The Internet world is being transformed by a number of powerful forces, three of which stand out: technological progress, a new breed of rich investors and Chinese Internet firms. Technology makes it faster and easier to grow a business, and web companies, of which we have already blogged, are the current trend: initial public offerings (IPOs) of Internet start-ups are springing up everywhere.

In May 2011, LinkedIn, a social network for professionals, was floated on the New York Stock Exchange (NYSE) and was valued at $8.8 billion—572 times its profits in 2010—at the end of the first day of trading.

On 16 December 2011, shares in Zynga, maker of “FarmVille”, “CastleVille” and other online games, entered the Nasdaq, priced at $10 each. After trading started, the shares briefly rose to $11.50 before going down below the IPO price, giving the firm a market capitalisation of about $7 billion. The company boasts 227m monthly active players of its games, and 54m daily users, most of whom play via Facebook.