Social media giants Facebook, LinkedIn, and Twitter all draw revenue from their sizable user bases – but how much is each user worth?
Looking at the half-year financial data from the social media houses, there’s no doubt that any platform can quite reach the scale of Facebook – in both user base and numbers.
With over 1.32 billion monthly active users, Mark Zuckerberg’s social media powerhouse drew in US$5.4 billion in revenue in the first six months of 2014.
Revenues were bolstered by its mobile advertising business, which accelerated in the first three months of the year, helping the company top investors’ financial targets.
The group’s market capitalisation currently sits just under $190 billion – giving it a per-user value of US$143.51.
Company value per user
|1,320 million||$189.44 billion||$143.51||R1,589.04|
|271 million||$30.75 billion||$113.46||R1,256.31|
|313.4 million||$24.53 billion||$78.27||R866.66|
The strong results from Facebook have put the company at the top of the pile in both per-user value as well as average revenue per user (ARPU) – a position held by professional social network LinkedIn in 2013.
Compared to the same period in 2013, LinkedIn’s market cap has sunk (from US$28.9 billion in 2013), pushing it below Twitter, which was just about to list on the New York Stock Exchange at the time.
Investors estimated Twitter’s listing valuation to be around $15 billion (a PUV of US$68.71) – however, the platform debuted at US$25 billion, and now has a market cap of US$30.75 billion.
Average revenue per user
Company value and revenue tell different stories, however.
Facebook’s 6-month revenue increased by over 65% in the past year (from US$3.27 billion) – pushing its ARPU up to US$4.10.
Twitter managed to more than double its revenue, increasing it by 122% to US$562.6 million in the period.
With a user increase to 271 million, this means that Twitter’s ARPU increased to over US$2.00 – though it remains the lowest of the listed social media companies.
Even though LinkedIn’s market capitalisation dropped in the past 12 months, combined revenue over the first two quarters of the year pushed past US$1 billion, giving the company an ARPU of US$3.21 – up from US$2.89 in 2013.
Revenue per user
|Company||Users||Revenue (first 6 months of 2014)
|1,320 million||$5,412 million||$4.10||R45.40|
|313.4 million||$1,007 million||$3.21||R35.54|
|271 million||$562.6 million||$2.07||R22.92|
When looking at actual profits, however, there’s a different story entirely.
Of the three companies, Facebook was the only one to make an actual profit (based on GAAP earnings).
Facebook’s net income was reported at US$1.4 billion for the period (US$1.9 billion non-GAAP), meaning it made a profit of US$1.08 per user.
While LinkedIn and Twitter both made non-GAAP profits of US$110.3 million and US$14.78 million respectively, both companies reported GAAP losses.
GAAP (generally accepted accounting principles) reporting includes the explicit costs of doing business, such as depreciation, interest, and taxes, while non-GAAP reporting is adjusted to reflect nonrecurring items.
Profit (Loss) per user
|Company||Users||Net profit (GAAP)
|1,320 million||$1,433 million||$1.08||R11.96|
|313.4 million||($14.3 million)||($0.04)||(R0.44)|
|271 million||($277 million)||($1.02)||(R11.29)|