Bubbly Bubbly and it's not champagne...

Many internet star-ups are willing to go public. For example, Linkedin, a professional network, filed for an initial public offering in January 2011 and traded its first shares on 19 May 2011, under the NYSE symbol "LNKD''. It was valuated at $8.8 billion. Groupon, Pandora and probably Zynga the creators of Farm Ville; all these web outfits are queuing to join the stock scenario. 

Also, other sites from China, Russia and elsewhere are interested in listing on the American exchanges. Once, Linkedin debuted the price of its shares doubled. After, Russia's Yandex decided to go public, it floated its shares on the NYSE and saw its share price soar by more than 50%. Yandex is a Russian IT company which handles the largest search engine in Russia, with 64% market share and ranked eighth-largest in the world. It is attracting more than 56 million users from all over. The website is also present in Belarus, Kazakhstan and Ukraine. Yandex Labs, is a another division of Yandex and it is located in San Francisco Bay Area.

Additionally, Groupon is also willing to go public. It has been labelled as "the fastest growing company ever" and has been valued in $15 billion. It is less than 3 years old and it already operates in 43 countries and has 83 million subscribers. Even though it seems to be very successful, it lost $390 million in 2010 and $103 million in the first quarter of this year. How can a company that is loosing money be valued in $15 billion? who knows... but Price Waterhouse Coopers (PWC), ranks web firms according to their "value per user". It is calculated by dividing a start ups's estimated worth by the number of its users. According to this ranking approach Groupon scores well, just below Facebook and Renren (a Chinese social network that already is listed on the NYSE).

All these social media companies seem to be over valued. So, does is this market bubbling up? Let's wait and see what happens, hopefully no bubble will burst.

Based on the article "Welcome to IPOville" from The Economist, June 11th-17th, 2011.