Zuckerberg-Musk fight is on: Meta launches 'Twitter Killer' Threads app

Bluesky Digital Assets

05/07/2023 23:26

By Katie Paul
       NEW YORK, July 5 (Reuters) - Meta's  META.O  Mark
Zuckerberg is set to deliver a blow to Elon Musk on Wednesday
night, as the tech billionaires' rivalry goes live with the
launch of Instagram's much-anticipated Threads platform, a clone
of Twitter.
    Analysts said investors were salivating over the possibility
that Threads' ties to Instagram might give it a built-in user
base and advertising apparatus, which could siphon ad dollars
from Twitter as its new CEO tries to revive the microblogging
company's struggling business.
    While Threads is launching as a standalone app, screenshots
posted on Apple's App Store showed that users would be able to
log in using their Instagram credentials and follow the same
accounts, making it an easy addition to existing habits for
Instagram's more than 2 billion monthly active users.
    "Investors can't help but be a little excited about the
prospect that Meta really has a 'Twitter-Killer' poised to
launch on the app store," said Danni Hewson, head of financial
analysis at investment platform firm AJ Bell.
    Meta stocks closed up 3% on Wednesday ahead of the launch,
outpacing gains by competitor tech companies as the broader
market edged down.
    Threads' arrival comes after Zuckerberg and Musk have traded
barbs for months and even threatened to fight each other in a
real-life mixed martial arts cage match in Las Vegas.
    The timing is opportune for Meta to deliver a blow, as
months of Musk's chaotic decision-making has roiled Twitter,
said Matt Navarra, a social media consultant who has worked with
Meta, Google and Pinterest.
    Musk bought Twitter for $44 billion last October, but its
value has since plummeted as it faced an exodus of advertisers
amid deep staffing cuts and content moderation controversies.
    While Meta is likely to focus first on growing users before
incorporating advertising on Threads, "there will be big brands
that will happily (invest) a good amount of ad spend on the
platform" to capitalize on early buzz, said Navarra.
    "It's going to be more palatable and brand safe than what's
being offered over on Twitter," he said.
    To build up Threads, Meta has been making overtures to
social media influencers to attract them to the new app and
encouraging them to post at least twice a day, said Ryan Detert,
CEO of influencer marketing company Influential.
    The app also benefits from the failure of other would-be
Twitter competitors to take advantage of the service's stumbles.
While a number of new and burgeoning competitors such as
Mastodon, Post and T2 have tried to lure Twitter users away, all
remain relatively small so far.
    Bluesky, a new service backed by Twitter cofounder Jack
Dorsey, launched its invite-only beta in February and instantly
created buzz on Twitter, with users clamoring to get access
codes. Its website says it has 50,000 users. Dorsey has also
backed another platform called Nostr.
        But history is working against Meta. It has suffered
multiple failures launching standalone copycat apps in the past,
most notably its Lasso app aimed at competing with short video
rival TikTok.
    The company later incorporated a short video tool directly
into Instagram and more recently wound down its unit tasked with
designing experimental apps as part of a cost-cutting drive.
    Another potential strike against Threads is that the
news-oriented culture on Twitter is different from that on
Instagram, a more visual platform, said Jasmine Enberg,
principal analyst at Insider Intelligence.
    "The main use cases for Twitter still remain keeping up with
news and world events," said Enberg. "I find it hard to imagine
that the most avid loyal Twitter users who go to Twitter for
that type of culture will defect and go immediately to Threads."
    Still, she said, Meta only needs to convince a quarter of
Instagram's users to join Threads in order to rival Twitter's
size. "The reality is that Meta doesn't need to convert Twitter
power users into Threads users."

 (Reporting by Katie Paul; Additional reporting by Sheila Dang,
Chavi Mehta and Bansari Kamdar; Editing by Kenneth Li and David
Gregorio)
 ((mailto:Katie.Paul@thomsonreuters.com;))