Less than 24 hours after Mark Zuckerberg launched his alternative to Twitter, Threads, the app has garnered approximately 30 million sign-ups.
This early success positions Threads as a credible contender in the social media landscape, although it still falls short of Twitter’s massive user base of hundreds of millions
Industry analysts believe that Zuckerberg’s Meta, the parent company of Facebook, Instagram, and WhatsApp, could entice a significant portion of its three billion-plus users to embrace Threads, potentially attracting advertisers. Unlike Elon Musk, who has shown disdain for advertising at Tesla, Zuckerberg has a proven track record of generating revenue through ads, amassing over $117 billion in sales for Meta last year.
Initially, Threads will be ad-free, allowing the company to fine-tune the app’s functionality.
However, industry experts anticipate that ads on Threads could eventually contribute 1% to 5% of Meta’s overall revenue, potentially generating over $6 billion in the most optimistic scenario.
This additional revenue could help Meta mitigate the impact of stricter privacy rules imposed by Apple, which have affected its ad sales.
The success of Threads and its potential revenue generation will depend on its evolution in the coming weeks and months. While Twitter threatened legal action against Meta, accusing them of stealing trade secrets, Threads has already garnered significant interest from users seeking an alternative to Twitter’s platform.
Meta’s promise of a ‘saner, kinder place’ compared to Twitter has accelerated early sign-ups, with influential figures like Sarah Jessica Parker, Shakira, Oprah, and Khloe Kardashian endorsing the platform.
Winning over Twitter’s power users and attracting those who have never used the app will be a significant challenge for Threads. Meta’s complicated relationship with news, one of Twitter’s core functions, and Zuckerberg’s past struggles with innovation could hinder Threads’ sustained success.
Advertisers will also closely evaluate Threads for risks associated with misinformation and privacy. While Twitter has alienated advertisers through sudden content moderation changes and post visibility limits, Meta has faced criticism for data transparency and accuracy issues.
Advertisers seek a well-regulated environment for their campaigns, which is currently lacking in the social media landscape.
Meta’s shares experienced a 4% increase prior to the Threads launch, indicating investor confidence replicating Twitter’s role as a news-breaking platform will be a significant challenge.
Industry experts suggest that both Threads and Twitter can coexist, or alternatively, Threads’ presence could serve as a ‘wake-up call’ for Musk’s Twitter.
The duration in which Threads remains ad-free will be crucial, as it represents the time frame in which Twitter must rectify its advertising strategy and regain its footing in the market.