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How much is the average social networking company worth?
FINDINGS
There are over 60 different social media sites, but many have not been valued publicly because they are private companies. Facebook is the clear front-runner, being valued at over $500 billion, however, since most companies have not been valued, We decided to use revenues to provide you with an approximate size of a social media company. Using these proxy, the average revenue of a social media company is $2.4 billion. This number is derived by taking 62 social media companies for which we were able to find exact or estimated revenues, adding the revenues together, and dividing by 62. You will find the 62 companies we used to calculate this average on the attached spreadsheet. We understand that revenue is not the same as value, but again, very few social media companies have published their valuation. We were able to find valuations of eight major social media sites, which you will find below. Excluding Facebook and YouTube, which are outliers in terms of value, the average value of the six sites for which we have data is $18 billion.
There are only 4 other companies in the world worth $500 billion or more and those are Apple, Google, Microsoft, and Amazon. In addition, Facebook owns Instagram.
Analysts interviewed by Inc.com said that someone would be foolish to pay over $10 billion for the company. They are currently partnering with Bloomberg and the NBA for live video content. This may be a big payoff for them.
In 2012, Facebook purchased Instagram for $1 billion. The company went from 30 million users to now over 310 million users. The Forbes article estimates net worth between $25 and $50 billion in 2016, which relates to the Citigroup estimate. They estimate both 2017 and 2018 numbers and dollars to triple and then triple again. Please note the sources used for this valuation are slightly out-of-date, but represent the most current information available.
SNAPCHAT
In the first quarter 2017, Snapchat had a loss of $2.2 billion. Their current focus is more on engagement and not so much on user growth.
SKYPE
5) Skype- Microsoft bought them for $8.5 billion in 2013, although its revenue was only at $800 million. However, in the 10 years since Microsoft's purchase, users have nearly doubled and their revenue is up to $2 billion. Please note the sources used for this valuation are slightly out-of-date, but represent the most current data available.
Pinterest still hasn't gone public, although there were rumors it would happen in 2017. They have hired a CFO though, so it may be a sign of what is to come.
While there was a question that Microsoft paid too much for LinkedIn, the verdict is not in yet. They have been boosting their advertising platform, which should help with valuation.
YOUTUBE
8) YouTube- $90 billion (estimated on Social Media Today) This company is owned by Google. They purchased it for $1 billion about 10 years ago. Their current revenue is about $12 billion per year and due to the rising nature of live video content, this should help their bottom line.
CONCLUSION
In summary, social networking sites are becoming quite popular and there are many of them. The top social networking platform is Facebook. It is valued at $500 billion, which is nearly five times more than its nearest competitor. YouTube, Instagram, Snapchat, and Twitter are its closest competitors. Not taking into account the large market value of Facebook and YouTube, the average social networking company is valued at $18 billion, but this value is likely high due to lack of valuation data on the majority of social media companies. The estimated average revenue of a social media company is $2.4 billion.