Tuesday, May 26, 2009

Will OpenTable Spark An Internet-IPO Resurgence?

The OpenTable IPO, the first venture-backed public offering since August, popped an impressive 60% on the first day of trading. We’ll find out over the next year if it’s the beginning of the end of the internet IPO drought (to be precise, there’s been a dearth of IPOs in general).
Question is: If the market does open up again, which companies are good candidates to follow Open Table and go public?. In a New York Times article in February, venture capitalist Alan Patricof said most startups now need to reach about $250 million in value before going public (he reiterated that in a conversation with me a few days ago). So we scanned different sources, from media outlets to analyst reports, to find companies with valuations above $250 million, and that aren’t overly dependent on advertising (because of the state of that revenue source). Here are four candidates that have emerged.
Facebook: Valuations ranging from a few billion to many billions and revenue from virtual goods (in excess of $100 million by some estimates) as well as advertising. Even if the company is losing a lot of money, as many speculate, the internet darling would likely be well received by public investors. The Ladders: Valued in the hundreds of millions, and has a subscription-driven revenue stream. In addition, the job placement site is operating at a time when there have never been more people looking for jobs.Linden Labs: Some value the virtual-world company at over $1 billion, and the company estimates users will make $450 million in virtual transactions this year.
By:Rory Maher

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