“Simple, smarter and safer”
Threads could make Zuckerberg billions
By Max Borowski
7/11/2023 5:38 p.m
For most of its history, Twitter has failed to turn a profit. The copycat app Threads, on the other hand, could soon become a goldmine for the network company Meta.
The Twitter competitor app Threads has made a dream start. Within days, more than 100 million users signed up for Mark Zuckerberg’s meta-corporation platform. Threads is by far the most successful attempt by a competitor to profit from the chaos on Twitter since it was taken over by Elon Musk last fall. The decentralized network Mastodon has just over ten million active users.
With this launch, Threads has a chance to surpass Twitter, which has an estimated 350 to 500 million users. Above all, however, Meta with threads could soon succeed in doing what Twitter has only managed to do in the last two years of its company history: making money. When it comes to monetization, converting the reach of users into revenue for the company, with threads, Zuckerberg is very reluctant. The first thing to do is to make sure the app works well, then “see if we can have a clear path to 1 billion users and only at that point start thinking about monetization.” According to Zuckerberg in a post on Threads, his company also used this in its other successful networks such as Facebook, Instagram and Whatsapp.
Analysts are significantly less cautious about the expected revenue from Threads. According to Mark Mahaney, from the analysis company Evercore ISI, Meta could generate sales of up to eight billion dollars with the new platform in the next two years. With 200 million users, this sum could already be achieved. A mark that Threads will probably soon reach. This should make the network highly profitable. By way of comparison, before Musk took Twitter private, Twitter had a turnover of a good five billion dollars.
Meta can do with new sales
Twitter is still looking for a working business model. In the past, the company relied primarily on advertising. However, the income was almost never enough to cover the costs. After Musk’s takeover, advertising revenues, which were already too low, continued to collapse. Since then, Twitter has been trying to collect more money from users with the Twitter Blue subscription model. Twitter no longer publishes current business figures. However, it is unlikely that the company will now be profitable.
Threads, on the other hand, has the best prerequisites for generating profits with the help of advertising revenue. As part of the meta group, it can draw on the proven business model and technology of Facebook and Instagram. Thanks to its extensive collection of data on its users, which is often criticized by data protection officials, Meta can offer highly personalized and therefore effective advertising. Mahaney assumes that this model will also work on threads, as he explained on CNBC television.
Meta could use that extra boost in sales and profits. The network group had dedicated itself entirely to the Metaverse, a kind of expansion of the Internet to include elements of virtual reality. So far, the billions invested in the Metaverse have not paid off. Last year, Meta cut 20,000 jobs as part of austerity measures. Eight billion dollars is a manageable sum in relation to the turnover of 116 billion dollars that Meta achieved last year. But because the company already has the business model it needs, Mahaney says Threads is an easy, smart, and safe move for Meta.