Meta Platforms is preparing to launch a microblogging service to rival Twitter. It will be a golden opportunity for Meta CEO Mark Zuckerberg to expand his reach into a new social-media niche that is arguably not being well served.
Meta (ticker: META) has a rare opportunity to launch a social-network which will have an instant advantage. Many disgruntled Twitter users are already casting around for a new home.
The restrictions temporarily placed on the number of tweets that Twitter users can view has left them looking for alternatives, with Meta’s Threads—due to launch on Thursday—the most serious candidate so far.
Other would-be Twitter replacements have failed to effectively fill the gap in the market. Mastodon, an initial popular choice, has struggled to persuade users to adapt to its differing design, while Bluesky has been limited by its invitation-only policy with millions left on its waiting list.
Meta’s Threads is unlikely to hampered by any such problems. Zuckerberg’s company has a track record of replicating key features from rivals, such as Instagram’s short-form video format Reels which has helped it offset the threat from TikTok, owned by China’s ByteDance. It also has the advantage of a ready-made userbase — more than two billion monthly active Instagram users compared to Twitter’s 363.7 million monthly users, according to an Insider Intelligence estimate.
The big question is how Meta might monetize its Twitter rival. While Musk has touted the potential value of Twitter as a digital town square and payments platform, other investors have marked its value down to around $15 billion. Meta is currently worth around $736 billion.
However, Twitter’s value has suffered amid a slowdown in the advertising market and the drama around Musk’s purchase which unnerved some commercial customers. Twitter generated $5.08 billion in revenue in 2021 at its peak level as a listed company, before Musk’s takeover. Musk said last year that Twitter was on track to generate around $3 billion in revenue for 2023.
Meta’s Threads is well placed to attract displaced Twitter advertisers and profit from a future rebound in the advertising market.
For Threads to really take off, it will likely need to bring over key Twitter users. Pew Research found last year that among U.S. adults who use Twitter, the top 25% of users by tweet volume produced 97% of all tweets. Musk isn’t going to cede Twitter’s role in the social-media ecosystem lightly, if his early reactions to Meta’s plans are anything to go by.
“Thank goodness they’re so sanely run,” Musk commented pointedly on Monday in response to a tweet about Meta’s plans, as he also retweeted images highlighting data which the Threads app might collect about users, based on its Apple Store listing.
This is probably the right time moment for Meta to strike at Musk’s Twitter — but don’t expect it to be an easy ride.
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