Threads of engagement

Meta's new platform needs a clear business model

The launch of Meta’s new Threads is beautifully timed. The new “text-based conversation app” is witnessing signups at an astounding rate. Threads has seen over 90 million of those within three days of its launch, despite its decision to avoid rolling out the new service in the European Union (EU) in order to avoid running into trouble because of Europe’s stringent General Data Protection Regulation (GDPR). This is an uptake way faster than even that of ChatGPT, which took a month to hit 100 million signups. Threads is obviously aimed at grabbing mindshare and eyeballs from Twitter, which is incidentally threatening legal action against Meta for this “knockoff”. The fact, however, is Twitter has brought this upon itself through poor business decisions.

Twitter has looked increasingly vulnerable ever since Elon Musk bought the platform and took it private, instituting massive layoffs and changing the business model. It has lost users and advertisers, and, above all, mindshare. Attempts to generate alternative revenue streams via paid verification have not compensated for lost ad revenues. But micro-blogging alternatives like Mastodon Social, Bluesky, Truth Social, and Koo have not successfully taken over the space Twitter has vacated. Nor has Weibo, which suffers from Sino-centricity despite a large base. This space — that of a text-based platform for engagement and micro-blogging — is, therefore, wide open and Meta has a good shot at taking over. It is leveraging Instagram’s 2.5 billion user base (1.6 billion users outside the EU) to “cross-pollinate”. Going by the uptake, this strategy has thus far been successful.

It is, however, really too early to list the pros and cons of Threads and its features, and compare them with those of Twitter or other rivals. Threads could roll out changes, offer new features, and tweak the interface over the next few months as it assesses user response, feedback, and engagement levels. But questions remain as to what exactly it aims to do beyond winning initial eyeballs. At some stage, it must try to monetise. One surprise, for example, is that according to the Meta management, Threads is not interested in being an overtly political or news-driven platform. While avoidance of politics fits more or less with Instagram’s orientation, Facebook has plenty of socio-political content. If Threads really avoids a focus on breaking news and political commentary, its content will be orthogonal to that of Twitter, whose unique selling proposition is being the go-to platform for rapid news dissemination and an arena for political flame wars. Institutional accounts, and accounts run by politicians, generate a very large share of Twitter engagement.

If Threads doesn’t wish to exploit the immediacy of micro-blogging to churn out this kind of content, where does it hope to find engagement? If instead it is based on a revenue model that harvests private, personal data at levels that conflict with the GDPR, it is likely to run into trouble in other jurisdictions as well. More nations are tightening controls on data collection and monetisation. Facebook, for example, has been hit by growing user aversion to targeted advertising. It’s early days yet and Meta certainly has the heft in terms of scale, financial resources, and deep experience at managing social networks to find a workable business model. However, its last big bet, the metaverse, has not yielded results. While the launch has been promising, the next few months will determine if Threads sets new trends in micro-blogging.