- Associated Press - Friday, May 20, 2011

SAN FRANCISCO (AP) - There was an unmistakable echo of the dot-com boom Thursday on Wall Street.

LinkedIn, a trailblazer in the online networking craze, went public with a roaring stock offering. Within minutes, shares were trading at twice the value set by the company.

Buyers crowded the floor of the New York Stock Exchange, and financial news networks flashed LinkedIn’s stock price urgently all day. By the closing bell, the company had a market value of $9 billion, the highest for any Internet company since Google had its initial public offering seven years ago. Millionaires and even one billionaire were made, at least on paper.

The stock, issued at $45, went as high as $122.70 just before noon and closed at $94.25 on a trading volume of 30 million shares. All this for a company that skeptics say amounts to an online Rolodex, a place on the Internet for professionals to post resumes and connect with one another and potential employers.

It was enough to remind some people on Wall Street of the heady late 1990s and the debuts of companies like Netscape Communications _ and, more infamously, long-forgotten names like Pets.com and Webvan. Investors wondered whether LinkedIn will be a precursor to another financial frenzy in Silicon Valley.

“I definitely think this will be a catalyst,” said longtime technology investor and analyst Michael Moe, CEO of Global Silicon Valley Asset Management. “Investors who like growth stocks have been stuck in a desert for a long time, and now it’s like they have found this great pitcher of water.”

LinkedIn is already worth $9 billion, or 18 times its projected revenue this year. Major Internet companies, including Google, trade at an average of about five times projected revenue, according to an analysis by Capital IQ.

Using another measure, price-to-earnings ratio, which compares a company’s market value with its profit, LinkedIn finished the day at a staggering 554 _ a number reminiscent of the late 1990s tech bubble. By comparison, the average P/E ratio of technology companies in the Standard & Poor’s 500 index like Google and Apple is 15.

Two-thirds of LinkedIn’s revenue comes from the fees it charges to help companies find and hire workers. Francis Gaskins, president of IPOdesktop.com, said that makes the company more like Monster, an employment firm where business depends a lot on the health of the job market.

“Can we stop asking if we are in a bubble now?” venture capitalist Mitchell Kertzman said after hearing that LinkedIn stock was trading above $100. “We are clearly in a valuation bubble.”

If the stock market is thirsty for more businesses that connect people on the Internet, there’s a backlog of privately held companies that might one day satisfy it.

The short list includes Twitter, the 140-characters-or-fewer messaging service; Zynga, which makes online games like FarmVille; Groupon, the coupon site; and, of course, Facebook, the social network with more than 500 million users.

None of those companies has revealed specific plans for going public. Facebook has at least dangled the possibility of filing for an IPO before May 2012. A private investment led by Goldman Sachs Group Inc. valued Facebook at $50 billion in January.

“If people are this excited about a professional networking service like LinkedIn, you can imagine what kind of frenzy there is going to be when Facebook goes public,” said eMarketer analyst Debra Aho Williamson.

The 109 percent first-day gain for LinkedIn, based in Mountain View, Calif., nearly mirrored Netscape’s first day when it went public on Aug. 9, 1995. Netscape rose that day from $28 to a close of $58.25, or 108 percent.

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