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LinkedIn valued at $4.25bn

LinkedIn sold shares on Wednesday, and the valuation of the business was $4.25bn (£2.63 bn). They sold 7.84 million shares at $45 each which raised a total of $352.8m. Investors see the potential for the professional networking site to link companies with customers and job seekers.

The company shares are expected to begin trading on the New York Stock Exchange today. LinkedIn raised the expected price range of their IPO by 30 percent to $42 to $45 per share from $32 to $35. This strong investor demand bodes well for other social networking organisations which are expected to go public in the coming months, such as Groupon, Twitter and Facebook.

Paypal started in the house of co founder Reid Hoffman and now it is valued at $4.25 bn. Facebook which has been valued at $70 bn is expected to go public in April 2012. Groupon are also valued between $15bn and $20 bn.

LinkedIn has a slightly different business model because it makes more money through offline sales rather than through online advertising or Internet services. Last year 56 percent of LinkedIn’s net revenue came from field sales with 44 percent generated from online sales. They have grown in size from a modest 4,500 members in 2003 to a whopping 103 million members this year.

KitGuru says: Another success story …

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