LivingSocial developing $1 billion IPO

Posted by David Gomez

The daily deal site LivingSocial is reportedly meeting with banks to develop an initial public offering of about $1 billion.

But market “experts” swear that all of these huge IPOs are not part of a new internet bubble….
    
According to Reuters, the offer shows that the Washington, D.C. based company is valued in the range of $10 billion to $15 billion. That’s not a lot of money for a site that shows you where to get coupons or anything.
    
And of course, a representative for LivingSocial has declined to comment.
    
LivingSocial is the latest in a long line of Internet companies who wish to get funds from investors that jumping on the LinkedIn, Twitter, Groupon and Facebook bandwagons.
    
Professionals expect the online gaming company Zynga to file its IPO on Thursday. The value of the company could be as high as $ 20 billion.
    
Groupon is the No. 1 social deal site. They have filed for their public offering and they plan on raising $750 million, which could bring the value of the company to around $15-$20 billion. LivingSocial has to settle for being the No.2 social deal site for now.
    
LivingSocial gives users discounts on restaurant dining, lodging and other items. They send alerts to their 39 million members through emails about the deals. They get their profit from local merchants who agree to the discounts.
    
The company is expecting to make $1 billion this year.
    
LivingSocial raised $400 million in funding in April that came from organizations like LightSpeed Venture Partners and Amazon. This gave them a robust value of roughly $3 billion.  
    
It is expected that LivingSocial will pick their underwriting banks by the end of the week, according to CNBC, who first broke the story.

So are all of these extremly valuations of Internet companies based on reality or are we seeing a new Internet bubble? If you are thinking about investing in any of these companies you might want to ask yourself that question.