Here are the highlights:
- MySpace, the red-headed stepchild of the social media world, actually has the highest revenue per user. With a projected $347 million in revenue for 2010, the network has dropped to just 67 million users. Still, though, that's just over $5 per user - and the company has yet to become profitable.
- Although Foursquare is often in the news, it has just 3 million users - making Facebook 16,667% bigger.
- Facebook is projecting over $1.1 billion in revenue for 2010, compared to Foursquare's $0.
- Twitter and LinkedIn are neck and neck in terms of total users, but LinkedIn is projecting almost twice as much revenue for 2010 (due in large part to their $7,000 LinkedIn Recruiter tool).
Facebook: 500 million users; $1.1 billion in projected revenue for 2010; $836 million in funding.
Twitter: 75 million users; $140 million in projected revenue for 2010; $160 million in funding.
LinkedIn: 75 million users; $228 million in projected revenue for 2010; $103 million in funding
MySpace: 67 million users; $347 million in projected revenue for 2010; no funding (bought for $580 million in 2005)
Foursquare: 3 million users; $0 in projected revenue for 2010; $21.4 million in funding.
Foursquare, unabashedly having no concrete plans to generate revenue at this time, is thus obviously the most expensive social media network to run for its 3 million users. Of course, $21.4 million in funding certainly helps you cover your day-to-day overhead expenses.
As we said above, MySpace is the surprise revenue winner, generating a relatively hefty $5.18 in revenue per user. Of course, MySpace - the former giant - is now the fourth-largest social media network, falling behind Twitter and LinkedIn. Although their dwindling user base has hurt their ad revenue in the past, it's giving them a good ratio now. LinkedIn is the second best bet for the money at $3.04 in revenue per user, Facebook in third with $2.20 in revenue per user, and Twitter in fourth at $1.87 in revenue per user. (Foursquare is in last place with $0 due to its lack of revenue channel.)
Advertising, products, paid applications and tie ins and other assorted things are helping these social media networks create some serious revenue. Facebook dominates the game with its extensive advertising system, which covers a lot of ground over 500 million users. Application fees and other revenue generators help the space. MySpace has a similarly robust ad network. LinkedIn lacks an ad system, but offers premium memberships and the aforementioned LinkedIn Recruiter Tool, which costs approximately $7,000 per user, to help it raise some relatively hefty revenues. Twitter has started integrating sponsored tweets, promoted trends, and other revenue generators. These are relatively recent developments, however, so their revenue might be quite a bit higher come 2011.
However, revenue is not profit. Facebook only finally turned a profit last year after five years of use. Even so, with revenues somewhere in the $800 million range, their revenue was just "tens of millions." LinkedIn, meanwhile, started turning a profit in 2006, three years after inception. Twitter might have become profitable last year in 2009 - due to selling searches to Microsoft (Bing) and Google - but without any hard numbers on operating expenses, nobody knows for sure. MySpace was never profitable before it was bought by News Corp in 2005, and thanks to its increasingly shrinking market share, it may never become profitable. With no revenue, Foursquare is, of course, not yet profitable, but the various deals and partnerships it keeps striking means that that could change in the near future.
These numbers may not be accurate for long, but for right now they paint an interesting picture of the social media landscape.
Sources:
I found this article facinating. With all the P.R. surrounding social media one would think that profitability would follow. Guess not. I'm surprised that LinkedIn is not more profitable as it does attract high level professionals, often those able to make financial decisions for their companies. I guess the diversity of the professionals makes focused advertizing difficult to sell.
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