Linkedin has 100M members and the market says that is worth $8.9B… anyone want to buy a Linkedin Group?

Well, I guess history repeats itself.  It is amazing how people never learn from the past.  The standard excuse is: “it’s different this time”.  So here we go again with euphoria over dotcom junk.  Let’s look at some interesting facts.

The Linkedin IPO debuted with a reported market cap of $8.9 billion.  Read the article in USA Today.  Linkedin has both real and fictitious members that total just over 100 million accounts.  The only value that Linkedin has is their membership.  If there are no members, then there is no value.  No member, no advertisers, no way to make any money.  So I think we can all agree that the value of Linkedin comes from its number of members.

So this means that each member is worth $8.9B / 0.1B members = $89/member.  Here are some more interesting facts:  Linkedin made $15.4M in profits on $243.1M in revenues in 2010.  It will take 577 years of those sorts of profits to get your money back. Wow, what a great deal, and to top it off they plan on losing money this year, brilliant, I guess they plan to make it up on volume :-).

Now that I have made such a great pitch for Linkedin as an investment, would anyone like to buy my groups on Linkedin?  Remember it is all about membership accounts.  My LIMSforum group has 23,000 members and I don’t even make any money or lose any money.  So far I am doing better than Linkedin plans to do in 2011.  Using Linkedin valuations, the value of my group today is roughly 23,000 members x $89 per member = $2.047 Million.  Do I have any takers out there???  I take PayPal.  Nope, I think I hear crickets.