Internet IPO Mania Dredges Up Interesting Offerings

By Todd Shriber

With all the fervor created over internet-related initial public offerings (IPOs) so far this year, there were bound to be a few lesser-known firms that decided to capitalize on the frenzy. LinkedIn (LNKD) is one thing, as the company had a well-established brand before its recent IPO. The same can certainly also be said of Groupon as it approaches its own IPO. Even Pandora (P) was at least a credible brand before its IPO last week. And Facebook, well, everyone and his sister knows about Facebook – which may suggest this horse has run its race. But that’s another topic…

As with any craze, it wasn’t not before others with perhaps less-recognizable names thought this was their IPO moment as well. Groupon, for instance, has nearly 500 competitors – one of which, LivingSocial, advertises on Pandora all the time. CNBC reports LivingSocial hasn’t filed the necessary documents with the Securities and Exchange Commission, but the firm is reportedly mulling an IPO nonetheless. Granted, LivingSocial is no slouch and could be worth an estimated $3 billion based on recent investments in the company, according to The New York Times.

On the other hand, Skullcandy is even more anonymous in terms of a tech IPO in waiting. The maker of headphones and other music-related fare is actually profitable already, CNBC has reported.
And even Angie’s List, which is sort of a Yelp.com for plumbers and other household services providers, is also getting in on the IPO act, Bloomberg reports.

There was a time when IPOs were undertaken in order to raise money for expansion. But with the cost of technology hardware dropping fast, it seems the largest cost faced by these socially-minded web firms is advertising. In some cases, like LinkedIn, various types of referral fees appear to be the largest money-makers. Yet the search continues for ways to fully monetize social networks continues to segment into ever-smaller niche verticals, making each firm going public based on a narrow slice of the social-media market that much more vulnerable to fickle consumer tastes, privacy concerns, data breaches, and technology innovation.

Ultimately, the market will be the ultimate barometer of how necessary these IPOs really are; some of these companies will flourish while others will not. At least in case of Angies List, the name alone is enough to make one wonder if Craigslist will ever become a public company. No offense to Angie, but Craigslist is probably the more popular of the two, AND talk of a Craigslist IPO was quashed long ago.

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