This article was updated on April 26, 2017, and originally published on March 30, 2017.
A network effect is arguably one of the most powerful competitive advantages a business can have. While network effects can come in different forms, the concept is simple: A business benefits from a network effect when the value of its platform increases with each additional user that joins.
Social networks are great examples of businesses with network effects. But which social networks are the largest? Measured by their monthly active users, the top 10 social networks range from user counts of about 300 million all the way to almost 2 billion. Here are the world's top social networks, along with some interesting takeaways about this list.
World's biggest social networks
- Facebook (1.9 billion users)
- WhatsApp (1.2 billion users as of February 2017)
- Messenger (1.2 billion users as of April 2017)
- YouTube (1 billion users)
- WeChat/Weixin (889 million users)
- QQ (869 million users)
- Instagram (700 million users)
- Qzone (638 million users)
- Twitter (328 million users)
- Weibo (313 million users)
In a chart, the world's top 10 social networks look like this:
Facebook dominates the list
It's fair to say that Facebook (NASDAQ:FB) knows a thing or two about building successful social networks. The company absolutely dominates this list.
Not only do the 1.9 billion monthly active users on the company's core Facebook app beat out the rest of the world's social networks by 700 million users or more, but also the top three social networks are all Facebook properties. Facebook's messaging apps, WhatsApp and Messenger, have 1.2 billion monthly active users each. And Facebook's photo- and video-sharing app Instagram -- at 700 million users -- made the list as well.
In addition, Facebook's social networks continue to grow rapidly. Even the company's core Facebook app saw its monthly active users grow a nice 17% year over year in the fourth quarter of 2016. This growth rate easily beats Twitter's 4% year-over-year growth in the same period -- and even Twitter's higher 6% year-over-year growth in the company's first-quarter of 2017 -- despite the fact that Twitter's growth is on a much smaller base.
Tencent is crushing it in China
Believe it or not, there's another dominant company on the list. While many people in North America may be unfamiliar with its social networks, Chinese internet company Tencent Holdings (NASDAQOTH:TCEHY) owns three of these 10 social networks: WeChat and Weixin (essentially different modes of the same app), QQ, and Qzone. These social networks are the fifth, sixth, and eighth largest social networks in the world.
Notably, the fact that Facebook and Tencent together account for a whopping seven of the top eight social networks reinforces how strong of a competitive advantage social networks have. By flexing the significant reach and breadth across their platforms and integrating features across the networks under their name, Facebook and Tencent offer significant value to their users and to the businesses who make money on their networks.
Snapchat isn't so hot after all
One surprising social network that didn't even make the list is Snapchat, owned by parent company Snap (NYSE:SNAP), which just went public in March. Despite being one of the biggest IPOs in recent history, Snapchat has about 301 million monthly active users, according to estimates by Statista.
But Snapchat could make it onto this list soon. Though Snap opts to only share its daily active users with investors, this metric was up sharply in the fourth quarter of 2016, suggesting Snapchat still has some growth ahead of it. Snapchat's daily active users hit 158 million during this period, up 48% year over year.
Can Facebook and Tencent continue to dominate the list in years to come, proving the staying power of a network effect? Or are the world's biggest social networks more susceptible to disruption than might be thought? For now, Facebook and Tencent's prevailing presence on this list suggests the biggest social networks won't be knocked from dominance easily.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Facebook. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Facebook, and Twitter. The Motley Fool has a disclosure policy.