Professional Social Network, LinkedIn Looking For $1 Billion Valuation

Amit Chowdhry | Monday May 5, 2008 | 496 Views |
Categorized under Allen & Company, LinkedIn

LinkedIn Logo
Reid Hoffman is part of the PayPal alumni club.  Former PayPal employees include:
1. Steve Chen, Chad Hurley, and Jawad Karim - YouTube founders
2. Roelof Botha - Sequoia Capital Partner
3. Jeremy Stoppleman - CEO of Yelp
4. Max Levchin - CEO/Founder of Slide
5. Elon Musk - Founder of SpaceX
6. Peter Thiel - President of Clarium Capital and early Facebook investor

There seems to be a trend of former PayPal employees that go off and start their own successful ventures.  And LinkedIn is no different.

Dave Wehner, a Director at Allen & Company is working with LinkedIn to find venture capital for the professional network to be given a valuation at $1 billion.  This valuation is about 1/15th of rival, Facebook.  Wehner also supposedly helped Bebo sell to AOL for $850 million.  

LinkedIn has raised over $27.5 million thus far in the form of 3 rounds.  The company is expected to earn $100 million in revenue this year.

I have a LinkedIn account, but I rarely use it.  I really only login when another friend adds me.  I think that’s the social networks greatest flaw: retention.  I could be the only one, but I’ll let this poll decide.

[poll=7]

Information Source:
[1] TechCrunch:  Allen & Co. Pitching LinkedIn At $1 Billion by Michael Arrington

 

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Comments

  1. Tom Blue
    May 6th, 2008 at 12:02 pm

    Many people are surprised at this, but I don’t find it that hard to believe. Many tech/web companies are 10X revenues and I believe that linkedin still has potential for daily usage if they make the right decisions…

  2. Amit Chowdhry
    May 6th, 2008 at 5:27 pm

    Interestingly what I’m finding from the poll is that users have more of a tendency to log in once per month. This is probably to find connections (friends) or confirm all connection requests all in one go.

    The key to a solid valuation is by making users feel like that if they’re not logging in that day, they are missing out on something. Facebook mastered this with the homepage news feed idea. Personally if I don’t log into Facebook for one day, I feel like I missed out on something going on with my friends.

    How does LinkedIn get users to feel like they’re missing out on something if they don’t login today? That’s the question that the LinkedIn board should be considering to get to a valuation that they want.

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