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

Bluesky Digital Assets

06/07/2023 01:08

(Updates to reflect that app has now launched)
    By Katie Paul
       NEW YORK, July 5 (Reuters) - Meta's  META.O  Mark
Zuckerberg delivered a blow to Elon Musk on Wednesday night, as
the tech billionaires' rivalry went live with the launch of
Instagram's much-anticipated Threads platform, a clone of
Twitter.
    "Let's do this. Welcome to Threads," Zuckerberg posted on
the app, along with a fire emoji.
    Analysts said investors were salivating over the possibility
that Threads' ties to Instagram might give it a built-in user
base and advertising apparatus. That could siphon ad dollars
from Twitter, whose new CEO is trying to revive the
microblogging company's struggling business.
    While Threads launched as a standalone app, users could log
in using their Instagram credentials and follow the same
accounts, potentially 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'," said Danni
Hewson, head of financial analysis at investment platform firm
AJ Bell.
    Meta stock 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 land a blow, as months
of Musk's chaotic decision-making has roiled Twitter.
    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, big brands "will happily
(invest) a good amount of ad spend on the platform" to seek
refuge in its relative brand safety and capitalize on early
buzz, said Matt Navarra, a social media consultant who has
worked with Meta, Google and Pinterest.
    "We're here to foster a positive and creative space for you
to express your ideas. This time, it's all about conversation,"
said a post by the official Threads account.
    Brands like Billboard, HBO and Variety had accounts set up
within minutes of launch, as did celebrities like Shakira and
other well-known personalities such as former Meta Chief
Operating Officer Sheryl Sandberg. The app did not appear to
show any ads, according to a Reuters review.
    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.
    Some thanked the company for early access in their initial
posts.
    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, Truth Social 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 a 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 David Gregorio and
Christopher Cushing)
 ((mailto:Katie.Paul@thomsonreuters.com;))