Is Zuckerberg's Threads bet unravelling?

Once touted as a "Twitter killer”, Threads has been now losing users at the same speed with which it first gained them. Millions flocked to the newest social media platform by Instagram when it was first launched in July.

According to Similarweb's latest estimates, the Threads Android app peaked at 49.3 million daily active users worldwide on July 7, a day after its launch. A month later on August 7, the app was down to 10.3 million daily active users, roughly an 80 per cent drop.

The average amount of time daily active users spent with the app started out at about 14 minutes, worldwide. By August 7, that was down to 3 minutes. In contrast, X (formerly Twitter) has more than 100 million daily active users on Android alone, and they consistently spend about 25 minutes per day on it.
This has come as a surprise for many mainly because Threads had amassed more than 100 million sign-ups, eclipsing ChatGPT to become the fastest-growing app of all time, according to Data.ai.

The decline was visible within days. Mark Zuckerberg reportedly admitted during a phone call with Meta employees that the regression was “normal” and discussed adding more features to retain the users, said a media report.

The fiasco has come at a time when many advertisers have stopped advertising on Twitter (now X) over brand safety concerns due to an alleged increase in hate speech on the platform and was excited about the possibility of advertising on Threads once the advertising option becomes available.

Meta’s comment on the story was awaited till the time of writing these lines.

Big bet

It is unclear how much investment has gone into Threads or what the plans are to develop it further. However, it's pretty clear that Mark Zuckerberg has been betting big with Threads.

The launch of Threads was the culmination of his secretive, months-long efforts aimed at changing the narrative about Meta Platforms and his leadership. “In January this year, Adam Mosseri, the head of Instagram, led a core group that began to work on Project 92, the codename for Threads”, Wall Street Journal reported quoting unnamed sources.

The official launch of the app was planned for July end, but the launch was preponed after Elon Musk limited the number of posts Twitter users could view per day. Zuckerberg perhaps sought to quickly cash in on the sentiments of Twitter users.

Many experts speculate that Threads will become irrelevant over time, just as Metaverse and virtual-reality headsets—called Meta Quest.

Dr Sandeep Goyal, MD of Rediffusion, quips, “Some adventurism is part of the game when you’ve scaled all mountains. So, Zuckerberg keeps experimenting. Some things play out, some don’t.”

Identity crisis

Threads' biggest challenge has been to find its unique identity. It can’t survive merely being a “Twitter rival” which there are many, many experts say. Some say that Threads looks like an extension of Instagram and many users find it, while others call it “boring” thanks to its heavy-handed content moderation, which bans trolling and political debates that have helped Twitter to grow over the years.

“Threads looks like the first copy of Twitter and it is not even a good one”, says Sahil Shah, President, of Digital Experience, Denstu Creative, adding, “There is nothing unique about the platform. Besides, intellectual users are missing on Threads. Most of its users are Instagram creators who joined Threads by default. Twitter definitely has an age over Threads. Elon Musk is adding more features like longer videos to transform Twitter from a text-first platform to a go-to social media platform.”

Hareesh Tibrewala, Joint CEO of Mirum India, a WPP company, has more faith in Musk than Zuckerberg. According to him, “Threads is an attempt by Meta to move into the 'digital town hall' space but I don’t think this is going to work. We should not underestimate Elon Musk however mercurial his temperament may be. In my opinion, it is just a matter of time before he fixes X.”

Titus Upputuru, Founder & Chief Creative Officer, The Titus Upputuru Company, calls the platform “sterile”, contrary to Meta’s claims to brand it as a “friendly” social medium. “They have claimed that they want to make Threads 'friendly' as people join. But it feels a bit sterile at the moment. However, I’m also not being bombarded with hate speech and racist tirades, which I consider a huge plus over X.”

Neither Twitter nor Threads is a social network. Both are operating like broadcasting platforms, Upputuru opines.

Asif Mulla, Business Director, Publishers Internationale, shares, “Twitter has 25 million active users in India, compared to almost 230 million Insta users which is almost 10X of Twitter. Now even if a tenth of this (parent) Insta base adopts Threads, provided they are reached out through campaigns & enticed well, Threads can easily beat the numbers here. But the trend shows otherwise. Getting this crowd to adopt a new platform & build on their followers could be a daunting task for Zuckerberg unless Musk pulls out some more ugly rabbits outta the hat.”

The rule of the Tech world is that the No 1 is always a distant No 1. Meta in order to maintain its leadership position doesn’t want to give X (Twitter) a walkover, says Sachin Kumar, founder of BottleOpeners. He adds, "I see two things here. One, Threads has managed to create its space to counter X. And two, in order to create long-term sustainability they need to work on ‘user engagement’ as getting a user base is not an issue for Meta which has a user base of Whatsapp, FB, Instagram etc.”

Zigzag strategy

Meta’s challenges are many. Its stock plunge in 2022 knocked more than $600 billion off the company’s market value but has rebounded sharply from its lows in November. That being said, it remains nearly a fifth below its record high in 2021.

Industry leaders blame it on a zig-zag approach of Zuckerberg, who pivoted the company in 2020 to Metaverse and in 2021 to virtual reality, and now in 2023 back to social media with Threads.

The company has been working on virtual reality since its $2 billion acquisition of Oculus in 2014. Meanwhile, its metaverse division-Reality Labs- burned through nearly $16 billion in 2022.

The metaverse was supposed to be the Next Big Thing for the social-media tycoon, who in 2021 went so far as to rename his empire from Facebook to Meta Platforms (META). The metaverse is yet to pay him off. The company is currently struggling to compete with YouTube Shorts and TikTok.

Meanwhile, the tech giant has been struggling on many fronts. The company laid off more than 20,000 workers over the past year. It also faces multiple inquiries in the US following whistleblower revelations about its controversial inner workings.

To make matters worse, it stands to lose billions of dollars over changed policies in Apple’s App Store that emphasize privacy and cut into Meta’s key business model of tracking user behaviour for ad sales.