Can Threads make more money than Elon Musk’s Twitter?

The rivalry between Mark Zuckerberg and Elon Musk has extended into the business world, with the launch of Zuckerberg’s new social media platform, Threads, posing a challenge to Twitter. Within 24 hours of its launch, Threads garnered around 30 million sign-ups, indicating its potential to attract a portion of Facebook’s massive user base. While Twitter still boasts hundreds of millions of users, analysts believe that Meta, Zuckerberg’s company, has a good chance of luring users from Facebook, Instagram, and WhatsApp to Threads.

Zuckerberg’s success in selling advertisements, which has generated billions of dollars in revenue for Meta, is seen as a strength in attracting advertisers to Threads. Though the initial version of Threads will be ad-free, analysts believe that eventual inclusion of advertisements could contribute 1% to 5% to Meta’s overall revenue, potentially generating over $6 billion. This would help Meta mitigate the impact of stricter privacy rules on ad sales, while also positioning itself as a competitor to Twitter, which generated $4.5 billion in ad revenue in 2021.

However, the success of Threads will depend on its future development and whether it can differentiate itself from Twitter. While frustration with Twitter has created a demand for alternatives, winning over power users and individuals who have never used Twitter will be a challenge. Additionally, Meta’s complicated relationship with news and its focus on less news content may hinder its appeal to news enthusiasts and avid Twitter users.

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Advertisers will also seek assurances that Threads provides a safe and transparent environment for their content, addressing concerns related to misinformation and privacy risks. Both Meta and Twitter have faced criticism regarding data transparency, user privacy, and content moderation. Advertisers desire a well-regulated social media environment that aligns with their terms and conditions.

The launch of Threads has received investor confidence, with Meta’s shares experiencing a 4% increase prior to the launch. However, replicating the way news breaks on Twitter will be a challenge for Threads. This suggests that there may be room for both platforms to coexist, or that the emergence of a serious threat from Threads could serve as a wake-up call for Twitter to address its challenges. The success of Threads and its impact on Twitter will depend on various factors, including the eventual inclusion of advertisements and the ability to offer a unique user experience.