Air coming out of social media IPO bubble

Remember earlier this year when we kept reading stories about how social media companies were spawning a glorious new era of Internet IPOs?

It's not quite turning out that way.

Sure, a couple of social media companies -- professional social networking site LinkedIn and Internet radio company Pandora -- went public last spring, with mixed results. LinkedIn shares nearly tripled in their ticker debut in May, while Pandora's IPO one month later was a relative flop.

But that's really about it. Online daily deals site Groupon filed to go public in early June, with social gaming company Zynga following in early July.

Meanwhile, speculation (and shameless hype) persisted about the Big One: Facebook's inevitable public offering. Initially it was believed the IPO would come in the first quarter of next year.

However, Facebook CEO Mark Zuckerberg splashed cold water all over that hope two weeks ago when he said the public offering will be delayed until next September because he doesn't want employees distracted by all that money they'll suddenly have. (Zuckerberg apparently believes only he can maintain a laser-like focus on work while being wealthy.)

While Facebook is in IPO limbo, Groupon has descended into IPO hell. The company has been forced by the Securities and Exchange Commission to drastically reduce its reported revenue, two COOs have left since March, and it recently had to cancel an IPO road show. It's fair to wonder not only if Groupon will ever go public, but whether the money-bleeding, executive-losing company can survive.

Which leaves Zynga as the only real hope for an honest-to-goodness social media IPO this year. Alas, the gaming company just announced a 95% reduction in sequential quarterly profits, with net income plunging to $1.3 million in the three months ended June 30 from $27.2 million in the previous quarter.

Zynga is offering up many excuses reasons for the drop in profit -- a gap in major game launches, increased growth-fueled spending and Facebook now requiring game developers to give it 30% of revenue.

None of that is going to make the road show any more comfortable for Zynga executives and the company's IPO underwriters.

They just don't make Internet IPO bubbles like they used to.