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Investing news: The best social media companies of 2014 have managed to nab millions of users and make significant revenue. They have revolutionized the way we communicate, distribute information, and even think.
Most social media services are available for free, which means these firms rely on advertising revenue to make money.
Here is a list of the best social media companies of 2014 by revenue…
Some of the Best Social Media Companies of 2014 By Revenue
Facebook Inc. (Nasdaq: FB)
This is one of the best social media companies that's managed to penetrate every part of the world, amounting to a user base that's over one billion. Facebook's users hit 1.2 billion in the last quarter of 2013, marking a 16% increase compared to the 2012 financial year.
The company's growth has slowed down over the last few years, but it still leads the social media company industry in terms of revenue. It reported $2.6 billion in sales in the last quarter of 2013, a 63% increase compared to the previous year. Profit at the company's Menlo Park headquarters reached $523 million, up from $64 million in 2012. More than 90% of the company's revenue is obtained from ads, and much of FB's recent massive revenue growth has been attributed to success with mobile ads.
FB's 2014 profits and sales have surpassed Wall Street's predictions, contributing to its stock climb of over 140% since July 2013. Facebook shares cost $59.25 on Thursday, with a 52-week range of $22.67-$72.59.
Note: The Fed's 2014 taper means volatility ahead. So we've outlined how to find profits in a volatile market – like triple-digit gains in just days – if you start with this strategy…
Twitter Inc. (NYSE: TWTR)
Twitter's sales have been strong, driven by its initial public offering (IPO) in 2013. The company reported $243 million in sales last quarter, beating analyst expectations of $218 million, and constituting around a 116% increase compared to the same quarter in 2012.
The company reportedly expects a slight decrease in revenue in early 2014 due to a decrease in the number of Twitter users.
Mobile revenue has been very important for the company, and the number of mobile users went up 37% in 2013. Mobile ad sales brought in $220 million, which is 75% of Twitter's total sales that year.
TWTR stock traded at $41.18 per share on Thursday, with a 52-week range of $38.80-$74.73.
Tumblr's current revenue numbers are a bit of a mystery, but it made $13 million in revenue in 2012 and reportedly hoped to make $100 million in 2013 (though no official numbers have been released). Tumblr was acquired by Yahoo! Inc. (Nasdaq: YHOO) in June 2013 for around $1.1 billion.
Tumblr vice president of product Derek Gottfrid said ad demand on the site is strong in a recent interview with The Wall Street Journal. Gottfrid went on to say that Tumblr set records for ads and revenue on Valentine's Day in 2014, with campaigns for Nickelodeon, General Electric, Netflix's "House of Cards," NBC's "Tonight Show," and the movie "About Last Night."
In 2013, Tumblr began allowing companies to pay to promote their own posts to a larger audience. Tumblr Head of Sales, Lee Brown, has quoted the average ad purchase on Tumblr to be nearly six figures. Tumblr also generates revenue by selling themes to users to change the appearance of their blog.
Yahoo! is reportedly working on ways to further boost Tumblr revenue, including using an ad network, an ad exchange, or video ads.
Social scrapbooking site Pinterest is set to generate its first revenue in 2014, when it begins charging advertisers to promote their products to the site's user base.
The site is currently used by one-fifth of all online adults in the United States. The company has been valued at $3.8 billion, and has received $564 million in funding from venture capitalists to-date.
Ads on the site could generate as much as $500 million in 2016, according to an estimate by Wedbush Securities analyst Michael Pachter.
"We have goals. They're projected. At this stage where we're not taking in real revenue, there are a lot of variables," Pinterest CEO Ben Silbermann said in an interview by The Wall Street Journal earlier this year. "But with almost anything we need to do at the company, we set a goal, and we set a plan to try and get to that goal, and we see how we do against it, and we adjust as necessary."
If Pinterest can make the transition into charging for ad promotions successfully, look for its revenue to skyrocket in 2014.
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- The Wall Street Journal:
Pinterest CEO Lays Out Growth Plan, Sees Revenue in 2014