Holy Social Networking! Linkedin Shares Pop

The greatest investor in the world warned us about social networking company valuations. Apparently, no one listened. Today the public had their first chance to buy shares of Linkedin, and they did so with a vengeance. Linkedin shares quickly doubled on its first day, giving it a market capitalization of over $8 Billion.

Wild optimism? Starry-eyed social networking naivety? Perhaps, but one thing is clear: Linkedin has today become a major company, with the potential to scale to a dominant force on the web.

The popular site derives most of its revenue from recruitment related services. The market has clearly pushed aside fears about unemployment and has instead pinned hopes on Linkedin becoming a world market for professional talent and connection. The opportunity is massive; so much so that some have speculated that Linkedin could be more valuable than Facebook, which represents a massive chunk of total Internet pageviews.

The optimism surrounding the Linkedin IPO is refreshing, if not a bit scary. Does today mark the pinnacle of social networking hysteria? Or does today represent the real beginnings of the most important method of professional connection since the Yellow Pages?

If the lofty valuation holds, Linkedin will have the cash to fund massive operations and/or make strategic acquisitions. For example, as Linkedin and Twitter continue integrating and complimenting their services, speculators will wonder if the new valuation will further partnerships. The spectacular IPO of Linkedin will no doubt propel further speculation and interest in other privately held social technology companies, such as Facebook, Groupon, and Twitter.