With LinkedIn IPO Set, Rival Viadeo Cancels Its Own Flotation

Two business social networks; two divergent paths – as LinkedIn plans to achieve a $3 billion valuation in a floatation that is now planned for Thursday, European counterpart Viadeo is aborting its own IPO.

Viadeo had mulled floating in Europe, the U.S. or Hong Kong but CEO Dan Sefarty now tells Reuters: “We saw a tremendous level of interest by bankers, private equity investors and venture capitalists. But we decided that our fundamentals were good enough that we could wait for a listing and instead focus on growing the business.”

Reuters: “Viadeo, which says it has more than 35 million users, is seeking to position itself as the more international cousin of LinkedIn (NYSE: LNKD), with its users coming from Europe, China, India and Latin America.”

Two problems with that – 1) LinkedIn is not exactly blind to international (56 percent of its users come from outside the U.S., according to its IPO prospectus), and 2) competitors like Xing have been trying the same thing for a few years – both Xing and Viadeo are targeting Latin America and Far East expansion.

Sefarty (via Reuters): “We want to grow and not be faced with the pressure to deliver profitability right away. There is a risk of going public too early.”

Viadeo has over 35 million users, compared with LinkedIn’s over 100 million. Sefarty says Viadeo may come back to IPO in two years’ time. Until then, others will be canaries in the IPO mineshaft….

LinkedIn has just set a price target of between $32 and $35 a share for its floatation, which is planned for this Thursday, from which it expects to raise up to $315.5 million – a sizeable warchest for investment at home and abroad.

Scott Sweet of IPO Boutique tells MarketWatch LinkedIn will be “the first of what is likely the start of several true U.S. social networking firms to come public”.