(RTTNews) – LinkedIn’s plan to go public this year ushers in a new era of internet and social media companies floating on the stock market. When listed, it would become the first social networking company on the Wall Street, with much bigger peer Facebook and social deals site Groupon mulling entries this year.
The Silicon Valley start-up filed papers with the U.S. Securities and Exchange Commission on Thursday for an IPO, through which it intends to raise as much as $175 million.
In a blog statement, the company said that the number of shares to be offered and the price range have not yet been determined.
The site’s paperwork with the SEC reveals a good financial health. It had grown revenues a hundred-fold from just $1.2 million in 2005 to $120 million in 2009. But, the company was in a net loss position for most years through 2009, as it has invested back a major portion on product development.
However, in the first nine months of 2010, it has turned in a net profit of $10.1 million, which compares to a loss of $3.4 million in the same period last year. Revenues doubled in the period to $161.4 million from $80.8 million a year ago. As a percentage of revenue, LinkedIn has spent about a third on product development during the period.
A look at the business networking site’s balance sheet shows it had $89.6 million in cash on hand and total assets of $197 million as of September 30, 2010.
The company was co-founded by ex-PayPal executive and angel investor Reid Hoffman. The website LinkedIn.com was launched in May 2003. By the end of that year, it had 14 employees and about 78 thousand members. Since then, the employee base has grown to 990 and it claims of having over 90 million members today.
Hoffman and his wife Michelle Yee are the largest shareholders in the company owning 21.4%. Venture capital firms Sequoia Capital and Greylock Partners, put together, hold about 35 percent stake.
The company, which calls itself the world’s largest professional network on the Internet, generates revenues by selling hiring solutions like LinkedIn Jobs and LinkedIn Corporate Solutions both offline and online.
In the recently ended nine-month period, 41 percent of revenues came from the hiring segment. Fee from marketers or advertising revenues and online sales of premium subscriptions are the other avenues.
Premium subscriptions comprised 27 percent of the nine-month revenues, and the company acknowledges that growth here will largely depend on its ability to increase the number of registered members and offer compelling features. Roughly a third of its revenues come from customers outside the United States.