $860 million. Last September, eBay sold 65% of Skype to private investors which valued the company at more than $2 billion. Skype is still the powerhouse in Internet calling, but there are competitors nipping at its heels, most notably Google Voice. Skype certainly has the established track record, advantage, and current market share coming out of the gate.
Online discount powerhouse Groupon is also gearing up for an IPO this year. Groupon offers localized discounts of up to 90% from local businesses like restaurants and salons. Groupon leads the market, but LivingSocial http://livingsocial.com is a close competitor. Groupon has been valued at as much as $25 billion, and has been growing steadily, moving into hundreds of new cities and doubling its subscriber base this year alone.
There is little doubt that the Internet tech IPO everyone is waiting for is Facebook. The rumor it that Facebook is looking to make its IPO in May 2012. When this news hit the streets, Facebook was valued at an estimated $50 billion. Facebook started the ball rolling early, raising $500 million from Goldman Sachs, and Digital Sky Technologies. Experts believe Goldman Sachs is helping Facebook circumvent the system so it doesn't have to report earnings or raise money via an IPO. The thinking is that when Facebook is required to officially release its financial information to the public, it will also decide to become a public company at the same time. Perhaps this will ratchet up investor interest and increase the stock value?
Whether you're an investor or not, this is certainly an interesting time for tech stocks. Many questions remain, like what is the REAL value of some of these companies? Most of these Internet tech companies get their profit from online ad revenue, and many think their value is inflated. Some don't even technically generate any money at all at this point! We'll see as each makes their IPO on the near future!
Are you in? If so, for which of the companies?
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