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“Got kitesurfing on the mind, mixed with some search & classification tech, and a dab of political ranting”

OpenBC, now Xing, now public

Posted by direwolff on December 27, 2006

This has to be the most underwritten story of this year. You’d think a social networking company like Xing, that competes with LinkedIn and goes public at 4.5x the valuation that LinkedIn got in its latest private equity financing round deserves some attention. As has been widely reported, LinkedIn’s valuation (I’m presuming post-money but I could be wrong) was $250M with a current base of 8.5 million members. Xing went public last week with a market capitalization of €157M (~ US$200M) with much fewer members. Here’s an excerpt:

OpenBC, which is rebranding as Xing, has around 1.5 million members, and was able to boost its revenues year-on-year from €1.6 million to just under €6 million at the end of the last fiscal year.

Now that should have been pretty newsworthy, but surprisingly even in Google News, you had to look down the page several results to find this story. In Techcrunch it wasn’t mentioned at all, except in the 82 comment made on the Yahoo! “Project Fraternity” Docs Leaked story . Mashable did pick up on it and devoted two-thirds of a post to the story.

What surprises me about the lack of discussion here is that Xing in effect has gotten a valuation of just over $137 per member compared with LinkedIn’s valuation of just under $31 per member. By these standards, LinkedIn’s investors got a heck of a deal. The closest comparable to Xing is Facebook if we consider the reported (in the same Techcrunch post from above) Yahoo! offer of $1.62B for their approximately 9 million members (~ $180 per member).

So the question I have, is why has this story not made more headlines? Heck, I couldn’t swing a stick in the blogosphere without running into the LinkedIn valuation story. Is it that it’s not an American thing? Given the reach that social networks are now getting geography should have little to do with it since all of these services are crossing borders. I’m puzzled by this because I knew this IPO was going to happen, but didn’t hear much talk about it before, during or since and am wandering how was such an important event towards the valuation of social networking businesses, not discussed more widely. Hmmmm…

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