Investors Return to the Internet

The IPO market is once again booming, with online companies accounting for a significant portion ofthe recent activity. Such fervor from investors has not been seen since the dot-com boom of the late 1990s. So what’s the reason for this new round of excitement? An article in the May 12, 2011 edition of The Economist entitled “Another Digital Gold Rush” presents three possible explanations. First, because of recent advances in technology, including smart phones and tablets and cloud-computing, it is now easier and cheaper to launch online businesses. Second, the next batch of eager and wealthy investors is on the scene, clamoring to cash in on the action. And, third, we are seeing more companies outside of the US represented, with particular attention being paid to Internet firms in China, home of the world’s biggest online population.

Here’s a look at some of Internet companies that have filed to go public within the last couple of years. This sampling does not include the most buzzed-about companies that have not yet filed, but are expected to in 2012 (Facebook, Twitter, Zynga, Groupon, and Yelp). While today’s industry analysts continue to draw comparisons to the last bubble, investors are counting on the fact that this time around they are witnessing attributes previously overlooked: a proven business model and positive revenue growth.

• Business social network company LinkedIn was the most recent to cash in, with its IPO on Thursday raising more than $350 million.
• Demand Media, the operator of online tutorials provider eHow, humor site Cracked.com, and Trails.com, among other websites, went public on January 25. It raised about $151 million.
• Often labeled “China’s version of Facebook”, Renren went public on May 4 and raised some $743 million.
• Jiayuan.com is China's largest online dating portal. It went public May 11, raising some $78 million.
• Internet radio station Pandora Media wants to raise about $100 million. It filed for its IPO on February 11.
• Real estate website Zillow is expecting a modest $52 million from investors. It filed on April 18.

Amy Schein covers the media industry for Hoover's.