Threads Is Not an Automatic Win for Meta
Reading Time: 3 minutesThe Twitter clone brings Mark Zuckerberg’s company a big opportunity—as well as two major risks., Threads gives Meta four big opportunities—and two major risks.
This article is from Big Technology, a newsletter by Alex Kantrowitz.
The updates came swiftly from Mark Zuckerberg. Threads, his Twitter copycat, hit 2 million users within two hours of its launch on Wednesday. Then 10 million within seven hours. Then 30 million the next morning. ‘Feels like the beginning of something special,’ Zuckerberg posted. By Thursday afternoon, Elon Musk threatened to sue.
With a fast-expanding user base and support from its parent company, Threads appears destined to stick around for a bit. And while there’s opportunity for Meta, its new social network is not without risk. In its pursuit of cultural relevance and added revenue, Meta has opened itself to distraction in its fight against TikTok. Threads may also dilute its core apps, weakening their network effects. Here are four opportunities, and two big risks, to consider.
Twitter always struggled to grow revenue because its ad system was inferior to that of its competitors. Meta’s ad targeting and optimization tools are world-class, and they could make a difference when applied to a Twitteresque product. Meta, for context, made nearly $40 per user last year, while Snapchat, with similar features, made $12.98. Twitter’s best year was 2021, when it made a bit over $5 billion. With the assistance of Meta’s ad platform, Threads could do much better.
When Meta copied TikTok, it put a ton of resources into its Reels product and algorithm. To show you the best videos from across its network, not just posts from your friends, it needed a recommendation algorithm more powerful than the Facebook news feed’s. Already, that effort is spilling over to Threads, where algorithms sort the feed, and there’s no ‘following’ tab as of yet. By going all in on For You—at least at the outset—Meta is making a point. It believes that its algorithm is better at finding posts you might like than you are yourself, and it has Instagram’s follow graph as a helpful signal. Meta’s algorithmic feed may work well on a Twitterlike platform, where new and casual users never saw the appeal of building follow graphs from scratch.
In 2018 Meta moved away from public content (particularly news sharing) in favor of ‘friends and family‘ posts. In doing so, it left a void that helped the entertainment-centric TikTok rise. Then, in 2020, Meta introduced Reels, making public content core to its apps again. Now, with Threads, Meta is creating another app for public content consumption, diluting the appeal of its core apps as it wages war on TikTok. Instagram head Adam Mosseri said Threads is for conversations, while Instagram is simply for posting, but the distinction is so subtle it’s almost meaningless. By distracting users, influencers, and its own executives from its core apps, Meta could constrain its best weapon in its fight for the top.
Elon Musk laid off about 80 percent of Twitter’s workforce, and, by one estimate, nearly 15 percent of its early exits already work at Meta. As Threads takes off, Mark Zuckerberg will have the opportunity to poach more ex–Twitter workers eager to enact revenge. On Thursday, Musk threatened to sue Meta for poaching his employees and allegedly using trade secrets. But that’ll be a difficult case to win, considering how gleefully Musk made his cuts. Now ex–Twitter employees, including former comms executive Liz Kelley, are happily promoting Threads while cashing a Meta paycheck. They should be able to help Threads expand smartly as it moves ahead.
Zuckerberg, Mosseri, and their colleagues have promised to build a ‘friendlier’ Twitter, and their product already reflects some of those decisions. There’s no public count for retweets, for instance, which can disincentivize outrage baiting. There’s also an option to hide replies you don’t like—but you can do this on Twitter too, and just look at it. Massive social media platforms have not historically been friendly, and the company is somewhat delusional if it thinks it can simply will into existence a happy-go-lucky version of Twitter.
How about this scenario: Mark Zuckerberg and Elon Musk step into a steel cage sometime this fall. A UFC referee is there to make sure the fight is fair. The wager? If Zuck wins, he gets Twitter. If Elon wins, he gets Threads. Now, that would be a fight worth tuning in to.
Reference: https://slate.com/technology/2023/07/threads-meta-twitter-risks-opportunities.html
Ref: slate
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