Threads is an Existential Threat to Twitter. Nice-to-Have for Meta

Threads is on its way to topping ChatGPT as the fastest-growing consumer application.

• Within 24 hours of launch, Threads surpassed 30M users — barreling towards Twitter’s 368M monthly active users.
• And Threads isn’t even available in the European Union yet — holding back over the region’s new privacy laws.

Is Twitter in trouble? It already was before. Advertisers have pulled back from Twitter, and Musk expects its 2023 revenue to come in 41% below its 2021 peak of $5.1B — a fraction of Meta’s 2022 revenue of $116B.

But Meta investors are more interested in whether Threads can get anywhere near the size of IG, FB or WhatsApp. For that to happen, it’ll have to attract users beyond Twitter’s hardcore users.

Threads is only one of many things going right…

In a detailed analysis, UncoverAlpha’s Rihard Jarc wrote about the factors helping Meta fire on all cylinders:

1/ Instagram Reel’s traction is picking up — with time spent on the platform growing towards the end of 2022, just as TikTok’s US growth slowed.

2/ WhatsApp is finally “ready” for monetization — nearly ten years after Zuck bought it for $19B. While WhatsApp has a massive monthly user base of 2-2.5B, it’s been heavily under-monetized — but “Meta is making big leaps every month to make WhatsApp a cash machine for the company.”

3/ AI will have a big impact on Meta — improving the results for its advertisers while making Meta’s company even more efficient. Jarc also argues that AI will reduce human involvement in running ad campaigns, leading companies to increase their ad budgets.

Meta doesn’t need Threads to succeed, but it certainly does help. Can’t say the same for Twitter.