Quick cooling of hot stock market debuts by Internet darlings such as Groupon has fed fears of another speculative bubble as social networking star Facebook prepares to go public.

Local bargain community Groupon, professional social network LinkedIn and consumer reviews website Angie's List each saw stock prices leap during initial public offerings (IPOs) this year.

But share prices in each company are now near or below where they were when the up-and-coming firms debuted on the trading floor.

"We are going to hit a bubble again... The question is, are we in a bubble or are we just in the early stages?" said analyst Lou Kerner of institutional investment firm Liquidnet.

The current infatuation with new technology firms reminds Kerner and others of the frenzied investor speculation during the 1994-1999 Internet boom, which ended with a historic bubble burst.

"Groupon really highlights the difficulty in pricing shares of a company with a business model in its infancy," Kerner said.

"It's a black eye to the banks (that championed the market debut) and to the company for going to the IPO altar when there was no reason to do that."

As with the legendary dot-com boom, investors enthralled by new technology are driving the values of such firms, according to the analyst.

Today's sweethearts are social media firms that leverage the power of relationships in online communities.

"What you are seeing is very much a repeat of the 1994-1999 time period," Kerner said.

"Valuations climbed for a long time, eventually reaching bubble proportions... Now investors are nervous, wondering what stage of this wave we are at... It is our view that we're still in the early innings."

There is no reason for panic regarding Facebook, which is rumored to be considering an IPO as soon as April, according to the analyst.

Facebook is more mature than Groupon and "in a class by itself" in the way that Google and Amazon were when they debuted in the stock market, Kerner said.

He considered plausible the Facebook valuation of $100 billion proposed in media reports.

Other analysts noted that fledgling Internet firms in the stock market could see share prices suffer due to broader market factors that prompt investors to seek shelter in companies with longer track records.

"IPOs are inherently more risky than stocks that have longer trading history," said Lise Buyer, founder of Class V Group, which specializes in IPO strategies for companies.

"When the market is volatile, as it has been lately, investors often sell their small, riskier positions first."

LinkedIn share prices may have been swayed by basic supply and demand, as the company offered relatively few shares at its IPO and then last week opted to sell more, sending the price down, Buyer said.

Speculators out for fast profit instead of a long-term investment could have driven Groupon and Angie's List stock prices down by selling when shares began falling.

"I think a lot of those investors were looking at them as a quick trade on a hot IPO," said Nick Einhorn of Renaissance Capital, a firm specializing in entries to the stock market.

"When the stock began falling, a lot of those investors would have looked to get out, thus accelerating the selling pressure," he said.

"In general, if an IPO falls below its IPO price investors view this as a negative signal and often look to dump shares."

Groupon shares were trading at $16 on the NASDAQ late Tuesday after its IPO at $20. Angie's List shares sank to $11.50 in after-hours trading that was below the IPO price of $13.

LinkedIn traded at a share price of $58.79, higher than its stock market debut at $45 but below a mid-July peak of $109.97.

Facebook settles US privacy violation charges
Washington (AFP) Nov 29, 2011 - Facebook has agreed to tighten its privacy policies and submit to external audits in order to settle charges that it abused users' personal data, US authorities said Tuesday.

In a deal with the Federal Trade Commission, the social networking giant promised to honor users' privacy preferences and to stop making claims about the security of personal information that are untrue.

The deal settles two-year-old accusations that Facebook -- which has some 800 million users -- had allowed advertisers access to users' personal data when users were told it was being kept private.

"The proposed settlement requires Facebook to take several steps to make sure it lives up to its promises in the future," the FTC said in a statement.

That includes giving consumers "clear and prominent notice and obtaining consumers' express consent before their information is shared beyond the privacy settings they have established."

Facebook did not admit guilt and was not fined in the case, which arose from an investigation by privacy groups in December 2009 that it had deceived users over the protection of their personal data -- such as their name, age, location, gender and friends -- when it changed its privacy settings.

The FTC said Facebook had deceived users in several ways: promising it would not share personal data with advertisers and then doing so; saying that third party apps had limited access to personal data when they had full access; and making public data users specifically chose to remain private.

Facebook was barred from "making any further deceptive privacy claims" and ordered to regularly undergo a third party audit over the next 20 years to ensure it is keeping its promises.

It also must shut down all access to accounts deleted by customers in 30 days or less -- an issue many users have become focused on as employers often try to access potential employees' Facebook pages to find out more about them.

Facebook founder and chief executive Mark Zuckerberg said in a statement to users on the official Facebook Blog page that the company had already implemented many of the promises in the FTC settlement.

"I'm the first to admit that we've made a bunch of mistakes," he wrote.

"I also understand that many people are just naturally skeptical of what it means for hundreds of millions of people to share so much personal information online, especially using any one service."

"We're making a clear and formal long-term commitment to do the things we've always tried to do and planned to keep doing -- giving you tools to control who can see your information and then making sure only those people you intend can see it."

He meanwhile announced two new chief privacy officer positions in the company to "ensure that privacy control is built into our products and policies."

Chris Conley, an attorney with the American Civil Liberties Union, which has pressed Facebook since 2009 over privacy issues, called the settlement "an important step."

"But to keep pace with new technology, we also need new laws and tools... and comprehensive privacy legislation to help us safeguard our own personal information," he said in a statement.

"We shouldn't have to struggle with complicated and constantly shifting privacy settings just to keep control of our own personal information."

But the Computer & Communications Industry Association said the 20-year oversight provision in the settlement was "unnecessarily long."

"If more extensive regulation of the Internet privacy world is the intent, we would hope to get there through a transparent process rather than a series of potentially ever-expanding consent decrees," the industry association said in a statement.

Democratic Senator Jay Rockefeller applauded the deal but called for more privacy legislation.

"Consumer privacy is a right, not a luxury... Ultimately, I believe legislation is needed that empowers consumers to protect their personal information from companies surreptitiously collecting and using that personal information for profit."

The settlement clears up one issue that could have clouded Facebook's launch on the stock exchange, which might come as early as April 2012.

The Wall Street Journal said preparations are under way for an initial public offering during the April-June quarter that would raise $10 billion and value the company at more than $100 billion.