In a surprising turn of events, tech titans Mark Zuckerberg and Elon Musk have engaged in a playful exchange, jokingly discussing the possibility of a cage match. However, their true battleground lies within the fiercely competitive world of business.
Less than 24 hours after Zuckerberg unveiled Threads, his alternative to Twitter, the platform has already garnered an impressive 30 million sign-ups. This early surge in users lends Threads a sense of credibility, positioning it as a serious contender in the realm of social media. It is important to note, though, that Threads still has a significant gap to bridge in order to catch up with Twitter’s massive user base of hundreds of millions.
Interestingly, Zuckerberg has revealed that Threads will initially be free from advertisements. He emphasized the company’s focus on refining the app’s functionality before considering monetization. Zuckerberg stated, “Our approach will be the same as all our other products: make the product work well first, then see if we can get it on a clear path to 1 billion people, and only then think about monetization at that point.”
Nevertheless, industry analysts predict that once Threads introduces advertisements, it could contribute 1% to 5% to Meta’s overall revenue. In the most optimistic scenario, this would generate more than $6 billion. Justin Patterson, an equity research analyst at KeyBanc Capital Markets, highlighted this potential in a note.
Zuckerberg’s remarkable track record in selling advertisements, which resulted in Meta amassing over $117 billion in sales last year, speaks volumes about his expertise in this domain. In contrast, Musk, known for his reservations about advertising at Tesla, his electric car company, has been exploring alternative ways to fund Twitter.
This potential boost in revenue is not to be disregarded, particularly as Meta grapples with the impact of stricter privacy rules imposed by Apple, which have impacted ad sales. Moreover, Threads’ potential success puts it within striking distance of Twitter, which generated $4.5 billion in ad revenue in 2021 before Musk’s involvement brought about significant changes.
The future of Threads and its revenue potential will depend on its evolution in the upcoming weeks and months. Meanwhile, Musk reportedly stands ready with a counter-punch, threatening legal action against Meta for alleged trade secret theft.
However, dissatisfaction with Twitter has left many individuals eagerly seeking an alternative. Meta’s promise of providing a “saner, kinder place” compared to Twitter has ignited a wave of enthusiasm, resulting in a surge of early sign-ups, according to Jasmine Enberg, an analyst at Insider Intelligence.
In this fierce battle, only time will reveal which platform emerges victorious and manages to captivate the user base and advertisers alike.
