Meta's introduction of 'Threads' has attracted a staggering 30 million sign-ups, but does it pose a potential rival to Elon Musk's Twitter? Axios Global Tech Correspondent Ryan Heath breaks down the story.
Video Transcript
AKIKO FUJITA: Well, Meta is looking to cash in on Elon Musk's troubles, officially launching its new tech service, Threads, seen as the biggest threat to Twitter. And Facebook founder and CEO, Mark Zuckerberg, saying in a thread, that the app already has 30 million signups as of this morning. For more on what this means for the future of social media, we welcome in Ryan Heath. He is Axios Global tech correspondent.
Ryan, Mark Zuckerberg didn't just thread, he actually posted a tweet for the first time in more than a decade, sort of trolling Elon Musk. Should Musk be concerned based off the results on one day?
RYAN HEATH: I think he's very specifically trolling Elon Musk. Look, this is going to be a long play. We don't know how profitable Threads is going to become, but it's clearly having a very quick ramp up. The users that I see when I go on the app are very enthusiastic about being there. You see it with the stock price, certainly not going down like a lot of the rest of the market today. And Elon Musk has created a bonfire out of Twitter as a business, and it was never the best business to begin with.
So I think Zuckerberg is clearly on a winning streak at the moment, and the question is just whether he can play that forward into a real long-term winning streak and take over from Twitter, but he's got the bones of a very successful platform here.
- Ryan, what do you think he needs to do in order to play that forward, in order to get similar type of traction that we've seen on Twitter because when you take into account what's happening at Threads versus what's happening at Twitter, the two don't exactly stack up. It's not exactly an apples to apples comparison.
- Yeah. It's a tricky one. So my view on it is that they're aiming for something between LinkedIn and Twitter. You are able to post 500 characters on Threads, so it's a little bit more substantial, a bit like the original Facebook posts back in the day, but not the sort of brief format that we have come to associate with Twitter. Now, the problem is since Twitter was launched-- aside from the internal problems within Twitter-- we've become a more partisan country. The world has become more divided. People want to gather less in one place.
And that was the real selling point of Twitter at its height, that it was kind of a global town hall or global town square. I'm not sure that Threads is ever going to be able to get back to that point. But what Meta is very good at doing is collecting more of your data than a lot of other services, targeting the ads very specifically at that, being a safe place for those advertisers. So Mark Zuckerberg doesn't have to fully replicate Twitter's cultural moment and success in order to create a really profitable business.
- I mean, that's exactly what I was going to get at, Ryan. Mark Zuckerberg has never been known as an innovator, but he does know how to scale. If you look at Meta, well, formerly Facebook's past track record, how big of a revenue driver can Threads be when you consider there's a lot of advertisers who remove their ads from Twitter who may be looking for a little new-- maybe some new real estate?
- Yep. So Twitter when it was doing its absolute best was bringing in about $5 billion a year. And if we look at Instagram and Facebook, they're bringing in $50 billion-plus each a year, like a combined total of well north of $100 billion. So there's a lot of headroom there for Meta and Mark Zuckerberg to be able to play with. Now, of course, we know that they don't really know how to monetize WhatsApp, and that's another huge success from Meta in terms of user engagement and user numbers.
So Threads could go the WhatsApp way and not be a big money spinner, or it could go the Instagram and Facebook way, in which case, it is kind of rescuing the company from the kind of Meta detour that they took-- this sort of failed venture and rebrand into the Metaverse that doesn't look like it's picking up steam or revenue anytime soon.
- Ryan, Threads is not available at least yet in the EU, a lot of that due, at least according to the reporting, to regulatory concerns. What does that potential rollout do you think look like in the EU, or what do they need to prove in order to get the OK to launch in the EU?
- Yeah, it's not so much that they need permission to launch, but we see this with a few other services at the moment from OpenAI, the makers of ChatGPT. They threatened to pull out of the EU if a specific AI law came into force. We've had others be worried. Google's been worried about its barred chatbot and so on. So I think this is a case of Meta just being very conscious that they have been rapped over the knuckles and fined before when they merged WhatsApp and Facebook.
They did a lot of behind-the-scenes knitting of the data there and the EU was furious and felt they were lied to, and I think they want to avoid falling into the same sort of billion-dollar trap over Threads. So there's no clear timeline about when they're going to enter the EU market, but that also tells us two things. One, those user numbers, that 30 million, it's probably 40 million by now if we're honest with ourselves, those were all obtained as users outside of the EU, except for a few techie folks using their VPNs and whatnot.
So as soon as they go into Europe, those numbers are going to spike again, which is good for them, but it also it tells you that there really is a long runway here. So whatever happens in the US, there's a lot of global growth that they can look forward to. And that makes it really hard for Linda Yaccarino, the new CEO of Twitter. Her whole value add was to be the safe pair of hands for advertisers, to coax more of those advertisers into the Twitter fold, get them to increase their spend, and now Meta is just offering you this great one-stop shop umbrella.
So if you were a nervous advertiser, you're going to stick with Meta probably at this point. You're not going to roll the dice on Twitter.
- Ryan, what does the launch of Threads today tell you about Meta's long-term vision, particularly around social media? I mean, is this just about Mark Zuckerberg taking advantage of an opportunity he sees with advertisers moving away from Twitter, or does this tell you something about the broader ambitions and how he's trying to build up the app space?
- Look, I think that they're in a comfort zone. You know, they aren't that old a company, but they've been around going on 20 years now. And their biggest successes in the last 15 years have really come from copying and buying up other companies-- it hasn't come from homegrown innovation inside Facebook. So that might be like disappointing at an inspirational level or for the people that want to see true entrepreneurship, but it's very smart. They've done an amazing job with their original scale at Facebook.
So to use that scale and marry it to a canny ability to spot a competitor's weakness or another model that works well, that's now a well-established playbook at Meta. So you know, I think it's kind of predictable and it's smart, but it's not sexy in the sense of someone coming up with a new invention and inspiring us at all. But it's going to make Mark Zuckerberg and the shareholders a lot of money, I think in the long run.
- Yeah, which just seems to be the excitement, at least around Meta shares and this launch. Ryan Heath, Axios Global tech correspondent, appreciate you joining us today.
- Thank you.
