Skip to main content

React

Cornell Student Articles on Topical Affairs

Social Media Investment: The Most Impressive Cases

Social networks like Twitter are very popular nowadays. Both individuals and businesses are using these platforms to connect, communicate, and share. But most importantly, social networks are being used as strong business tools. As such, making a social media investment is a great decision in the contemporary world. If your business is not yet present on Twitter, your losing out much. So, enter this field ASAP and as you’ll get more twitter followers, your sales will scale up.

Some naysayers believe that the hype of tech investments in social media networks is over. However, this is not the case. People are still investing in the development of social media networks. And, the inspiration of the people investing in the development of social media networks are the returns that people that were not afraid to invest some networks are reaping today. Some of these investments social media networks started as simple startups and eventually became breakthroughs for these individuals. Perhaps, studying the most impressive cases can help in understanding why it’s reasonable to invest in the development of social media networks.

Twitter 

Twitter started as an idea in the mind of Jack Dorsey back in 2006. Dorsey imaged this social media network as an SMS-based platform. Jack Dorsey and Biz Stone, a former employee of Google, set out to create a podcasting platform known as Odeo. However, this platform became obsolete following the launch of iTunes by Apple. This prompted the co-founders to focus attention on the development of an app that would allow users to plush status updates of about 140 characters.

While brainstorming, Dorsey proposed the development of an SMS-based platform. The co-founders decided to spend some time in developing the platform. Twitter was initially called twttr. At that time, the popular trend was to get a domain-name advantage by dropping vowels in a company’s or services’ mane. Noah Glass, a software developer, is credited for the original platform name and the final incarnation of Twitter.

In the beginning, Twitter was going through a hard time. The co-founders had a hard time after Apple released its podcasting platform. That’s what killed their initial business model, Odeo. As such, the co-founders had to purchase the company back from investors. The buyback was facilitated by Evan Williams, Jack Dorsey, Biz Stone, and other staff members at Odeo.

But, despite having a rough patch at the beginning, Twitter has grown into one of the major social media networks globally. By 2018, Twitter had over 321 active monthly users. Twitter boasts of a valuation of about $31 billion.

Instagram 

Mike Krieger and Kevin Systrom started Instagram as a photo-sharing social media network. They launched the platform in 2010 and it was initially available for iOS devices only. Later, they released a version for Android devices in 2012. In November 2012, they released a website interface with limited features. In 2016, Instagram apps for Windows 10 and Windows 10 Mobile were released.

Since its inception, Instagram has been growing and the individuals that invested in its development have not regretted their decision. Mike Krieger and Kevin Systrom have an impressive story of people that were not afraid of investing in social media network development and ended up reaping big.

These Instagram co-founders moved from coding Instagram 1.0 in a tech incubator at Pier 38 in San Francisco in 2010 to selling the social media network startup to Facebook for over $700 million later. This is a fairy tale in Silicon Valley.

Today, Instagram is the powerhouse of the pop-culture, thanks to the athletes, musicians, and other celebrities that use it. Instagram is among the most downloaded apps and its value is estimated to be $35 billion.

Facebook 

Facebook is perhaps, the most familiar name when it comes to social media networks. Mark Zuckerberg launched this social media network back in 2004. At this time, Zuckerberg was a student at Harvard University. The aim of starting the platform was to connect Harvard students via an online community.

Initially, Zuckerberg came up with an online program known as Facemash. This program enabled users to compare photos and objectify students using their faces and choosing the person they considered hotter. This program earned Zuckerberg a punishment from the university administration. He even escaped expulsion from the university narrowly. Nevertheless, Facemash formed the basis for what people know as Facebook today.

But, more than a decade later, the app that started as a platform for connecting university students is a global phenomenon. Facebook is now among the most influential social media networks globally. It’s estimated to have 2.2 billion monthly users.

This social media network has acquired other platforms like Instagram to maintain the interest of its users. Although the company has faced many challenges including lawsuits based on the breach of the privacy policy of the users, Facebook has continued to grow.

As the Facebook CEO, Zuckerberg earns a one-billion salary. As of June 2016, Zuckerberg was among the top business visionaries that are creating value for the modern world.

Snapchat 

Bobby Murphy and Evan Spiegel can testify that success is not easy to achieve. These co-founders of what’s now one of the most popular social media networks failed 34 times before creating this platform.

Initially, these Snapchat co-founders created a platform called Picaboo. The aim was to develop an application for sending photos to friends after which they would vanish. Picaboo was launched in July 2011 and it was availed in the iOS App Store.

But, this was followed by a challenge where some users could take screenshots of photos that other users loaded on the application. This rendered the disappearance aspect of photos in Picaboo useless.

This prompted the founders of Picaboo to come up with a solution to the screenshot problem. That’s how they came up with a notification feature to inform users when their followers took screenshots of their photos.

In September 2011, Picaboo was rebranded as Snapchat. This was followed by a re-launch of the app as Snapchat in the iOS App Store. The co-founders focused on improving the technological aspect of the app instead of just marketing. They wanted to make the experience of the users more natural. But, that’s was not the end of the challenges.

In 2014, Reggie Brown sued Murphy and Spiegel for denying him an equal stake in this company. He filed a lawsuit against them and an agreement of $158M cash was reached.

But, despite having a challenging beginning, Snapchat has become one of the most popular and extensively adopted social media networks, especially among millennials and teens. The platform has more than 200 million daily users. These spend around 800 hours of videos every second. In May 2016, Snapchat raised $1.81 billion in its equity offering. Thus, the company attracted strong investors and rebranded into Snap Inc from Snapchat Inc in September 2016.

As of 2017, the Snapchat App was valued at around $24 billion. Between 2016 and 2017, Google expressed interest in purchasing Snapchat for at least $30. The co-founders of this social media network are worth around $4 billion.

The Bottom Line

Just like with other investments, there are no guarantees when it comes to social media investments. However, the social media industry is growing continuously. This industry keeps evolving at a very fast pace. And, social media startups are always attracting the ever-increasing young users’ crowd. Therefore, investors should not be afraid of investing in the development of social media networks. These stories of successful and wealthy people who were not afraid to risk throwing their money into social media network development and now reaping big returns should encourage investors.

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to toolbar