Will Meta's New Social Media Platform Threads Be a Success? The App's Revenue Challenges and Opportunities

Threads, Mark Zuckerberg's new app has seen tremendous success since its launch in early July. It has gained over 92 million signups and attracted a wide audience, including users from Instagram and those who are dissatisfied with Twitter. The ongoing rivalry between Mark Zuckerberg and Elon Musk has taken an intriguing turn with the introduction of Threads. The app offers a diverse range of features that have the potential to make it one of the most beloved platforms of all time.

Currently, Meta claims that Threads is ad-free. However, since Instagram and Facebook heavily rely on advertising for revenue, it is likely that Threads will eventually incorporate ads. While an ad-free experience allows for uninterrupted scrolling, it may not be ideal for those seeking to monetize their presence on the platform.

Meta's other apps, such as Facebook and Instagram, have reaped significant benefits from advertisements, generating $117 billion in sales last year. In contrast, Elon Musk takes a different approach to advertising and continuously explores alternative funding methods for his companies.

According to Justin Patterson, a research analyst at KeyBancCapital Markets, even if Meta decides to introduce advertisements in Threads, the revenue generated could contribute 1% to 5% of Meta's overall revenue. While this may not initially seem like a substantial amount, it becomes significant considering the challenges Meta faces due to Apple's privacy rules. Additionally, it comes as no surprise that Threads has performed well without ads, as its potential revenue is comparable to Twitter's ad revenue of $4.5 billion in 2021, prior to Elon Musk's involvement.

The future success of Threads will depend on its continued development. However, Elon Musk's legal action concerning stolen trade secrets adds a layer of complexity. It is worth noting that both Zuckerberg and Musk have encountered challenges related to transparency, privacy issues, and data handling. Nevertheless, Threads' promise of providing a superior ecosystem has already attracted popular celebrities and dissatisfied Twitter users to the platform.

Summing up, this ongoing quarrel between Meta and Twitter suggests that both platforms have the potential to coexist or serve as a wake-up call for Elon Musk and Twitter. If Threads remains ad-free for a certain period, it may offer Twitter an opportunity to address its own challenges.

Read next: The New Threads App By Meta Is Blowing Up By Nearing 100 Million Downloads And Here’s Why People Can't Get Enough

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