Social media companies have revolutionized the way we connect on the internet, and they have had an equally dramatic effect on the way we invest our money. With Facebook (NASDAQ:FB) commanding a market capitalization of $386.16 billion, social media companies are some of the most powerful influences on the market.
Web traffic data company Alexa publishes the Top 500 Global Sites, featuring companies from Ebay (NASDAQ:EBAY) to Bloomberg. Statistics are calculated by the average numbers of daily visitors and page views. As of January 2017, social media companies have a strong presence on this list, with eight breaking into the top twenty, and even more if you count the Indian and Japanese versions of some sites. It is highly significant that a list profiling the top sites around the globe features social media companies so heavily, at around half of the top twenty. This article profiles the five major public companies in social media investing, revealing why they are so exciting to both consumers and investors.
The first most visited site in the world is Google. This makes sense; many people have the search engine as their homepage on their computers, guaranteeing a certain amount of hits each day. In terms of social media, their Google+ social network is a Facebook rival that never really took off.
Their corner of the social media market does look a little happier when considering their subsidiary, YouTube, the second most visited site in the world, purchased for $1.65 billion in 2006. YouTube was established in Spring 2005 when the world’s first YouTube video was uploaded. Over a decade later, YouTube has more than 1 billion users, who generate billions of views each month. Indeed this number has grown by 50 percent year over year. The way people watch YouTube is also changing, as half of YouTube views are now on mobile devices. The company’s primary source of income is ad sales on its homepage, search results pages and within video. Advertising revenue is increasing; the amount of channels earning six figures per year is up 50 percent year over year.
The third most visited website in the world, Facebook dominates social media investing. Based out of Menlo Park, California, Facebook’s mission statement emphasizes the company’s focus on sharing between friends as a means of connecting the world. Facebook has 15,724 employees. Their third quarter 2016 results saw a net profit margin of 45 percent, up on the year before of 32 percent. “We’re making progress putting video first across our apps” Mark Zuckerberg said in the earnings release.
At number 15 is VK, which is basically Russian Facebook. The site sees healthy engagement, with 2.6 billion total visits in the last six months, and is most popular in Russia, followed by Ukraine and Belarus.
Facebook bought Instagram in 2012; the latter is currently listed at number 17 on Alexa. Instagram has more than 500 million monthly active users, called Instagrammers.
Coming in at number 5, Yahoo’s assets include the online photo management and sharing application, Flickr, and the blog Tumblr. Soon to be sold to Verizon, this technically won’t be on this list for long.
At number 16, Twitter is a real-time conversation platform, designed for self-expression and conversation. Its advertising revenue is primarily generated from three promoted products: Promoted Tweets, Promoted Accounts, and Promoted Trends. Twitter has seen a fairly steady increase in monthly active users. In the third quarter of 2016, Twitter had 317 million active users. As of January 2017, its market capital is $11.94 billion. Twitter has struggled to find someone to acquire the company.
LinkedIn is a professional network that connects 467 million members across the world. The platform enables users to develop professional identities, connect with co-workers and peers, and to engage in professional networks spanning 200 countries and territories. Revenue is generated across LinkedIn’s three product lines: Talent Solutions, Marketing Solutions, and Premium Subscriptions. With over 10,000 employees, CEO Jeff Weiner leads a $26.24 billion company. Their third quarter 2016 results saw total revenue increase 23 percent year-over-year to $960 million. LinkedIn maintains a strong combination of daily visitors and page views, making it one of the most visible options for social media investing. They were recently bought by Microsoft.
It would be helpful for investors to see how their investment portfolios compare to this social media stock list. M&A activity spells shifting sands for investing, so be sure to check back to see how LinkedIn fare with Microsoft, how Yahoo become Altaba, as well as Twitter’s fate.
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This is an updated version of an article first published on Mobile Web Investing News on July 3, 2015.
Securities Disclosure: I, Emma Harwood, hold no direct investment interest in any company mentioned in this article.