Rumours are circulating that business-focused social networking site LinkedIn could, once again, be an acquisition target. Several months after the last set of rumours died out, Eric Eldon and Matt Marshall at VentureBeat (http://venturebeat.com/2008/05/05/whats-happening-at-linkedin-is-it-getting-bought/) report that a board meeting overran last week and seemingly this alone has got tongues wagging. Now everyone is looking at anything founder Reid Hoffman has said recently for further clues.

For those who aren't up on this recurring story, News Corporation was rumoured to be interested in buying LinkedIn last autumn as a complement to their Wall Street Journal business -- the demographic is perceived to be much the same between the two and LinkedIn would bring with it some welcome online revenues (suggested to be around $100M annually). But the rumours fizzled out as quickly as they had started when News Corp announced some other (unrelated) acquisitions instead.

Following the extended board meeting last week, however, the rumour mill has once again sparked into life with top of the potential suitors being... yep, News Corp. The match between LinkedIn and the WSJ still applies, gossips argue.

There was no talk of a value in the article I read, but US$1B - US$1.5B was being discussed last year. Since then, LinkedIn has grown another 5M members. So a higher valuation this time around?

It is probably fairly easy to place a true market value on LinkedIn, as it has a publicly listed competitor in Xing, which is on the Frankfurt junior exchange. Xing is smaller in terms of users (4M members as opposed to LinkedIn's 20M members), but it has a more international presence and seems to be earning more from each of them: it's Q1 2008 results revealed around US$11M in total revenues with around US$3.88M EBITDA. And its market cap? Just below US$300M as of close of markets today.

Line the two up along aside each other and the comparison would point to LinkedIn NOT being a billion dollar company in today's markets dominated by the credit crunch and panic over rocketing fuel prices. So with LinkedIn adding 1M new members a month currently, would its shareholders sell for half of what they thought they may get from Murdoch just before Christmas? I don't think so. Expect some interesting partnership news soon perhaps, but I don't foresee a sale for a little while yet.

Ian Hendry
WeCanDo.BIZ
http://www.wecando.biz