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I was user #1906886 to join Threads, Meta’s new text based social platform.
That of course doesn’t actually matter. However, what does matter is that Meta was able to acquire 10 million users in just seven hours, 5 million of those came in the first four hours. It took ChatGPT, OpenAI’s text based large language model, five days to reach a million users.
And this is all just a continuation of the saga that is Elon Musk’s takeover of Twitter.
Mark Zuckerberg launched Threads as a rival to Twitter. He said that he wants to create a public conversations app with more than a billion users and that Twitter has not nailed it.
This sparked the literal “cage match” between the two billionaires.
But just how feasible is Threads over Twitter.
Twitter currently has around 250 million users, while Instagram has over 2 billion users. In order to have a Threads account you need to have an Instagram account, which I view as a further solidifier to the network effects that Meta already possesses.
So Threads would need 50% of it’s Instagram users to convert into Threads users to achieve the one billion user mark, on the other hand Twitter would need to acquire 4x the number of new users to achieve the same.
Instagram would only need one in ten users to create a Threads account to takeover Twitter’s user count.
Anyone who is interested in growing a business should understand the importance of a roadmap. No successful company is launched in it’s final form. Initially something is launched, the features are minimal, and feedback loop is tight, and the users/clients/customers inform what the product will be in the future.
Threads currently has just a few features. You can create a Thread, Rethread someone else’s Thread, comment, like, share, you can see your notifications, search for users, and edit your profile. That is really all there is too it right now.
Twitter is much further down their roadmap with direct messaging, following versus for you feeds, a SEO search engine, chat rooms with Twitter Spaces, you can quote Tweet, bookmark, create lists, special circles, and see advanced analytics.
However like I fore mentioned no company is launched in it’s final form. I already see Zuckerberg and the users taking action on the features they want.
Threads may end up looking completely different than Twitter in the end because of the open communication channels from the users and the executives and engineers.
If you are interested in how to build a interesting and lasting roadmap for your company take a lesson from this and watch it very closely. Maybe even join so you can see the progress as it is made.
This is how Meta will make money on this endeavor. I can’t compare and contrast Meta ads and Twitter ads because I honestly lack the knowledge to truly compare the two. So I asked ChatGPT:
“Both Meta and Twitter use machine-learning algorithms to optimize their ad delivery and performance, but they have different approaches and features. Here are some of the main differences:
Meta’s ad algorithm allows advertisers to create lookalike audiences based on groups of individuals selected by the advertiser, while Twitter’s ad algorithm does not have this feature.
Meta’s ad algorithm offers a suite of products called Meta Advantage and Meta Advantage+, which automate various aspects of campaign creation, management and optimization, such as budgeting, bidding, placements and creative. Twitter’s ad algorithm does not have a similar product line, but it does offer some automation features such as ad score, which ranks each Tweet based on its chance of engagement.
Meta’s ad algorithm uses multiple factors to determine which ads to show to each user, such as their interests, behavior, location, device and estimated race or ethnicity. Twitter’s ad algorithm also uses multiple factors, such as keywords, interests, followers, behavior, location and device, but it also considers the recency and virality of the content.”
It seems to me that Meta’s ad algorithm at the very least is built out better than Twitter’s.
But take it a step deeper from just the output from the ads.
A content and social media marketer would look at the business suite as a whole. The easier it is to post cross platform from one place, the faster and more money that one advertiser will spend on that platform.
They may still spend on Twitter, because the idea is not that you have to go to one place or the other, it’s that you have to be everywhere your potential customers are so you are always top of mind.
Fundamentally from a business to business standpoint the Meta Business Suite just got even better. Ads and organic posts just got easier to create and place from a single location.
And you can’t tell me that people won’t spend on both Instagram and Threads because the Threads users are already Instagram users. This will literally mean they spend more because a Instagram user sees their ad on Instagram, maybe they engage with it, Instagram informs Threads and Facebook to continue to place that ad or similar ads from the same company in front of that person until they drop off or convert into a customer. It is so incredibly valuable to have the deep information exchanging platforms.
My commentary above lays out what I believe to be the best case scenario for the company, which is that they would be able to acquire more users than Twitter, steal ad revenue, and grow Meta’s business.
I would love to say that is going to be reality, however obviously that cannot be the case.
There, of course, is a real case where Threads ends up on the losing side and Meta’s potential new income stream right along with it.
Meta currently trades for around 23 times next twelve months earnings, which means you’d be paying $23 for every $1 of Meta’s future expected earnings.
No one can know, yet, the impact of Threads on Meta’s ad revenue and earnings. If earnings come in higher than expected great for Meta and it’s stock, lower, poor for Meta and it’s stock.
This is how markets work, the market will try to figure out the earnings and revenue impact until it happens and either it is going to better or worse and at that time we will get a clearer picture for the next big guess.
Everyone will be trying to make their big guess on Meta’s earnings and revenue. Some may be right, some may be wrong. Maybe all are right, maybe all are wrong. It can go any direction.
Jumping on any bandwagon without exploring the fundamentals or understanding your strategy is a sure fire way to subdue yourself with more emotional investing.
Investing is never a riskless endeavor, no matter how sure fire people make it out to be, and this is no different.