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Just how big are the fortunes of social media giants?

ON THE MONEY: Facebook CEO Mark Zuckerberg leaves the Newseum Washington, DC

WE LIVE in a world where it’s impossible to ignore the power of social media. From family pictures on Facebook to the latest breaking news on Twitter, right through to a spot of fun on Snapchat or a treasure trove of photos on Instagram and Pinterest – social media platforms underpin the way we work, rest and play in the digital era.

But - cultural importance and power is one thing, financial success is quite another. How have the social media giants fared when it comes to translating likes, posts, shares and comments into pounds, euros and dollars?

Facebook

When it comes to social media, there’s no better place to start than Facebook. With 1,870 million active users – three quarters of whom access it daily – Facebook reigns supreme in this sector.

It famously began as the brainchild of Harvard classmates in 2004 before enjoying phenomenal growth – gobbling up 300 million users worldwide in its first five years.

Investors have been interested in Facebook from the very start, with $500,000 received from Peter Thiel, president of Clarium Capital, within months of launching.

The big change came in 2012, however, when Facebook announced an ‘initial public offering’ (IPO) and invited investors on the stock market. It traded at $38 a share and has, largely, grown steady ever since. $1,000 invested in 2012 would have been worth more than $2,500 just three years later.

In 2017, the share value has topped $150 and Facebook continues to go from strength to strength. It remains culturally relevant – hoovering up apps such as Instagram and WhatsApp to ensure it dominates the top of the download charts and continues to develop sophisticated targeting processes so that advertisers can use its platform to reach the customers that they need to talk to.

Can it keep this up? It has shown no sign of a let up just yet – although it will be a constant battle to keep at the top.

Twitter

While Twitter hasn’t quite earned the eye-popping numbers that Facebook has managed, there’s no doubting the cultural importance of the 140-character instant publishing platform.

It has attracted 328 million monthly active users, offers a direct line to the inner thoughts of the rich and famous and has become a go-to source for breaking news and a way to spread important information quickly. Indeed, within mere minutes of a tweet being made people who trade in forex can see the near-instant impact of this news as it ripples out and forms the way the markets react.

While user growth has stalled, it began trading on the stock market in 2013 in a bid to become a profitable business – something it has found tough to crack. Forbes estimates that the platform is worth more than $15 billion and could be acquired by the likes of Alphabet and Salesforce.

Maybe, unlike Facebook, a profitable future for Twitter lies within the Google empire?

Snapchat

Snapping at their heels, if you’ll pardon the pun, is Snapchat – a platform for messages and videos that, usually, swiftly disappear after they’ve been opened and consumed by the recipient. It has a young audience which, of course, makes it attractive to brands who are keen to tap into an audience which is notoriously difficult to reach.

Perhaps with this in mind, the parent company Snap Inc followed in the footsteps of Twitter and Facebook with one of the most hotly anticipated IPOs of the year. While its shares were predictably purchased (snapped up?) in big numbers, the price has dropped a little in the two months since.

That’s perhaps to be expected but the main battle in the short term comes in trying to edge out Instagram – the Facebook-owned platform whose ‘Stories’ mode is a clear signal of intent to take on Snapchat.

If it emerges from this unscathed, market success and, ultimately, profits, can come in the long term.

All three of these social media giants face a constant battle to stay relevant. This fight for survival has to be waged and success on this front is a prerequisite for investors.

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