This article originally appeared on the Motley Fool.
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 313 million all the way to an impressive 1.9 billion. Here are world's top social networks, along with some interesting takeaways about this list.
- Facebook (1.9 billion users)
- WhatsApp (1.2 billion users)
- YouTube (1 billion users since 2013)
- Messenger (1 billion users since 2016)
- WeChat/Weixin (889 million users)
- QQ (869 million users)
- Qzone (638 million users)
- Instagram (600 million users)
- Twitter (319 million users)
- Weibo (313 million users)
(Data is culled from SEC filings and company press releases. Youtube hasn't shared any recent updates but is likely larger than Messenger today. Platforms without reliable user data or insignificant social characteristcs were excluded)
Facebook dominates the list
Facebook 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 three of the top four social networks are all Facebook properties. Facebook's messaging apps, WhatsApp and Messenger, have 1.2 billion and 1 billion monthly active users, respectively. And Facebook's photo- and video-sharing app Instagram—at 600 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 percent year over year in the fourth quarter of 2016. This growth rate easily beats Twitter 's 4 percent year-over-year growth in the same period, despite the fact that Twitter's growth is on a much smaller base.
But 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 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 seventh 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.
One surprising social network that didn't even make the list is Snapchat, owned by parent company 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 percent 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.