Two tech titans, Mark Zuckerberg, and Elon Musk, have been making headlines recently. Not for a physical cage fight, as Musk whimsically suggested, but for a far more consequential battle in the digital arena. It’s a face-off between Meta’s new text-based network, Threads, and Musk’s Twitter.
Twitter’s Troubles Under Musk
Musk’s reign at Twitter has been a rocky one. Approximately 80% of the nearly 8000 employees that Musk inherited have been laid off to reduce expenditure. User traffic has been dwindling, and Twitter’s introduction of a paywall on July 1st has further alienated users. Advertisers have been departing in droves, with Twitter’s ad revenue projected to drop by 28% this year, according to eMarketer.
Investors are feeling the strain. Financial firm Fidelity estimated in May that Twitter had lost about two-thirds of its value since Musk took over. Amid this turmoil, Zuckerberg’s control of Meta seems a beacon of stability.
Zuckerberg’s Rise Amid Chaos
Zuckerberg’s Meta was once synonymous with privacy invasion, misinformation, and unpleasantness. However, the chaotic management of Twitter has made Zuckerberg’s leadership at Meta appear more appealing. His approval rating has quietly climbed to its highest in over three years, while the controversies at Twitter continue.
Meta’s Commercial Opportunity
Meta now sees a chance for commercial success. Various startups have tried to capitalize on Twitter’s problems but to no avail. Mastodon saw a huge drop in users after peaking in November, and Donald Trump’s Truth Social and the latest contender, Bluesky, have struggled to gain traction.
Threads, Meta’s new venture, stands a better chance. Meta is no stranger to successfully cloning rival apps. It launched Instagram Stories in response to Snapchat’s popular disappearing posts, and it introduced Reels to counter TikTok’s short videos.
The Advantage of Threads
Threads has the advantage of scale. Unlike Reels, it will be a standalone app, but it will allow Instagram users to log in with their existing details and follow the same people with a single click. Most Twitter users also use Instagram, so they now have an easily accessible alternative.
Musk’s decision to announce a paywall just before the launch of Threads may provide the push some users need to make the switch.
Why Threads Could Be Worth The Trouble
Zuckerberg sees two potential benefits from Threads. One is advertising. Twitter has struggled to monetize its users because it knows little about them. Meta, on the other hand, knows a lot about its users from its other apps, and can therefore target them with well-tailored ads from day one.
The other potential benefit relates to large language models that feed on text from the internet to produce human-like responses in AI applications. This technology values large amounts of text. By setting up Threads, Meta will have its own source of rich language data.
Challenges for Threads
Despite the potential benefits, Threads faces significant obstacles. Launching a new social network is notoriously difficult, and even with its 3.8 billion existing users, Meta has experienced failures. Facebook Dating, for example, remains unpopular, and the company’s gaming and shopping initiatives have yet to take off.
However, as Twitter continues to hemorrhage users and advertisers, and Musk’s management continues its unique trajectory, the opportunity for Threads is growing. Regardless of the outcome of the hypothetical cage match, Zuckerberg may emerge as the victor in the social media arena.