Threads: Competing against X has become a one-horse race

Threads: Competing against X has become a one-horse race
Mark Zuckerberg: Threads is already one-fifth as popular as X in terms of monthly active users

Threads, Instagram’s microblogging app, now has “just under” 100 million monthly active users (MAUs), Meta CEO Mark Zuckerberg announced during the company’s third-quarter earnings call yesterday.

“I’ve thought for a long time there should be a billion-person public conversations app that is a bit more positive,” said Zuckerberg. “I think that if we keep at this for a few more years, then I think we have a good chance of achieving our vision there.”

Meta’s overall earnings were positive in a continued reversal of last year’s relative financial woes. The company reduced its costs 7% year-over-year thanks in part to significant layoffs made throughout 2023, and boosted revenues 23%.

Analysis: a two-platform race

In July, X owner Elon Musk declared users of his platform reached a “new high,” exceeding 540 million MAUs.

Musk has a poor track record with accurate news, but even if we take him at his word, Meta has already built a userbase that is nearly one-fifth (18%) as large as X’s within just three months.

The race to compete against what was Twitter is effectively over. Whereas Meta is approaching 100 million monthly actives, Mastodon (1.8 million) and the still invite-only Bluesky (1.1 million) pale in comparison.

Keep in mind, Threads is still lacking some core features such as a better desktop experience and a direct-messaging option, and is yet unavailable in Europe. So there’s a lot of room for continued user growth.

Meanwhile, MAUs are a relatively poor measure of success for social platforms, especially from an advertising perspective. While it encompasses total scale of reach, accessing a site monthly is a low bar for interaction with any form of media, and other metrics should be considered.

Analysts have previously noted Threads’ sluggish user retention, reflected in reported daily active user (DAU) figures, following a boom in sign-ups upon release. DAUs dropped from a peak of 44 million to under 8 million in August. For comparison, though X CEO Linda Yaccarino claimed the platform has around 225 million DAUs, estimates from the likes of Apptopia suggest the figure is closer to 121 million; either number would amount to a significant decline in audience from the 254 million DAUs Twitter had before Musk bought the company last year.

Following extreme amounts of disinformation and misinformation reported on X amid the outbreak of the Israel-Hamas war, a number of high-profile journalists and celebrities have joined and more regularly posted on Threads in recent weeks, which could provide a boost to daily and monthly actives by drawing in users seeking to use the app to keep up to date with breaking news.

‘There won’t be a party unless it’s cool’

Zuckerberg appears to see no reason to ease off the pedal of user accumulation by introducing advertising to Threads before it hits a critical mass of users.

“We’re now getting to the point where we’re going to be focusing on growing the community further,” Zuckerberg said in Meta’s Q3 earnings call. Referring to Threads as “a compelling long-term opportunity,” it is not yet clear when he will look to push to monetise the platform with advertising.

Recall Aaron Sorkin’s dialogue from David Fincher’s The Social Network: “There won’t be a party unless it’s cool.”

Zuckerberg appears to be following the tried-and-true tactic of amassing user growth before cashing in with advertisers. This has been derided as an anti-consumer business tactic (famously coined as “enshittification” by Wired‘s Cory Doctorow), but it’s a likely business strategy for Threads. Per Sorkin’s dialogue, it’s unwise to “end the party at 11pm,” by formally introducing ads too early, even though they’re likely to come at some point.

Brands have been toying around with posting on the platform, and Meta has tested placing Threads posts on its other apps like Facebook and Instagram. That has meant content on Threads has already been placed next to ads and promoted posts elsewhere.

Still, it isn’t clear whether advertisers will see it as a must-buy opportunity once Meta inevitably opens its doors to formal advertising. To sign up for Threads, users must have an Instagram account, so advertising on the microblogger would effectively be double-dipping on an audience that can already be obtained on Instagram, which is likely to have superior inventory options due to the rising popularity of video posts.

The likes of Twitter were never a major part of advertisers’ digital budgets, but by developing Threads into a successful competitor, Meta is effectively becoming an all-in-one social media provider: it owns traditional social media with a strong offer for small- and medium-sized businesses (Facebook), a photo-sharing monolith (Instagram), a popular short-form platform to compete with TikTok and YouTube (Reels), the largest global messaging services (WhatsApp, Facebook Messenger), and now a popular alternative microblogging platform (Threads).

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