Last updated: January 6, 2011 6:46 pm

LinkedIn planning IPO in first quarter

LinkedIn, the social networking site for business people, is planning to register for an initial public offering in the first quarter of this year, according to people familiar with the situation.

It has selected three advisers – Bank of America Merrill Lynch, Morgan Stanley and JPMorgan Chase – as underwriters for the deal, but no details are yet known of the possible size of the offering. The advisers declined to comment.

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“An IPO is one of many tactics that we could choose to pursue,” LinkedIn said, declining to comment on any deal. “We are focused on building our business and doing what is in the best long-term interest of LinkedIn members and shareholders.”

LinkedIn is one of several Silicon Valley companies expected to launch an IPO soon and has brought in new executives and at least one new director with experience at public companies.

News of LinkedIn’s plans follows heightened interest in Facebook, the world’s largest social network. Goldman Sachs is selling $1.5bn of shares in Facebook to its private clients. Goldman’s recent investment of $375m in Facebook valued the group at about $50bn, or about $100 for each of its 500m users.

LinkedIn has 85m users in 200 countries. Unlike Facebook, which is free, users of LinkedIn can pay for premium accounts that offer expanded services, such as more direct access to users. The site is popular with recruitment groups, many of which directly connect to Linked­In’s database.

US securities regulators are looking into whether some privately held groups now have enough investors, via secondary trading of their unlisted shares, that they may be required to make public financial disclosures.

Technology groups are expected to make up an increasing proportion of US IPOs, as the market for new share issues is expected to rebound from its post-crisis nadir in 2009 and investors seek out growth companies.

Technology IPOs made up about 10 per cent of US deals last year, according to figures from Barclays Capital, against 5 per cent in 2009. That figure could reach 15-20 per cent in 2011.

Notable groups that filed to go public last year, but pushed back the issues until at least this year, including Demand Media, which owns eHow.com and produces other web content, and Skype, which offers web-based phone calls.

Additional reporting by Joseph Menn in San Francisco

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