LinkedIn, Pandora, Groupon, and Zynga are all big names on the modern web, and each has filed with the SEC to hold an IPO. But who are these giants? What do they do, and where do their profits come from.

www.linkedin.com

LinkedIn is the social network for business professionals. When users join they create a profile that summarizes their experiences and accomplishments. According to the LinkedIn website, it has more than 80 million members spread throughout 200 countries. However, unlike most social media platforms, members must know each other or receive an introduction from a mutual acquaintance in order to correspond. This gated access approach is designed to help build trust among LinkedIn’s users, as you will only be introduced to someone new if one of your existing business acquaintances is willing to vouch for them.

While a basic account is free and subject to only minimal advertising, LinkedIn also generates income by selling year-long premium accounts that come with additional features.

Based on current venture capital funding, LinkedIn is valued at somewhere around $2.5 billion.

www.pandora.com

Pandora is a major player in the online music world, and the first to go public since Napster’s legal troubles twelve years ago. The system relies upon the Music Genome Project to identify common properties in the songs that individual listeners enjoy, and builds custom playlists based upon those preferences. [Listen to Aaron's Pandora soundtrack]

86% of the company’s revenues come from the advertisements shown to free 40-hour per month account holders, while the remaining 14% comes from subscriptions to the unlimited streaming service.

www.groupon.com

Groupon is part of a growing trend of online coupon distributors who leverage social media to qualify groups of clients for bulk discounts at regional vendors. The service suffered a PR black eye when FTP took advantage of a loophole in the system to offer a faux-discount for Valentine’s Day, but on the whole the service has received good reviews.

Based on current venture capital funding, Groupon is valued at somewhere around $250 million, but there have been reports that both Yahoo! and Google have considered buying the startup for closer to $3 billion.

www.zynga.com

Zynga is the maker of FarmVille and MafiaWars, two of the biggest games on Facebook. The company has also made a name for itself by donating a portion of all its revenues to non-profits around the globe. The Zynga formula of animated characters interacting with virtual environments maintained by players and their online friends has become a mainstay of the social gaming genre.
Like most such games, players can pay real money or take part in lead generation programs in order to gain virtual currency only usable for in-game purchases.

Zynga hopes to make $500 million with this IPO, which it will reach if they have correctly valued themselves at $10 billion.