April 15, 2024

Advertising: Now the TV Heavyweights Have Their Week to Unveil Shows

So it seems on Madison Avenue as advertisers and agencies prepare for the annual television upfront week, to take place in New York next week from Monday through Thursday. The largest broadcast networks and cable channels — English-language and Spanish-language, from ABC to Univision — will show their programming for the 2013-14 season in 18 or so slick, expensive presentations in places like the New Amsterdam Theater, Carnegie Hall and Radio City Music Hall.

The upfront week arrives after 12 weeks of presentations by other cable channels and digital media companies, so plentiful at times that agencies and advertisers could attend three in a single day.

The Great Upfront Frenzy of 2013 — possibly the best thing to happen to the cater-waiter industry since the invention of the reversible cummerbund — began in early February and did not end until Thursday morning, when executives at the Ovation cable channel told reporters about their channel’s coming season.

“We knew this was the last week before the upfront week,” said Liz Janneman, executive vice president for advertising sales at Ovation. “We wanted to try to get some attention, and make some noise, by not being in the middle of all that.”

Ovation is adopting a new logo along with a new brand identity, “Art everywhere,” which replaces “Be moved.” The executives also described their intent to increase the amount of original programming on Ovation to 236 hours this year from 46 in 2012.

“We are doubling, tripling, quadrupling down on” additional content for viewers, said Robert Weiss, chief creative officer at Ovation, who discussed 25 new series that are being added to the lineup for 2013-14 or are on a path of “fast-track development.”

That has been perhaps the most notable trend of the preupfront upfront weeks: cable channels bolstering original offerings.

Among others saying that is the strategy are AE, ABC Family, AMC, BBC America, Bravo, FX, the Hallmark Channel, History, Lifetime, Oxygen, TBS, TNT and USA.

In addition to ABC and Univision, those scheduled to make upfront week appearances include Adult Swim, CBS, CW, Discovery U.S. Hispanic, ESPN, ESPN Deportes, Fox, Fox Hispanic Media, NBC, NuvoTV, TBS, Telemundo, TNT, Tr3s and USA.

Some are not waiting until next week to make like TV Guide and provide programming information. Fox, part of News Corporation, announced on Wednesday that it would add nine series — four dramas and five comedies — to its schedule, including shows like “Almost Human,” with Michael Ealy and Karl Urban; “Rake,” with Greg Kinnear; and “Us Them,” with Alexis Bledel and Jason Ritter.

NBC, part of the NBCUniversal division of Comcast, followed on Thursday with word of five new shows — three sitcoms and two dramas — among them “Sean Saves the World,” with Sean Hayes, and “Crisis,” with Gillian Anderson.

After the upfront week ends, networks and channels begin negotiating with advertisers and agencies over the sale of commercial time ahead of the fall. (That explains the term “upfront,” in that the dickering occurs before the new season.) Last year, in the upfront market before the start of the 2012-13 season, marketers agreed to buy an estimated $20 billion worth of commercial time.

There has been speculation that if the television industry seeks to raise ad rates for 2013-14 considerably higher than they have been for 2012-13, Madison Avenue may balk, citing recent erosion in viewership and ratings as well as a current schedule bereft of hit new series.

In a report, Brian Wieser, an analyst at the Pivotal Research Group, said he believed that any percentage increases won by the leading broadcast networks would end up in a range of 5 to 7 percent, with percentage gains for the leading cable channels “in or slightly below this range.”

Another challenge for channels and networks is a concerted effort by online video publishers to encourage agencies and advertisers to buy commercial time on Web sites to supplement or complement the TV spots they buy. There were 17 presentations with that goal during an event last week in New York called the Digital Content NewFronts, with participants that included AOL, Google, Hulu and Yahoo.

Senior executives of leading Madison Avenue media agencies like Carat, Digitas, OMD and Universal McCann, sent an open letter on Wednesday described as a “call to arms” to the publishers that presented at the NewFronts. The executives said they were eager to “put equitable skin in the game” but sought assurances that the publishers would agree to major commitments like giving online video programs “the promotion they need and deserve” and providing effective ways to measure results.

Randall Rothenberg, president and chief executive of the Interactive Advertising Bureau, which sponsored the NewFronts, replied on Thursday. He pledged in a letter of his own “to collaborate with you” and asked in turn that the media agencies agree to steps like helping to develop “seamless” viewing across all screens and to “limit the use of advertising to support the piracy of intellectual property.”

Mr. Rothenberg also invited the media agencies to meet with his association to talk about joining forces to start a “Digital Video Center of Excellence,” which would encourage demand for original online video programming. “We’ll gladly buy the pizza and beer,” he wrote.

On that note, for those who may be sad at the prospect of Upfront Nation disbanding after Thursday, TBS, part of the Turner Broadcasting System unit of Time Warner, sent invitations to an event next Friday billed as an “upfront hangover brunch.”

Article source: http://www.nytimes.com/2013/05/10/business/media/now-the-tv-heavyweights-have-their-week-to-unveil-shows.html?partner=rss&emc=rss

Media Decoder Blog: Schultz to Give Up Weekday Slot on MSNBC

One of MSNBC’s most important and lucrative time slots, 8 p.m., is about to get a new host. But MSNBC won’t name the person quite yet.

The existing 8 p.m. host, Ed Schultz, surprised his viewers on Wednesday night by saying that Thursday night’s edition of “The Ed Show” would be his last. In April he will take a new weekend shift from 5 to 7 p.m. on Saturdays and Sundays.

“MSNBC will be expanding its weekend programming, and this opens a big opportunity for ‘The Ed Show’ and my brand,” Mr. Schultz said at the end of his nightly news talk show, which is known for having a focus on labor issues and the working class in the United States.

He asserted that he had raised his hand for the assignment “for a number of personal and professional reasons.” Among them, he said: “I want to get out with the people and tell their stories.”

In the halls of MSNBC, the cable news channel owned by Comcast, Mr. Schultz’s move out of 8 p.m. has been expected at least since late last year, when The New York Times reported that the Washington Post columnist Ezra Klein was a candidate for the time slot.

Mr. Klein, who doubles as an MSNBC contributor, has filled in for the channel’s prime-time hosts dozens of times, and appeared on the channel as recently as Wednesday afternoon.

Other MSNBC figures mentioned for the 8 p.m. time slot included Christopher Hayes, the host of the weekend morning panel discussion “Up,” and Joy Reid, the managing editor of the Comcast-owned Web site TheGrio and, like Mr. Klein, an MSNBC contributor.

After Ms. Reid’s fans asked her questions on Twitter about Mr. Schultz’s announcement, she wrote, “I’m as shocked as anyone about Ed and have no idea who’s coming on at 8. Real talk.”

Several other MSNBC hosts and contributors echoed that sentiment on Wednesday night. A spokeswoman for the channel said the new 8 p.m. host (or hosts) would be named on Thursday morning, ahead of an annual presentation for advertisers to be held by NBC News, the network news division that MSNBC is aligned with.

Article source: http://mediadecoder.blogs.nytimes.com/2013/03/13/schultz-to-give-up-weekday-slot-on-msnbc/?partner=rss&emc=rss

DealBook: American and US Airways Vote to Join Into Biggest Carrier

US Airways Express and American Airlines planes at the Ronald Reagan Washington National Airport in Arlington County, Va.Mike Theiler/Reuters Express and planes at the Washington National Airport in Arlington County, Va.

Ending a yearlong courtship by US Airways, American Airlines agreed on Wednesday to merge with the smaller carrier, paving the way for the creation of the nation’s largest airline.

The boards of the companies met separately to approve the combination, according to two people with knowledge of the vote. A merger would bolster American’s domestic footprint, strengthen its presence in the Northeast and give it a bigger network to attract business travelers and corporate accounts.

The merger, the details of which will be announced Thursday morning, would create a rival with the size and breadth to compete against United Airlines and Delta Air Lines, which have grown through mergers of their own in recent years and are currently the biggest.

But while United and Delta went through bankruptcies and mergers over the last decade, American has been steadily losing ground while racking up losses that have totaled more than $12 billion since 2001. It was the last major airline to seek court protection to reorganize its business when it filed for bankruptcy in November 2011.

The wave of big mergers in the industry has created healthier and more profitable airlines that are now better able to invest in new planes and products, including Wi-Fi, individual entertainment screens and more comfortable seats for business passengers. But some consumer advocates said they worried that reducing the number of airlines would lead to higher fares over the long run and allow airlines to increase revenue by imposing new or higher fees.

The deal, which was completed in recent days, could be formalized as American leaves bankruptcy. W. Douglas Parker, the chairman and chief executive of US Airways, will take over as American’s chief executive. Thomas W. Horton, American’s current chairman and chief executive, will be chairman, though his tenure could be limited.

The merger still needs to pass several steps. It must be approved by American’s bankruptcy judge in New York. US Airways shareholders, who will also have to approve the deal, would hold 28 percent of the combined carrier.

In addition, it will be reviewed by the Justice Department’s antitrust division, though analysts expect regulators to clear the deal.

If approved, the nation’s top four airlines — American, United, Delta and Southwest Airlines — would control nearly 70 percent of the domestic market.

The merger is a victory for Mr. Parker. Over the last year, he has convinced American’s creditors that the carrier needed to expand its network to compete. In April, he won the critical backing of American’s three labor groups, which defied American’s management and publicly endorsed a deal with US Airways.

The biggest challenge for the merged company, which will be called American Airlines, will be to integrate operations over the next couple of years. That is no easy task since airline mergers are often rocky — involving complex technological systems, big reservation networks as well as large labor groups with different corporate cultures that all need to be seamlessly combined.

United angered passengers last year after a series of merger-related computer and reservation mistakes, and late and delayed flights.

Mr. Parker has done this before. In 2005, when he was the head of America West, he engineered a merger with the larger US Airways.

In this case, the merged American Airlines will still be based in Fort Worth and have a combined 94,000 employees, 950 planes, 6,500 daily flights, eight major hubs and total sales of nearly $39 billion. It would be the market leader on the East Coast, the Southwest and South America. But it would remain a smaller player in Europe, where United and Delta are stronger. The merger does little to bolster American’s presence in Asia, where it trails far behind its rivals.

American has major hubs in Dallas, Miami, Chicago, Los Angeles and New York. US Airways has hubs in Phoenix, Philadelphia and Charlotte, N.C., and has a big presence at Ronald Reagan National Airport in Washington.

In reviewing previous mergers, federal regulators have not focused on the overall size of the combined airline but instead looked at whether a merger would decrease competition in individual cities. To do so, regulators examine specific routes, or city-pairs, and look at whether a merger reduces the number of airlines there.

The last time the Justice Department challenged a merger was the proposed combination between United Airlines and US Airways in 2001. It rejected that on the ground that it would reduce consumer choice and possibly lead to higher fares.

Since then, the department has allowed a wave of big mergers that have reshaped the industry, said Alison Smith, a former antitrust official and now a partner in the law firm McDermott Will Emery.

American and US Airways only have about 12 overlapping routes, a figure that is unlikely to set off regulatory opposition, she said. One problem, however, could come up at National Airport, where the combined carriers hold a market share of about 60 percent. There, regulators might request that American give up some takeoff and landing rights before approving the merger.

Regulators sought similar concessions from United at Newark Liberty International Airport after its merger with Continental Airlines.

It is also unclear whether American needs all of its combined hubs. Analysts pointed out that Phoenix was at risk because of its proximity to Dallas, since it makes little sense to have two big hubs so close to each other.

Despite the increased concentration, consumers can still expect to find vibrant competition, said William S. Swelbar, a research engineer at the Massachusetts Institute of Technology’s International Center for Air Transportation.

“We will have four very big, very vigorous competitors in the market,” he said.

Travelers are better served by bigger airlines offering more connecting flights and more destinations, analysts said. Consumers today can easily compare fares and shop for the cheapest flight online, which keeps airfares in check.

But Kevin Mitchell, chairman of the Business Travel Coalition, disagreed. He said that consumers would see few benefits to offset the merger’s negative impact — including “reduced competition, higher fares and fees and diminished service to small and midsize communities.”

Michael J. de la Merced contributed reporting.

Article source: http://dealbook.nytimes.com/2013/02/13/american-and-us-airways-said-to-vote-for-merger/?partner=rss&emc=rss

DealBook: Trulia Jumps 30% in Debut

Trulia, the real estate information site, rose 30 percent in its debut to open at roughly $22, defying the recent lackluster performance of newly public stocks.

It’s a solid debut for the start-up, which priced its offering at $17 per share late Wednesday, above its expected range of $14 to $16 per share. The company, which is based in San Francisco and trades under the symbol “TRLA” on the New York Stock Exchange, raised $102 million in its initial public offering.

As the housing market begins to show signs of life, investors are warming up to companies like Trulia that focus on real estate. Trulia’s I.P.O. follows last year’s debut of rival Zillow, which wowed Wall Street with a 79 percent pop on the first day pop. Earlier this month, Zillow successfully pursued a second stock offering, raising $172 million, more than in its I.P.O.

Trulia, a real estate information site.Trulia, a real estate information site.

Zillow fell about 1 percent on Thursday morning to $45 per share. However, its shares remains 125 percent above their offering price.

Despite rising enthusiasm for Trulia and Zillow, some analysts have questioned whether their financial results merit such lofty valuations. Trulia, which helps consumers find information on real estate listings and home loans, has yet to record a profit. The company’s revenue nearly doubled in 2011 to $38.5 million, but its loss widened to $6.2 million. In its prospectus, the company also warned that it expects to make significant, future investments to expand its business, which could hamper future profitability.

Article source: http://dealbook.nytimes.com/2012/09/20/trulia-jumps-30-in-debut/?partner=rss&emc=rss

Economic Growth in U.S., Though Still Modest, Speeds Up

Total output grew at an estimated annual rate of 2.5 percent from July to September, still modest but almost double the 1.3 percent rate in the second quarter, the department reported.

The pace, however, wasnot brisk enough to recover the ground lost in the economic bust, lower unemployment or even substantially dispel fears of a second recession. Still, the report offered a small helping of reassurance.

“It ain’t brilliant, but at least it’s heading in the right direction,” said Ian Shepherdson, the chief United States economist for High Frequency Economics, a data analysis firm. “I want to see 4 percent, but given that people were talking about a new recession, I’ll take 2.5 or 3, thanks very much.”

The consensus forecast of economists shows continued growth at about a 2 percent rate for the rest of this year and all of 2012. That would be an improvement over the first half of this year, but a strong recovery would require a rate closer to 4 percent. In the 25 years prior to the recession, the United States economy grew at about 3.25 percent a year, though demographic changes have led to lower expectations for future growth even in a healthy economy.

This economy is still a flurry of mixed signals. Real income has declined, but so has the number of people filing for unemployment, a trend that continued in the number of new claims announced Thursday morning.

The stock market has rallied but consumer confidence has plummeted to levels last seen in 2008. That sentiment helped push pending sales of existing U.S. homes down for a third successive month during September, the National Association of Realtors reported on Thursday.

The economy may be growing, but Americans cannot feel it.

“For most people, they’re unable to really make a distinction between a recession and just 2 percent growth, which means the economy is growing so weakly it can’t hire enough people to make a dent in unemployment,” said Bernard Baumohl, the chief economist for the Economic Outlook Group.

Thursday’s numbers showed a larger than expected increase in consumer spending, fueled by purchases of durable recreational goods like televisions. Personal spending increased by 2.4 percent, accounting for the lion’s share of the growth.

But business investment, which has been strong throughout the recovery, continued to grow as well, with a 13.3 percent increase in non-residential building and a 17.4 percent increase in equipment and software purchases.

Growth in residential construction slowed, but spending on furniture and appliances picked up. Government spending stayed flat, with a reduction in state, local and federal non-military spending canceled out by an increase in defense spending.

The growth rate was weighed down by a meager increase in inventories, which Mr. Shepherdson said he expected would turn out to have been higher than believed. The initial G.D.P. report is based on estimates and is subject to multiple revisions.The growth that economists expected in the first part of the year was dampened by shocks like blizzards, a spike in gasoline prices and the earthquake in Japan, which disrupted the global supply chain. Those effects were fading away by the third quarter, economists said.

But other risks still loom, from Europe’s debt crisis to the possibility that President Obama’s proposal for renewed stimulus measures, including a payroll tax cut, could fail to get through Congress.

“The better growth performance in the third quarter doesn’t mean that the economy can’t ‘double-dip’ back into recession,” wrote Nigel Gault, an economist with IHS Global Insight, ahead of the report. “But it suggests that it has more momentum than there seemed to be just a month or two ago, and underscores that the primary recession risks are from external shocks, with Europe the biggest wild card.”

On the domestic front, analysts seemed to be betting that the payroll tax cut would continue, but were divided on the odds that extended unemployment benefits would be renewed. The two programs together represent spending power equal to about 1 percent of G.D.P., though some of that money may go into savings or be spent on imported goods.

More pessimistic economists fear that the third-quarter growth will be unsustainable because housing values remain low and consumers, whose spending accounts for more than 70 percent of G.D.P., have little reason to expect that their financial situation will improve. The increase in consumer spending was accompanied by a drop in the savings rate and an inching upward of credit card debt, possibly to accommodate purchases that could no longer be delayed.

“That is unlikely to continue if the economy grows weakly because Americans are much more conscious about adding on a lot of debt to their balance sheet,” said Kathy Bostjancic, director for macroeconomic analysis at the Conference Board, which tracks consumer and executive sentiment. The negative outlook was beginning to spread to businesses, Ms. Bostjancic said.

“C.E.O. confidence is starting to melt away, along with consumer confidence levels, which have always been low,” she said.

This article has been revised to reflect the following correction:

Correction: October 27, 2011

An earlier version of this article gave an incorrect name of the company where Nigel Gault works.  It is IHS Global Insight, not HIS Global Insight. 

Article source: http://www.nytimes.com/2011/10/28/business/economy/us-economy-shows-modest-growth.html?partner=rss&emc=rss

Consumer Advocates Abandon Talks on Window Blind Safety

Four consumer advocates said that they would no longer participate in discussions by a task force that was intended to draft new guidelines to make window blinds safer for children.

The four, all of the consumer advocates on the task force, stormed out of talks on Thursday, saying their recommendations were being ignored by the group.

The task force — which has some 30 members including regulators and manufacturers of window blinds as well as the consumer advocates — was created last year at the behest of the Consumer Product Safety Commission to suggest improvements to window blind safety, in lieu of regulations. The task force’s recommendations are due in October. The commission then will decide what action to take, if any.

Roughly one child a month dies by strangling on window blind cords, and consumer advocates on the task force pushed for changes that they contended would eliminate the hazards.

Manufacturers focused on more modest improvements, saying removing all dangers was impossible.

The dispute hit a peak Thursday morning at a meeting in Washington, a day after manufacturers handed over the latest draft of proposed changes to window blinds and coverings.

“It did not fulfill the goals of this process, which was to eliminate the hazard,” said Rachel Weintraub, director of product safety for the Consumer Federation of America and a member of the task force. “Our recommendations were not being listened to, we were being ignored and resisted.”

She also said that research commissioned by manufacturers to help with writing the new guidelines was not made available to the entire task force.

“We could no longer give legitimacy to this process,” she said. The other task force members who left the meeting were Donald L. Mays, senior director of product safety planning and technical administration at Consumers Union; Carol Pollack-Nelson, a former regulator who is now a safety consultant; and Linda Kaiser, the founder of Parents for Window Blind Safety.

Ralph Vasami, executive director of the Window Covering Manufacturers Association, said he was disappointed that the consumer advocates had “abandoned” the process. He said his members were committed to working with regulators to update the guidelines.

“Already great progress has been made,” he said, in a statement. “Our safety standards are the safest in the world and the proposed updates go even further in minimizing potential risk.”

The proposals include more robust performance and testing requirements, the development of new warning labels and technical changes that would “greatly improve safety,” he said.

The impasse means the issue will have to be settled by the Consumer Product Safety Commission, an agency that itself is divided by partisan rifts. Its chairwoman, Inez M. Tenenbaum, previously expressed frustration with blind manufacturers.

“It troubles me greatly that the revisions to the standards for roll-up blinds, Roman shades and other window coverings may fall far short of what I expected,” she said on Thursday. “There are two months left before the window covering industry must meet their deadline and I expect to see proposed standards that are strong and eliminate the risk of strangulation to young children.” For a few decades, window blind makers have tried various design changes and offered tips to minimize the risk that children get tangled in blind cords. Still, the number of strangulation deaths has remained fairly constant. The industry points out, however, that sales have increased.

Some consumer advocates say that easy fixes to the problems are available, like cordless blinds and coverings for cords. But cordless blinds cost more to manufacture and can cost at least twice as much at stores.

Ms. Kaiser, whose 1-year-old daughter was strangled by a window blind cord in 2002, said the manufacturers’ current proposals did not address most of the hazards caused by blinds, like long operating cords and tension devices. “It’s disappointing,” she said. “The majority of strangulation issues are still there.”

Mr. Vasami said his members’ commitment to safety was “unwavering.” “We are constantly re-examining our standards and our education programs to ensure our products are on the leading edge of safety standards.”

Article source: http://feeds.nytimes.com/click.phdo?i=52244ee972cdfce66dfea99338316fc1

Retailers Beat Expectations for June

Sales at stores open at least a year, an indication of retail vibrancy, rose 6.5 percent at 25 stores that had reported results by Thursday morning, according to Thomson Reuters. Analysts had expected an increase of 4.9 percent.

Though the comparable-store increase in April was higher, at 9.0 percent, those numbers are misleading because Easter can fall in March or April, affecting those months’ results. Excluding the Easter months, June’s results were the biggest increase since February 2004, when sales rose 7.0 percent, Thomson Reuters said.

That meant that, instead of complaining about gas prices or a too-hot, too-cold or too-wet June, retailers in a range of sectors reported good news.

“It reflects that despite all the bad news, the consumer still basically feels like they’ve got money in their wallet,” said Al Sambar, a retail strategist at the consulting firm Kurt Salmon.

While discount stores turned in the strongest performance as a sector, with sales rising 9 percent, every sector had positive comparable sales. And the companies with the best results and that beat analyst expectations by the widest margins cater to all sorts of shoppers: Costco, up 14 percent, goes after value-minded shoppers, but also those who have enough to spend on flat-screen TVs and vats of mayonnaise; Saks, where sales rose 11.9 percent, is all about high-priced luxury; Kohl’s and Dillard’s, where sales rose 7.5 percent and 6 percent respectively, go after a midrange shopper with lots of promotions and coupons; Zumiez and Wet Seal, which rose 9.8 percent and 7.3 percent respectively, target teens with mall shops.

June is not a make-or-break month for retailers, which are generally clearing out inventory in anticipation of the back-to-school season.

“June is somewhat of a transition month for retail,” said Michael McNamara, vice president of research and analysis for MasterCard Advisors SpendingPulse, which tracks overall sales. “Some categories are ending one season and getting ready for the next, such as apparel. Other categories are depending more on the summer travel season.”

Discretionary spending seemed to be strong. The SpendingPulse numbers suggested that luxury, jewelry and apparel spending all continued at a brisk pace, and the retailers’ results reflected that.

Kohl’s said that sales of watches and handbags were quite good, for instance, while Saks said that women’s shoes, designer apparel and jewelry were among its best performers, and J.C. Penney also said jewelry had sold well.

Because the shopper seemed to be buoyant, the differences among competitors were getting more pronounced as retailers can no longer blame the economy.

Penney had one of the biggest misses, with its comparable sales results up 2 percent versus analyst expectations of 2.3 percent. The company said that was because of a “softer than anticipated selling environment for J. C. Penney’s moderate customer and the resulting higher level of promotional activity during the quarter.” The company noted that online sales rose 2.2 percent for the month.

Competitors like Macy’s and Kohl’s, though, turned in much stronger results. Kohl’s said home, women’s and children’s products all had big increases. At Macy’s, same-store sales rose 6.7 percent, and Internet sales were up 45 percent in June compared to a year ago, the company said. (The results include both Macy’s and Bloomingdale’s.)

In terms of same-store sales increases, Costco had the biggest jump, at 14 percent. Analysts had expected a 12.7 percent increase. The Limited, driven by Victoria’s Secret, continued to shine, with a 12 percent increase, versus analyst estimates of 3.8 percent. Saks placed third in the comp-sales horse race, with sales rising 11.9 percent, versus analyst estimates of 7 percent.

Analysts said that the back-to-school picture was still hazy. While the strong results in June indicated consumers were happy to shop, many retailers have said they will raise prices around the back-to-school season because of more expensive goods. “The customer, regardless of all this stuff we’re talking about, is price sensitive,” Mr. Sambar said, and retailers did not yet know whether the shoppers would accept higher prices.

Article source: http://feeds.nytimes.com/click.phdo?i=e3fbed79233743bc61d259ad2e59fd22

DealBook: LinkedIn Soars in Market Debut

12:04 p.m. | Updated

Shares of LinkedIn, a professional social network, soared on their market debut on Thursday, feeding a growing investor mania for the latest generation of Internet companies.

The shares opened at $83 and rose as high as $122.70 in late morning trading — well more than double its offering price — on the New York Stock Exchange.

“It’s an exciting day,” Jeff Weiner, LinkedIn’s chief executive said in a phone interview on Thursday morning. “We were able to find investors who understood our story and understood our desire to invest in our platform.”

At more than $80 a share, the company’s valuation is roughly $8 billion, an astonishing figure for a company that was recently valued at about $2.5 billion in the secondary markets.

It is the biggest Internet I.P.O. since Google’s in 2004, and it is a positive sign for the other Internet companies hoping to go public in the next 12 months.

Although LinkedIn is the largest professional online network, the site attracted relatively modest attention before its offering, compared with its high-flying peers, Facebook and Groupon. Facebook, which is widely expected to go public next year, has soared on the secondary markets, with shares trading at an implied valuation as high as $80 billion in recent months.

The valuation of LinkedIn — the first of the big American social media companies to go public — has been surging. In the first week of May, LinkedIn set the target range for its offering at $32 to $35 a share, which valued the company at about $3 billion. Then the company raised the bar 30 percent on Tuesday, to a range of $42 to $45 a share.

Late on Wednesday, the company priced its I.P.O. at $45 a share, at the top end of its forecast. LinkedIn has raised $352.8 million in its offering, but it may raise up to $405 million, if its underwriters decide to sell an additional 1.1 million shares.

As investor enthusiasm soars, analysts are wondering if the valuations for stocks like LinkedIn are grounded in reality.

“Eyebrows are raised around this valuation,” Benjamin Schachter, an analyst with Macquarie Capital, said. “People are trying to figure out how do we value the companies that are coming online?”

According to data from the financial research firm Trefis, the underlying fundamentals do not justify LinkedIn’s rocketing valuation. Based on their analysis of its primary revenue streams — recruiting services, display advertising and subscriptions — the site is worth about $3.2 billion.

“It will be interesting to see how it trades over the next month,” said Cem Ozkaynak, a co-founder of Trefis. “Even though its a professional network, a lot of its business is dependent on growing the number of business clients.”

According to the Trefis report, LinkedIn’s current revenue growth rate will have to pick up substantially in the next five years to justify a valuation north of $4 billion. LinkedIn, which has about 100 million members, has struggled to increase user engagement on its site, an important metric for attracting and retaining recruiters. It is also facing competitive pressure from established job-listing sites like Monster and Careerbuilder, Mr. Ozkaynak said.

“LinkedIn will have to maintain the significant fees it charges to corporate and business customers, while growing its corporate and business customer base significantly from a few thousand customers today to tens of thousands over the next few years,” he wrote in the report.

The site made $243.1 million in 2010, with net income of $15.4 million.

Bank of America Merrill Lynch, JPMorgan Chase and Morgan Stanley led the underwriting of the LinkedIn offering.

Article source: http://dealbook.nytimes.com/2011/05/19/linkedin-soars-in-i-p-o/?partner=rss&emc=rss