LinkedIn Corp., a website for professionals to connect, may be the first company to quench investor thirst for the red-hot social networking market.

The Mountain View, Calif., company has been quietly preparing an initial public offering for as early as the first three months of this year.

LinkedIn has hired investment bankers Bank of America Merrill Lynch, Morgan Stanley and JPMorgan Chase to advise it after a round of interviews in November. The size of the offering is not known, but it is expected to be small relative to the company's value. LinkedIn's implied value on the private trading marketplace SharesPost is $2.2 billion.

Tapping the public markets could be a smart play for LinkedIn, which could benefit from heightened investor interest in social media, and could help it get out in front of a blockbuster Facebook Inc. IPO expected in 2012.

"LinkedIn has its own story to tell, and this gives them a window to get out there and tell that story," said BGC Partners analyst Colin Gillis. "Even though the business models are different, it's wise for LinkedIn to get out there and avoid getting lost in the Facebook noise."

LinkedIn declined to comment on the speculation.

"An IPO is one of many tactics that we could choose to pursue," a spokesman said. "We are focused on building our business and doing what is in the best long-term interest of LinkedIn members and shareholders."

LinkedIn, which connects more than 85 million professionals on its site and has more than 1,000 employees, may not have the explosive growth of Facebook. But it is one of the first social media websites to become profitable, making money from premium services and advertising.

LinkedIn does not disclose financial results, but analysts' estimates put 2010 revenue at about $200 million.

LinkedIn is the brainchild of former PayPal Inc. executive and early Facebook backer Reid Hoffman, a successful Silicon Valley entrepreneur and investor who helped usher in the social networking boom.

LinkedIn has raised more than $100 million in venture capital from such investors as Sequoia Capital, which backed Apple Inc.; Google Inc.; and Oracle Corp. Other investors include Greylock Partners, Bessemer Venture Partners and Goldman, Sachs & Co.

It's no secret that LinkedIn has been planning an IPO, but LinkedIn Chief Executive Jeff Weiner ducked the issue in a November interview. Weiner, a former Yahoo Inc. executive, joined LinkedIn in December 2008 and became CEO in June 2009.

"You don't necessarily have to go public to get to the next level," he said two months ago.

But an IPO could be a springboard to accelerate the site's growth in the United States and overseas. LinkedIn has added 30 million users in the last 12 months alone.

"We believe LinkedIn is growing rapidly, in terms of membership, engagement and revenue, and the market would be very accommodating," Wedbush Securities analyst Lou Kerner said.

A lot of money already is chasing pre-IPO technology companies, such as Facebook, Twitter Inc. and LinkedIn on the secondary markets. Investors, frustrated by a dearth of big-name technology IPOs during the recession, are plunking down cash to buy shares in these companies on private stock exchanges for wealthy investors.

Investment houses also have set up funds through which investors can buy shares in privately held companies. The surge in trading has sent valuations skyrocketing, drawing the scrutiny of the Securities and Exchange Commission.

The anticipation of a Facebook IPO is similar to the frenzy surrounding the 2004 initial public offering of Google, the world's most popular search engine.

Goldman Sachs offered Facebook shares this week to its high-net-worth clients after joining with Russian investment firm Digital Sky Technologies to pump $500 million into the Palo Alto company. The offering was quickly oversubscribed.

"Investors are looking for smaller, high-growth Internet companies," TCW Group media analyst Anthony Valencia said. "There have been a dearth of those going public over the last couple of years. That trend could continue this year. So that could be a sweet spot for LinkedIn to do an IPO."

Ken Marlin, managing partner of Marlin and Associates, a New York boutique investment bank, said the big pools of available investment cash plus rising interest in and valuations for Facebook would benefit LinkedIn, whether it raises more private money or taps the public markets.

"The best thing that can happen to a good restaurant is to have another good restaurant open up next door to it," Marlin said. "It doesn't take away from the restaurant, it just brings more people to the neighborhood."

jessica.guynn@latimes.com