Discount website Groupon Inc., game developer Zynga Inc. and planned Expedia (EXPE) spin-off TripAdvisor Inc. all have chosen in the last two weeks to list shares on the Nasdaq Stock Market, handing the electronic marketplace some big wins -- after some major losses -- in the closely watched social-media sector.
Battles for these listings have included some of the hardest fought between the exchanges to date and give Nasdaq some breathing room against the Big Board, which earlier this year lured networking site LinkedIn Corp. (LNKD), internet radio company Pandora Media Inc. (P) and Chinese social networking site Renren Inc. (RENN). Nasdaq won the listing of real estate site Zillow Inc. (Z) and on Monday was picked by Jive Software Inc., which filed plans to go public in August.
Both NYSE and Nasdaq have revved up efforts to lure web- and mobile-based businesses this year as they position for the next round of social media flotations, which could include Angie's List, LivingSocial, Twitter and, the crown jewel, Facebook Inc.
"There's a momentum associated with social media companies, and there's a compounding effect for the exchange," said Jason Frankl, senior managing director and head of the listing advisory services group at FTI Consulting. "You don't just get the notoriety and the listing fees. You get data fees, a piece of the transaction fees. Your business model is dependent on first getting the listing and then the revenues."
The courtship of Groupon, initiated last spring, drew the chief executives of both exchange groups to the daily deals website's home base of Chicago. NYSE's Duncan Niederauer and Nasdaq OMX's Bob Greifeld both personally pitched their markets in June, according to people familiar with the matter.
The exchange operators outlined a slew of promotions and cobranding with other companies listed on their markets. Nasdaq secured victory by agreeing to raise visibility of Groupon's discount offers across a range of media, including the 72-foot billboard on its MarketSite in New York's Times Square, according to people familiar with the matter.
Nasdaq is seeking to bounce back after watching the Big Board outpace it in initial public offerings and listings transfers over the past two years.
Since January 2010, the NYSE and its Amex platform have landed nearly 130 IPOs worth $57 billion, according to Dealogic data, not counting special categories like real-estate investment trusts or closed-end funds. The comparable Nasdaq figures are nearly 110 flotations worth about $15 billion. Nasdaq also had 21 "best effort" deals with proceeds of $1 billion.
Meanwhile, NYSE has come out ahead in the battle for companies that are already listed. Level 3 Communications Inc. (LVLT) and Imax Corp. (IMAX) are two of nine listings to transfer away from Nasdaq to the NYSE this year, versus Nasdaq's win of one company from the Amex and another that spun off from NYSE-listed Cablevision Systems Corp. (CVC).
2010 also leaned to NYSE, following a 2009 when Nasdaq cleaned up, grabbing telecom behemoth Vodafone Group PLC (VOD) and taking more NYSE listings than it lost.
"We're going to continue to be very aggressive and we're going to put up wins. We're not going to win every single deal," said Scott Cutler, NYSE Euronext executive vice president. "The market for IPOs is [more than] Groupon and Zynga and two other social media deals."
Neither company was about to predict that they're ready to land Facebook, the most coveted of the social-media companies.
"At the end of the day, I'm sure Facebook will speak with both of us before they make a final decision," said Bob McCooey, senior vice president at Nasdaq OMX Corporate Client Group. "We certainly think that the continued success of Nasdaq in technology and specifically in the social media space helps."
Both companies are also looking to keep momentum as a new competitor, Kansas City-based BATS Global Markets, prepares to enter the fray in December with a low-cost offering that will offer free listings to companies that abandon their existing exchange for the six-year-old electronic platform.
-By Brendan Conway and Jacob Bunge
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