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New Career Opportunities Daily: The best jobs in media.

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New Career Opportunities Daily: The best jobs in media.

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New Career Opportunities Daily: The best jobs in media.

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New Career Opportunities Daily: The best jobs in media.

Zynga’s about to go public. Groupon and Angie’s List just did. And, until the middle of August, social media and tech companies were lining up for their IPOs and executing them. Of course, Facebook is waiting in the wings. In a way, it feels like 1999 all over again … the difference being that we have the lessons of 1999 this time around. And perhaps the greatest is knowing when a company really is ready to go public.

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New Career Opportunities Daily: The best jobs in media.

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New Career Opportunities Daily: The best jobs in media.

There are more than 200 companies in the IPO pipeline, many entering at a time when the IPO market was ugly (namely Q3 2011). A lot of money has been spent preparing to go public, even in a market that doesn’t favor it. Zynga is set to start its IPO roadshow this week and go public (rumored) on December 15, 2011. Groupon thought it beat the odds in an ugly market before getting skewered just as soon as short-selling was permitted in its stock.

So, what’s going on?

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New Career Opportunities Daily: The best jobs in media.

1. Zynga: the social gaming leader is the next social media IPO in the pipeline. The company is doing its IPO roadshow this week and is rumored to have an IPO date of December 15, 2011. But, the numbers keep looking uglier. The latest is that the capital raise, of around $1 billion, will come at a valuation of only $9 billion.

2. Kayak: Kayak is a tool you can use to search for cheap travel options across a wide range of online travel agencies and other travel websites. The company filed for its IPO a year ago but still hasn’t pulled the trigger, largely due to market conditions. It’s most recent S-1 update shows positive results, but the CEO says the company doesn’t have to go public (i.e., for the capital it needs to operate). This follows mixed messages from the CEO and the CMO.

3. Yelp: letting people vent about awful consumer experiences is a great business, it seems. The user-generated review site is looking to raise $100 million by going public, but there are few other details so far. Rumor has it the IPO valuation could be as high as $2 billion.

4. LivingSocial: once thought to be on the road to an IPO, right behind competitor Groupon, LivingSocial has effectively pulled out of the process, opting instead to raise another $200 million in venture capital money. The deal comes with an implied valuation of $5 billion.

5. Gilt Groupe: this year has been a good one for online consumer business companies (even Groupon and Angie’s List managed to go public – and let’s not forget about Zillow, HomeAway and Pandora). According to Kevin Ryan, Gilt’s CEO, the company is looking to go public in 2013.

6. Twitter: market-wide speculation has the microblogging site nailing its IPO in 2013, as well. With only $140 million in revenue forecasted for this year – despite an implied valuation of $8 billion in its last venture capital round – this makes sense. Twitter would benefit from time to keep picking up new advertisers and launch its self-service model.

7. ExactTarget: the email and social media marketing platform filed last week to for an IPO that would raise $100 million. Details are still thin, but it’s worth keeping in mind that ExactTarget, though not profitable, has a strong growth plan in place. Capital used to fuel expansion could be what it needs to go the distance.

8. Glam Media: CEO Samir Arora wouldn’t say at Business Insider IGNITION 2011 last week when he plans to take Glam Media public. The recent hire of an IPO-ready CFO, however, indicates that discussions must be in the works.

9. Jive Software: briefly rumored to be an SAP takeover target, the B2B social media software company has filed to raise $117 million in its IPO. It isn’t profitable yet, but Jive Software is optimistic enough to pursue a valuation of above $500 million (half the level of earlier speculation about the company). Kleiner Perkins, Sequoia Capital and the cofounders stand to get richest.

10. Facebook: no social media IPO list would be complete without Facebook, right? The latest rumor is that the company is going to file in April and go public in September. The goal, it seems, is to raise $10 billion in capital on a $100 billion valuation. But, there’s been no shortage of rumors about the Facebook IPO for a long time now …

New Career Opportunities Daily: The best jobs in media.

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New Career Opportunities Daily: The best jobs in media.

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New Career Opportunities Daily: The best jobs in media.

There’s plenty of speculation out in the marketplace right now. Let’s take a look at where the seven hottest pre-IPO social media companies currently stand:

1. Facebook: that’s the one everybody cares about, right? And by everybody, I include the folks at Zynga, who have IPO ambitions of their own. Well, here’s the deal: nobody seems to know when Facebook is going public (except maybe Mark Zuckerberg, Sheryl Sandberg and a handful of others). In April, however, the social media giant is going to have to file with the SEC because it has more than 500 shareholders. When they are forced to open the kimono, an IPO is expected to follow. That could come in September 2012.

2. Groupon: can you believe these guys are still pushing forward? After several amendments to the SEC documents they filed with the SEC, because CEO Andrew Mason apparently loves to see his own words in the press, several senior-level employees have departed the company. Nonetheless, Groupon remains committed to going public.

3. TripAdvisor: this customer review site for the travel sector filed earlier this year and hasn’t said anything about altering its plans. So, there’s a chance Expedia will still spin it off this year. Of course, there are signs of trouble nearby: Kayak, which also plays in the online travel space, recently revealed that it’s deferring its IPO.

4. Glam Media: could this online advertising platform take the plunge? It’s still in the rumor stage right now, but the company has hired a CFO who has gone the distance before. That’s usually a good sign that the idea of going public is being bandied about internally.

5. Zynga: there are so many reasons for Zynga not to go public, but the company hasn’t pulled back from its filing. In fact, it issued an amended one last week, which left accountants wondering how to depreciate virtual assets. The consensus is that Zynga is a fairly strong company, and its brand will help with an IPO even in a volatile market.

6. LivingSocial: While Groupon is gung ho to go public, its competitor is showing more caution. The latest development may be to accept another round of venture capital money (amounting to $200 million), in lieu of a near-term IPO.

7. Twitter: you’re going to have to wait for this one. The earliest Twitter would go public, according to the rumors going around, is sometime in 2013. This might be smart. Twitter has some work to do developing revenue streams, making smart acquisitions and building out its platform with new features that have been owned so far by its application ecosystem. But, if Twitter can’t pull all this off, it will have missed an opportunity to cash out when expectations were lower.

New Career Opportunities Daily: The best jobs in media.

Now, you’d expect a company with plunging earnings to take a serious valuation hit. And, since it’s not public yet and is still young, Zynga is ripe for a certain amount of volatility. It’s just the nature of the beast. So, it comes as no surprise that its valuation estimate would plummet from $20 billion to $10 billion.

Of course, the matter is made worse by the fact that this is the first quarter-over-quarter bookings decline Zynga has ever experienced. The fact that it’s a doozy only hurts even more. Bookings were off 4 percent, but that includes some revenue Zynga can’t recognize for a while (it will show up later: blame the inflexibility in depreciating virtual tractors). The earnings hit, however, can’t be ignored. It’s just way too big, even if other metrics seem positive.

Now, how much of that $20 billion valuation was legitimate is a subject of debate. According to Motley Fool:

“The $20B figure was thrown around back when (Zynga) filed and everyone was going bananas for the big Internet 2.0 names,” [Paul] Bard [of Renaissance Capital] wrote in an email. “But with the markets down 15% and given the 2Q bookings number, that seems like an aggressive target if it were to price the deal today.”

There is a certain “hype premium” at work with Zynga. After all, Motley Fool notes, TripAdvisor is set to go public this year and has comparable first-half earnings and faster earnings growth than Zynga.

New Career Opportunities Daily: The best jobs in media.

But, it is where you’ll find the handful of companies that interest you most.

Barris notes, “Places like SecondMarket are trading about 50 different names,” adding, “half of the volume is one name – Facebook. Toss in Twitter and Zynga, and you have the lion’s share of the volume.”

Now, places like SecondMarket and SharesPost are the only places you’ll be able to find the likes of Facebook, Twitter and Zynga … at least for now.

Don’t take this perspective as pessimism. The Wall Street Journal reports that Baris would “love to see the secondary markets become more widespread in terms of their adoption.” It’s easy to see why: these venues provide early exits for investors (including the venture capital community) and employees who have been waiting patiently for a while to cash out. As companies take longer to go public, especially relative to the mania of the late 1990s, trading in these environments can alleviate some pressure that could lead to talent implications.

And Barris puts his money where his mouth is.

His fund sold shares in Groupon in the secondary markets, pulling in $70 million “on top of a $14.8 million investment.” The fund still has a 14.9 percent stake in the daily deals site. He explains his reasoning:

“One of the problems with any offering is the overhang of venture capital ownership,” he said. “If you start metering that out at that point in time by taking 5% to 10% of your interest off the table — if the entrepreneurs take a little of their interest off the table so that there’s still plenty there to incent them–you could argue that actually lets you run the table,” said Barris, who led the firm’s first $4.8 million investment in Groupon back in January 2008 when it was called ThePoint.

What’s really interesting, however, is that the secondary markets themselves are living this way. This week, SecondMarket, which is also backed by New Enterprise Associates, announced it would let its employees sell as much as $13 million in SecondMarket stock via its own platform (at a valuation of $160 million).

This doesn’t mean that everyone’s on board, though. Bob Ackerman, of Allegis Capital, believes that these transactions don’t offer enough transparency. Eventually, he says to the Wall Street Journal, somebody’s going to get sued.”

He’s not the only one who isn’t crazy about the selling of pre-IPO shares on these private exchanges. Some companies are making moves to prevent such sales in their agreements with venture capital firms. One of the reasons for this is to limit the number of investors in a company. As Facebook has shown us, the world gets a lot more complex when you hit 500 – and face a number of SEC requirements.

New Career Opportunities Daily: The best jobs in media.

So, will the biggest name in social gaming be able to use its brand to beat the challenges before it? Well, word on the street is that Zynga is one of the few companies that could go public in today’s difficult market conditions, but that doesn’t necessarily mean it should. We’ve all heard our parents tell us that patience comes to those who wait. Let’s take a look at five reasons Zynga should heed this advice:

1. You can’t ignore the second quarter results: when your earnings fall around 95 percent year over year, people notice. And they tend not to be impressed. Zynga did go the second quarter without a big release, and the results reflect that. Unfortunately, Zynga makes its money on big releases, so it will have to develop a plan for addressing these gaps in the future.

2. The market is still ugly: there’s a reason so many IPOs have been pulled this year – the market sucks. High levels of volatility following the downgrade of U.S. sovereign debt in mid-August turned the best year for the IPO market since 2007 around completely.

3. Google Plus isn’t enough: Zynga appears to be dealing with its Facebook-dependency issues by diversifying into mobile and Google Plus. Unfortunately, this will probably take a while to put even the smallest of dents into the share of revenue Zynga derives from Facebook. For it to make a difference ahead of an IPO, Zynga would have to wait a (long) while.

4. Bigger upside: even if Zynga could go public in this market, it might be able to fetch a higher valuation by waiting until markets calm down a bit. As long as the company doesn’t need an additional capital infusion (as some argue Groupon may), putting off the IPO for a while could give Zynga time to build out its strategy, increase its profitability and stabilize the business a bit. In the end, it would see a much higher IPO valuation, effectively rewarding patience.

5. Facebook isn’t going public until sometime next year: until Facebook goes public, it will have a lot more flexibility. This could be problematic for Zynga. Once Zynga goes public, it will be at the mercy of public capital markets. If Facebook makes a decision that is detrimental to Zynga – which, as a private company, it will be able to do more easily – Zynga would be exposed to incredible risk. And investors probably wouldn’t be too forgiving. Also, it remains to be seen how early investors would perceive the nature of the Facebook-Zynga relationship ahead of an IPO.

New Career Opportunities Daily: The best jobs in media.

On Tuesday, players of the Facebook game will be able to interact with Iglesias character when he visits their cities. They will have opportunities to collect items the singer is known for and even get a glimpse of his previews relating to his newest music videos.

Rightly so, there is a financial deal between Zynga and the singer, but the company did not offer those details. It would be interesting to know how much a celebrity makes for guest appearances on social games, another avenue for extra revenue for celebrity endorsements.

Iglesias’ team approached the gaming company with the idea for a game integration. The team has been involved with the the design from the beginning. Deciding things like what the characters could do and what players can collect, including virtual hats, boots, bling and a speed boat — relating to Iglesias life in Miami when he owned his very own speed boat. I wonder if he will be offering rides on platform.

“CityVille” is a pretty cool social game where players build and run virtual cities. The cities are developed with buildings, farms and the usual infrastructure in a real city. The game is free with Zynga earning money by charging for virtual decorative items for players who want to get ahead in the game.

Iglesias told the media he played the game only once — ouch for Zynga. He avoids video games because of their attention-grabbing effects on him. As a boy, he couldn’t pull himself away for video games – he steers clear of them.

New Career Opportunities Daily: The best jobs in media.