Big Year Ahead For Social Media And Internet IPOs

Spotify IPOEarlier this week, I talked about the successful IPO of Millennial Media (MM).  Remember, the stock doubled on the first day of trading.  And while MM has given back some of the gains, the shares are still trading at well above the IPO price.

So what other exciting social media and internet IPOs are coming up this year?

There are several that should be on your radar…

Of course, we all know the Facebook IPO is coming up.  The latest buzz has the IPO happening sometime in May.  I’ll be talking plenty about that as the big day approaches, so we’ll leave it alone for now.

Another huge social media/Internet IPO will occur when Twitter goes public.  The microblog site is growing astronomically in popularity.  However, that IPO isn’t expected until 2013… unless the company gets acquired.

Either way, it doesn’t look like we’ll see a Twitter IPO in the near future.

But don’t worry, there are still plenty of exciting social media and internet IPOs on the horizon.

Here are three I find interesting…

Spotify is an online music service offering streaming of selected music from a range of major record labels.  The service’s millions of users can browse music by artist, album, record label, genre, or playlist.

The company generates revenues through paid subscriptions and advertising.  Basically, buying a subscription removes advertising for users.

In many ways, Spotify is similar to Pandora (P), an online, streaming music company that had an IPO last year.  With Pandora sporting a current market cap of $1.7 billion, Spotify should be in line for their own strong debut later this year.

Another upcoming IPO to keep an eye on is Foursquare.

Many Facebook users will have heard of Foursquare.  The location-based social networking website allows users to check in at venues using mobile devices.  Each check-in awards the user points and sometimes “badges”.

What’s interesting about Foursquare is the tie-in between Facebook (where you can see who’s checking in at what location), mobile devices, and location-based networking.

Clearly, there’s a ton of potential for targeted advertising and marketing with Foursquare.  The question is how the company will generate profits. But hey, when have earnings ever gotten in the way of a successful IPO?

Finally, there’s Dropbox.

Dropbox is a web-based file hosting service.  The company uses networked storage to allow users to store and share files and folders with other users.  Dropbox has applications both for retail usage (such as sharing pictures) and business use.

Essentially, Dropbox combines the cloud computing concept with social and business networking.  And with an actual revenue model in place, Dropbox could be ready for an IPO in the near future.

I’ll continue to update these and other exciting social media and internet IPOs as they get closer to debuting.  Several of these companies will IPO as small caps and could make solid additions to your portfolio.

Yours in profit,

Gordon Lewis

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Category: Internet Stocks, Investing in Penny Stocks


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