By Irene Klotz

CAPE CANAVERAL, Florida |
Mon Jul 11, 2011 3:03am EDT

SAN FRANCISCO – Investors are clamoring to connect with the online networking service LinkedIn Corp. in the latest sign of the fervor for Internet companies that specialize in bringing together people with common interests.

The demand to buy a piece of LinkedIn is so intense that the 8-year-old company is expected to make its stock market debut Thursday with a value of at least $4 billion. That would make LinkedIn's initial public offering of stock the biggest by a U.S. Internet company since Google Inc. went public in 2004, according to the research firm Renaissance Capital.

The appetite for LinkedIn's IPO encouraged the company's bankers to raise the asking price by about 30 percent Tuesday to $42 to $45 per share. It won't be surprising if the IPO is priced even higher Wednesday evening and then sells for more than that Thursday morning when they are expected to begin trading on the New York Stock Exchange under the symbol "LNKD."

The IPO is expected to raise about $200 million for LinkedIn and produce $125 million to $135 million for existing stockholders, who plan to sell some of their shares. The biggest winner will be LinkedIn's co-founder and chairman, Reid Hoffman, whose 20 percent stake in the company will be worth more than $800 million.

The coming-out party on Wall Street for LinkedIn, which focuses on connecting professionals online, could be the prelude to even more excitement if several popular Internet companies decide to go public during the next year. The list of candidates includes the online messaging service Twitter, online game maker Zynga, online coupon service Groupon and the biggest social network of all, Facebook.

"LinkedIn will be used very heavily as a modeling tool for other companies in this space," predicted David Menlow, founder of research firm IPO Financial. "The pricing is going to have a dramatic effect. This is just the starting point for valuation adjustments."

Facebook is the most prized among the Internet companies still awaiting an IPO. It was valued at $50 billion as part of an investment organized in January by Goldman Sachs Group Inc., a major shareholder in LinkedIn. If Goldman Sachs follows through on its plan to sell its entire LinkedIn stake in the upcoming IPO, the bank would receive about $38 million at the mid-point of the targeted price range.

LinkedIn, based just down the street from Google's Mountain View, Calif. headquarters, has become profitable by building a website that acts both as a Rolodex and a hiring center.

People set up LinkedIn accounts to post the resume on a page and connect with current and past colleagues. LinkedIn members can then ask the people they know to introduce them to other connections that might help further their careers.

Although not nearly as popular as hanging out on Facebook, LinkedIn has emerged as a widely used directory. Through March, it had 102 million members and is adding another million each week.

The company gets about two-thirds of its revenue from fees that it charges for greater access to the website and more data about the expertise listed on each member's page. Businesses and job headhunters use LinkedIn to recruit people who might not even be looking for a job at the time. LinkedIn also has made money from business surveys of its members and a service that offer career advice to college graduates.

The rest of LinkedIn's revenue comes from Internet ads, which serve as the financial backbone for Google, Facebook and many other Internet companies.

The lofty appraisals being given LinkedIn and other online networking companies have raised worries of an investment meltdown if the businesses don't turn out to be as successful as enthusiastic investors anticipated.

That is what happened in the late 1990s when hundreds of unprofitable Internet companies attracted billions in venture capital and then went public to much fanfare. That led to a devastating collapse that still haunts Internet investors.

The big difference this time is that the current Internet darlings haven't rushed to the public markets. Instead, they are waiting until they have developed ways to make money while amassing massive audiences.

"These are serious businesses with huge global market opportunities ahead of them," said John O'Farrell, a partner with Andreessen Horowitz, a venture capital firm that owns stakes in Facebook, Twitter, Zynga and Groupon. "To an uninformed person, the valuations may look like a bubble, but we believe they will in fact prove to be very low valuations."

Last year, LinkedIn earned $3.4 million on revenue of $243 million. Its growth accelerated during the first three months of 2011, putting it on a pace to generate $500 million in revenue this year. Management, though, has warned that the company might lose money this year as it invests in more products and more computers to run its website as it tries to ward off competitive threats overseas.

If LinkedIn's IPO is priced at the mid-range target of $43.50 per share, the company would have a market value of $4.1 billion — about 17 times its 2010 revenue. By comparison, Google's current market value of $170 billion is less than six times its revenue last year. When Google went public, though, its market value of $24 billion was 16 times higher than its revenue from the previous year.

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AP Business Writer Tali Arbel in New York contributed to this story.

MOSCOW – Russia risks losing its edge in space by relying exclusively on Soviet-era achievements and doing little to design new spacecraft, a Russian cosmonaut warned Monday as the nation marked the 50th anniversary of the first human spaceflight by Yuri Gagarin.

Svetlana Savitskaya, who flew two space missions in 1982 and 1984 and became the first woman to make a spacewalk, harshly criticized the Kremlin for paying little attention to achievements in space after the 1991 collapse of the Soviet Union.

"There's nothing new to be proud of in the last 20 years," said Savitskaya, a member of Russian parliament from the Communist Party.

While Russian's aging spacecraft will serve as the only link to the International Space Station after the U.S. space shuttle Atlantis closes out the U.S. program this summer, the Americans are working on a next-generation space ship and Russia has done virtually nothing to design a replacement to the 43-year old Soyuz spacecraft, Savitskaya said.

"If we won't be catching up on what we have missed in the last 20 years ... we will be left with nothing," Savitskaya told a news conference.

Space officials and astronauts from around the world arrived in Moscow to pay tributes to Gagarin, whose 108-minute flight on April 12, 1961 spurred America to race for the moon.

"We are all the sons of Yuri Gagarin," Jean-Jacques Dordain, the director of the European Space Agency, said at a Gagarin commemorative event.

"Without Gagarin going first, I probably wouldn't have gone to the moon," said Thomas Stafford, commander of the Apollo 10 mission that approached within eight miles (13 kilometers) of the moon in May 1969, the last U.S. mission before the U.S. moon landing three months later.

Before Gagarin's flight, many scientists were worried that humans wouldn't be able to survive in outer space.

"Some psychologists and other scientists said that a man could go mad when he is left to face the endless universe," said Boris Chertok, who was a deputy of Sergei Korolyov, the father of the Soviet space program.

Technological challenges also looked daunting after numerous equipment failures in experimental missions preceding Gagarin's flight. "We realized that the risks were very high," Chertok told reporters last week.

Chertok, 99, said the Soviet design team did all they could to minimize risks, but admitted that they still were too high by modern standards. He said he wouldn't have signed papers clearing the flight if it were to happen today.

Oleg Ivanovsky, who oversaw the construction and launch of the Vostok spacecraft that carried Gagarin, told The Associated Press that a risk assessment study put the odds of success of Gagarin's mission at only 50 percent.

The Soviet authorities had prepared several versions of the communique telling the world about the flight: one in case of success, another one in case of problems that could lead to Gagarin's landing in another country and a third one in case of a complete failure, said Vitaly Davydov, a deputy chief of the Russian space agency.

The Soviets were so obsessed about secrecy that they even lied about the location of launch pad used to send Gagarin's rocket into space, even though U.S. spy planes had photographed it a long time before.

"The government report didn't say where Gagarin was launched from and what rocket he was riding, and it also concealed details of his return," Chertok said. "The secrecy was excessive."

While Gagarin's smiling face made him a poster boy for the communist world, scientists behind the mission remained anonymous, with even their names being a top state secret. To the scientists' dismay, Soviet authorities made people with no relation to the space program claim public credit for Gagarin's mission.

"It was quite painful for us to see that," Chertok said.

A similar veil of secrecy surrounded Gagarin's death in a two-seater training jet crash on March 27, 1968, spurring conspiracy theories about the KGB staging it to punish him for his alleged opposition to the Communist regime.

An official panel has concluded that Gagarin's plane crashed after making a sharp maneuver to dodge an air balloon or avoid thick clouds, but many cosmonauts and technical experts have remained skeptical of the verdict.

Cosmonaut Vladimir Shatalov, who closely knew Gagarin and was to follow Gagarin on a training flight on the day of his death, told the AP that the most likely reason for the crash was another military jet flying too close by at high speed.

A turbulence or a shock wave from that plane crossing the sound barrier could have shattered Gagarin's plane cockpit and knocked him and his crewmate unconscious as their MiG-15 fell into a steep dive and slammed into a forest.

The official probe didn't seriously investigate that possible version of events, most likely because air force officials weren't interested in finding any truth that could have cost them their jobs, Shatalov said.