As social media networks are booming ever since the late nineties with social media giants like Facebook counting billions of users across the globe, this online social phenomenon has slowly become a great part of our everyday lives.
Moreover, these social media startups soon turned into multi-billion corporations, turning a massive userbase into billions in revenue, which very soon attracted great interest from investors focused on social media stocks.
Companies like Twitter, Facebook, and YouTube have found a way to attract these massive userbases, while the revenue was mostly driven by advertisements as these companies’ services are free, and “always will be”, as Facebook says.
Despite massive success in the market, there are still some regulatory uncertainties tied to some of these social media giants, so how profitable is investing in social media stocks?
How Profitable is Investing in Social Media Companies
Despite the fact that Facebook was involved in a drama revolving around selling users’ data to third party companies, while EU imposed regulations that made the company ask users in the European Union whether they are allowed to use the information they need also legally bound to explain for what and how this data is used, interest that investors have in social media doesn’t seem to be declining.
During 2017, Facebook reported 499 billion dollars in revenue, with Twitter weighing 13 billion dollars within the same time period, with great odds of showing further progress in the growth rate.
Both companies are also showing immense progress a year later as well, as Twitter is recording 650 million dollars in revenue growth through advertising, and with Facebook reporting 33% of growth in revenues during 2018 with 13.37 billion dollars, we might see a difference between the two social media giants if we add the fact that Facebook missed its estimates by 40 million dollars for the year.
Facebook stocks might have seen a decline after the data selling drama, however, this social media giant is still attracting users with finding new ways to keep them returning aside from making excessive profits from advertising.