Companies like McDonalds, Apple, and Ford all have something in common: They make and sell physical stuff, be it Big Macs, computers or cars. So if you’re considering investing in one of those companies, the first thing you might look at is how much stuff it’s been selling recently — an easily-determined metric that’s a decent representation of a company’s success.
But social media companies like Facebook, Twitter or Snapchat don’t make their money by selling physical stuff. Instead, they make it by selling space to advertisers.
As with all advertisements, digital ad space is more valuable the more it gets seen. And one of the key metrics advertisers use to determine how much they’re willing to spend on a social media company’s ad space is Monthly Active Users, or MAUs.
MAUs are simple enough: Every time you log on to Facebook, Twitter, Snapchat and so on at least once a month, that platform gets one MAU.
That interest in MAUs has extended to Wall Street, where investors have come to view them as the be-all, end-all metric for judging a social media company’s potential to make money. MAUs are popular with investors and other market-watchers because they’re easy to calculate, digest and compare.
But a number emerged this week that should make us all question the MAU as the holy grail of social media metrics: 50 million. That’s the number of MAUs racked up last year by MySpace, a social media network you probably haven’t used since you signed up for Facebook. While MySpace used to be a reliable presence in ComScore’s annual list of the 50 most popular sites on the web, it hasn’t made an appearance there since 2012, when it ranked 46th.
Sure, MySpace’s 50 million figure doesn’t touch the numbers boasted by its onetime rivals: Facebook has 1.27 billion MAUs, Instagram 300 million, Twitter 284 million. But it’s still doubtful that figure is truly representative of MySpace’s shrunken userbase, even if the site still has a small but thriving community thanks to its efforts in music and video.