Despite all the market volatility, it still looks like investors are hungry for social networking IPOs, especially from the top operators like Facebook and Twitter. The problem is that it may be at least a year until they hit the public markets.
In the meantime, investors have been focusing on proxies. Perhaps the most popular one is LinkedIn (NYSE:LNKD), which has done a good job holding its hefty valuation, even though it does not have the pizazz of a consumer play.
Yet Wall Street is trying to find ways to fill the void. One possibility is an IPO of Glam Media. While the company is primarily an advertising network platform that’s focused on content for women, it’s lately been pushing aggressively into social networking. For example, the company has been putting together a group of thousands of bloggers.
But this week, Glam made another big move, agreeing to pay $150 million for Ning, which is one of the pioneers in social networking. The site essentially allows publishers and authors to create their own communities. So far, there are over 100,000 of them, which collectively attract more than 60 million unique monthly visitors.
What’s more, Ning charges a monthly subscription fee, which provides for a steady recurring revenue stream. There is also integration with other social platforms like Facebook, Twitter and Google’s (Nasdaq:GOOG) G+.
So by combining Ning with Glam, there will be a reach of 240 million users and 3.1 billion page views. No doubt, this is still well below Facebook’s base of 750 million users, but it will likely be enough to whet the appetite of IPO investors.
Marc Andreessen is the co-founder of Ning. H now has one of the top venture capital firms in Silicon Valley and sits on the boards of companies like eBay (Nasdaq:EBAY) and Facebook. And yes, he’ll be joining the board of Glam Media as well. So it seems like a good bet he’ll be receptive to finding a way to make this a top public company in the social networking space.
Tom Taulli is the author of “All About Short Selling” and “All About Commodities.” You can also find him at Twitter account @ttaulli. He does not own a position in any of the stocks named here.
