Meta Platforms Unveils New Threads Social Media Platform
Like him or not, Meta Platforms (NASDAQ: META) CEO Mark Zuckerberg knows how to cause a stir. On Thursday, Zuckerberg unveiled his newest social media platform, a short-form blog site called Threads. At a quick glance, Threads looks a little bit like a hybrid of Instagram and Twitter. It is just the latest shot fired in the rivalry between two of silicon valley’s most famous billionaires.
As of Friday, just one day after the release of Threads, there were already more than 70 million users. For comparison, Twitter has about 350 million, although for anyone who has spent time on the platform, at times it can seem like there are more bots than humans. Within 24 hours, Threads already has 20% of the user base that Twitter has.
But what does this mean for Meta’s stock? Shares of the company were essentially flat this week, but are still up by more than 130% this year. Is the hype for Threads already baked into Meta’s stock price? Or is it the recent round of economic data and the potential for more rate hikes that are weighing on investors?
Twitter Sues Meta Over Threads Platform
Perhaps there is no greater sign of a successful launch than being a threat to the established platform. On Friday, Twitter and CEO Elon Musk sued Meta for allegedly copying some critical elements of Twitter. It’s not the first time that Zuckerberg has been accused of stealing an idea, and it certainly won’t be the last.
But in my opinion, it was one of the worst things that Musk and Twitter could do. It comes off as a defensive tactic and almost admits a level of defeat. There has certainly been a change in user experience since Musk took over Twitter. Non-verified users who do not pay the monthly subscription on Twitter seem to be getting their engagement throttled in favour of those who do pay for a blue check mark. Subscription revenues are great but never at the expense of the user’s experience.
Not that Meta has a sparkling track record itself. Some are already complaining that conservative threads have been muted, while Twitter has pushed the concept of freedom of speech under Musk. Meta is also collecting a lot of personal data for signing up for Threads, although it can be argued that they likely already have that info through Facebook, Instagram, or Whatsapp.
Meta Stock Outlook
It will likely take a while before Meta can properly monetize Threads. But you can argue that no company better monetizes through ad placements than Meta. The same cannot be said for Twitter which has fumbled the idea of monetization over the years. Given the smooth integration with Instagram so far, there’s a good chance that Threads will surpass Twitter’s user numbers at some point in the future.
What does this all mean for Meta’s stock? Likely not much for a while. But Meta is already operating as a leaner company targeting higher margins and a return to profit growth. If and when they begin to monetize Threads it will be at least one more revenue stream for the company. Zuckerberg is clearly out to make up for the lost years of the Metaverse, and Threads is an excellent start. We could be looking back in a few years at the launch of Threads as another turning point for Meta. Shares are expensive, but revenue could be growing exponentially for years to come.
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