Romil Patel's opinions on the tech industry.


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May 20, 2011
@ 10:30 am
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LinkedIn Just Laid Out The Future of Social IPOs, Now What?

Alright so, LinkedIn had its debut as a publicly traded company on Thursday. If you followed it- it exploded. My thoughts? It is absurd- now this is just my opinion, but I am going to say the stock will be worth way less than 1/2 what it is worth today, in 5 years worth of time. But that said, I think LinkedIn just played out the future for Facebook’s IPO and Twitter, if it plans to go public in the future also.

If you look at the earnings multiple and compare that to other companies, the other companies would be worth trillions. Hmmm….smells familiar. But back to Facebook and the future of social IPOs. In fact, I wouldn’t say just social IPOs, but everything related to social. Imagine Zynga having its IPO, etc. What LinkedIn did, Facebook will probably do with more noise, and quite possibly Twitter, too. The problem is that LinkedIn creates very little long term value (I feel). And the general population just doesn’t know that yet. However, a new startup BranchOut, will eat LinkedIn’s lunch, and dinner, and its fourthmeal.

Now that we’ve established that Facebook will have an even more jaw dropping debut on the public market, lets discuss how LinkedIn has a big problem.

BranchOut is basically LinkedIn ON Facebook. I should end my post here and just hit publish, but I’ll explain. People don’t want to be on 10 different services, that require remembering 10 different passwords, and connecting (finding) their contacts on those 10 networks over and over. Another problem is that some contacts are not on all 10 networks. BranchOut brings the LinkedIn features to Facebook (where the world *or at least 600 million people* lives). This makes it way too easy for people to career network on Facebook to even think about being on LinkedIn.

A lot of people might argue its good to keep social fun and social business apart from each other, but lets be honest, the world is becoming a more centralized place. We party with co-workers, and we work with friends. Others might think it will be questionable for BranchOut to build a layer on Facebook where it offers LinkedIn type functionality and the question that if BranchOut will be successful. But we can all learn a lesson from Zynga, whose supposedly valued in the billions, that building a layer on top of Facebook is possible, in a juggernaut way.

I could keep writing and express more opinions about this whole situation, but feel we should just keep it at that and watch what happens.

P.S. Congratulations to Reid and the team for such a successful exit!

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