The Daily - Will Threads Kill Twitter?

Episode Date: July 10, 2023

 Last week, Meta, the parent company of Facebook and Instagram, released Threads, a social media platform to compete with Twitter. In just 16 hours, Threads was downloaded more than 30 million times.Mike Isaac, who covers tech companies and Silicon Valley for The Times, explains how Twitter became so vulnerable and discusses the challenges Meta faces to create a less toxic alternative.Guest: Mike Isaac, a technology correspondent for The New York Times.Background reading: Threads is on pace to exceed 100 million users within two months, a feat achieved only by ChatGPT.Here’s what to know about Threads and how it differs from Twitter.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

From The New York Times, I'm Natalie Kittroweth. This is The Daily. Last week, Meta, the parent company of Facebook and Instagram, released a new social media platform to rival Twitter. It quickly became the most rapidly downloaded app ever. Today, my colleague Mike Isaac on how Twitter became so vulnerable and the challenges Meta faces

in its quest to make a less toxic alternative. alternative. It's Monday, July 10th. Mike, as all of us very online people know, and I honestly think maybe everyone else at this point is aware, Meta just launched this Twitter-like product that they call Threads. And it's been lighting the internet on fire. Please help us understand what's going on here. Yeah, I mean, I think Meta basically just sees an opportunity to dethrone Twitter. As you might remember, Meta owns Facebook, Instagram, WhatsApp, and they've wanted to add a Twitter-like app to the company's growing platform of different apps that they own, which some folks are calling a Twitter killer. And, you know, the reason they think they can actually do this now is because Twitter is in a pretty diminished state. And I

don't think you need to be a tech reporter to see it. If you just open the app and look at how things are going, it's pretty messed up right now. Should we look at it together? Yeah. I mean, as soon as I open the site right now, I'm seeing, you know, a bunch of reply guys. What is a reply guy? Just remind me. It's a, do you ever like tweet something, or maybe this is just me, but tweet something benign about my life. And then like 50 dudes will come up and say, actually, I think you're an idiot. That's basically much of life on Twitter. But reply guys aren't really new.

What's new is that these small accounts with basically no followers, people I'm not following, are all of a sudden pushed to the top of my feed. What else do I have here? I'm getting hit with some, oh, that's nice, some spam in my replies and a bunch of crypto bots trying to sell me something. So not great. Yeah. It's just, it's a really spammy place. I mean, I feel like I don't really have control of anything. Totally. I think not feeling in control is like the operative phrase here because I don't have any idea what's going on. Right. And for many of us who've been watching this and also have been reading your reporting, a big part of this story of the current state of Twitter seems to have a lot to do with the current owner, Elon Musk. 100%. So he's used the site for years,

and he's clearly really enjoyed it. But he decided to pay $44 billion for a company that, for a long time, has not actually been a profitable company. Nine out of the 10 years, I believe, that it was public, it was not making money. And so he bought this sort of, you know, foundering business, but he also did it kind of to make more of an ideological point. And his whole thing has been, you know, free unfettered speech on the internet is going away. He wants to make this company a viable business and make it sort of free speech for everyone. No rules, no moderation. The ultimate poster's paradise of Twitter, basically.

He wants to make money and transform Twitter at the same time. How does he go about doing that? Yeah, so Musk's entire thing is cut, cut, cut. His whole sort of history of really running companies has been to pare down the finances as slim as possible. So at first, he basically lays off a third of the company and over the months ahead, continues to cut more and more people till there's probably a couple thousand folks left at the company. How controversial was this idea that Twitter was really bloated? Was that a Musk thing or did other people agree with him? Well, I think, yeah, to be fair to Musk,

like a lot of companies did actually do layoffs over the past year. But there's like, you know, trimming the fat and then there's cutting to the bone, and he definitely cut to the bone. So Musk lays off a ton of people, including gutting the team in charge of content moderation. Yeah, so his other sort of qualm with Twitter is that they were banning a lot of the prominent conservative voices that he thought should be on the platform, you know, from Marjorie Taylor Greene's account to Donald Trump's account to all sorts of other folks who he thought were either unduly banned or shouldn't be banned just because everyone should be having a voice. So he flips the switch. He basically is like, everyone come back and start posting. It felt for a while there that Twitter kind of became the Elon Musk show.

I mean, he was boosting people he liked, right? And he was inserting himself into the site. And it just seemed, one, weirdly personal. And it also just seemed a little unstable. Totally. And it became a lot more political in ways that really upset a lot of folks, especially, I would say, the people who pay to serve ads on Twitter. And that led to problems for the business, basically. Talking about the most contentious issues that we have in our society today and things that a lot of people don't agree on already is not exactly something that is going to get me to buy a Coke when I see the tweet in my feed, right? Totally. So basically, all this made advertisers super uncomfortable.

And they decided to start pausing their amount of money that they spend on Twitter. And that really hurt Musk's pocketbook, especially at a time when he needed to be making money instead of losing it. So Twitter's advertising business is plummeting. But for Musk, advertising business is plummeting. But for Musk, he never really wanted to rely on that business to begin with. His whole vision from the beginning was to move away from advertising and make Twitter a subscriptions business. And what does that look like? Basically, he wants to make people start paying for Twitter. And so his sort of fixation over time has really focused on the blue checkmarks next to folks' names across Twitter. You have a blue checkmark, right? Or you had, I guess, a blue checkmark at one point? I had a blue checkmark. It's long gone. Yeah.

Me too. And that served an important purpose. People could actually say who they were on the platform. And if you or I were scrolling in our feed and saw that blue checkmark, we could have the assurance that what they were saying probably was actually them saying it. For Musk, this system felt, you know, all wrong, basically. He thought that Twitter was arbitrarily doling out these blue check marks to people that they thought were influential, but maybe, you know, the rest of the world didn't. Or maybe they shouldn't be elevating those people. Or maybe journalists shouldn't have the most prominent voices in his feed. So his idea was essentially to flip that on its head. He wanted anyone on Twitter to be able to get the blue checkmark. And to do that, all you needed is $8 a month, and you could sign up and get that blue check.

So first of all, he has people pay for blue checkmarks. And then everybody who had one, you and I, we lost them unless we were going to pay for them. This is where we get to process the loss of our blue check mark. I'm sure it was traumatic for you as well. I mean, I took a few days off work.

No, but I mean, it was a big moment, right? I mean, there was a big moment, right? I mean, there was a complete reversal of the business model happening in real time. All of a sudden, users are being asked to pay for a particular kind of service, right? Totally. It essentially made Twitter subscriptions a kind of pay-to-play model. Now you see someone with a blue checkmark in your feed, and it just means that they paid $8 that month. I mean, I'm wondering, Mike, does the extra revenue from the subscribers,

the people paying for blue checks, at least help Twitter's bottom line? That is a good question. So Musk's grand business plan is to offset advertising with subscriptions. And people aren't signing up for the service in the numbers that he needs. You know, $8 a month from a few hundred thousand people, which were what early reports were saying

he got as what's called Twitter blue signups, was not enough. That's only, you know, like a couple million dollars basically in revenue a month, which is a drop in the bucket compared to the few billion they had over the course of a year, basically. So overall, Musk's financial situation

is super shaky. When he bought Twitter, he had to take out these enormous loans in order to do so. And the interest payments on these loans are huge. He has to pay billions of dollars just on the interest, much less paying back the actual loans themselves. So in order to finance these payments, he's selling stock from his other company that he owns, Tesla, which is driving down the value of that stock for his company. We also know that he's not paying his bills at Twitter. You know, Twitter is literally getting evicted or threatened eviction at some of its office spaces because he's not paying the rent on his buildings in San Francisco and Seattle and a number of the places that Twitter still has offices. So he's in this really dire financial position.

And that's why it was so weird when he came out a little over a week ago and said he was basically putting limits on how many tweets people could actually see. Yeah, so this was really confusing to me, too, because it's the exact opposite of what I thought social media companies were supposed to do. I mean, they want us to spend a lot of time on their sites, right? Because that means more eyeballs on ads. And while Musk has said he doesn't want to rely on ads, you just said his subscription business isn't bringing in any real money. So, Mike, help me understand what is going on here. Yeah, I mean, that was the question I asked initially when I woke up like a week ago and couldn't start scrolling, doom scrolling like I usually do. But as with all things Elon Musk, it is kind of complicated.

So here's how he characterized it. Basically, there are a lot of companies in Silicon Valley developing artificial intelligence systems. So Microsoft, Google, OpenAI, Meta, etc., a bunch of different startups. And companies like Twitter are a great resource for them. It's the largest body of natural language conversations online outside of, say, Reddit or Facebook. So these other companies can basically build bots that scrape all of that data and take all the posts on Twitter and then feed it into their AI systems in order to ultimately make it sound like those systems are able to have

real human conversations with us when we use them. And right now, and for pretty much the entire history of the internet, they've been able to do that entirely for free. So clearly Musk does not like that. He hasn't liked it for a while, and he wants them to pay up. The problem is when he's restricting our viewing access, he's not really distinguishing between, you know, regular paid subscribers to Twitter and these bots that are scraping Twitter. So, you know, if you and I are not paying for Twitter, we only get to basically see like several hundred tweets a day now before we're cut off, which I don't know about you, but for me, that is not a lot. That's probably me in like 15 minutes before I'm done scrolling.

Right. Maybe that says something about me. But for Musk, this is really about charging other companies for something they shouldn't be getting for free, which I don't, I mean, I think that's not crazy. I think there are other companies doing that right now too. Reddit has said that they're trying to lock down their data, tell Google and other companies to stop taking their data for free. The problem is he did it in the worst possible way and made everyone else upset across the service, including, you know, folks like you and I who use it regularly. But we also know Musk is in this bad place financially with his server agreements, right? You know, Twitter doesn't really rely on its own servers to keep it up and running all the time. It uses servers at Google and Amazon and pays, you know, billions of dollars in bills to do that every year.

And Musk hasn't been either able or willing to pay for the amount of server space he actually needs to keep Twitter running. So you can also look at the tweet limits as a way for him to kind of save money on those bills. It's probably not all about AI. Yeah, it just sounds like all of this is adding up to be a pretty desperate situation for Musk. Yeah, absolutely. The limits on tweets felt like the final straw for a lot of people who were sticking around. And they started looking for other options. There are a bunch of other startups that are trying to kind of do this, step into the space and compete with Twitter.

And it's a slower process, I would say, with people migrating there. And for a long time, all these problems Twitter was facing didn't really matter or didn't really threaten its existence to some degree because other folks weren't able to compete at the, let's say, at the scale

that Twitter was operating at. Until now. One of the other giants in the social media space, Meta and Mark Zuckerberg, is smelling blood in the water, and they introduced a new site of their own. It's called Threads, and it might be the first real existential threat to Twitter's business. We'll be right back.

Mike, you just walked me through all these problems with Twitter's social media business. And now in comes Meta trying to move in on that business. Why would Meta want to replicate something that, based on what you just told me, seems like a really challenging business model? This is totally a fair point. But I think, you know, Mark Zuckerberg, Meta's CEO, has wanted to own Twitter for a very long time. He tried to buy the company, you know, more than a decade ago. And he sees it as part of the social media landscape, another arena that people are talking and conversing online,

and he doesn't want another company to own that. He wants to own that. And then they think that, unlike Twitter, which has been consistently unprofitable for a very long time, they can actually make this business work. And why is Meta so confident that it can succeed there where Twitter failed? So Meta is not the first company to think that they can do this. There was Mastodon, which is a little bit more techie version of Twitter with a lot more sort of complication in how to get it going. There's Blue Sky by the co-founder of Twitter, Jack Dorsey, but that's slowly inviting people to the network and is run by a very small team with limited resources, I would say. And Meta is different from all these smaller competitors. They have a bunch of built-in

advantages. For one, they have almost half the planet using one or more of their services, from Instagram to WhatsApp to Facebook proper. Do you mean that literally half the planet? Oh, yeah. I mean, there's 3 billion people that use one or more of Meta's services regularly. Wow. I think people forget about the scale of Meta. It is a huge company.

And so they have this built-in advantage in Instagram in particular, which is a place where more than 2 billion people use the app regularly. You need to use Instagram in order to sign up to threads. And one of the ways that helps Meta is that it allows you to basically bring all your Instagram followers over to the new app. It sounds like it's doing two things, right? It's like, one, if you have 2 billion users on Instagram, a small percentage of that is a really decent number of people to start a new social platform with. And then also, it gets rid of that problem that some new social media networks have, which is starting from scratch and having no followers and no audience kind of sucks.

So for the individual user, you don't have to do that with this. You have a kind of base from the get-go. 100%. It's sort of like when I first got to Blue Sky, it was like coming up in the club and I'm the first guy there and the dance floor is empty and I'm trying to like get down by myself. Whereas with Threads, they wanted it to feel like a party

that you got to at like, I'm old, so I would say 11 p.m. But what, 2 a.m.? I don't know. I don't know either. Yeah, I trust you. 2 a.m., let's say, yeah. And it kind of worked. You know, Mark Zuckerberg posted in the first two hours that 2 million people joined the app. By the next morning when he woke up, they were at 30 million people. It just keeps sort of going up and up and up. And the other part of this is that Meta can actually handle this giant influx of people coming in the door on day one. Meta has

spent billions of dollars on infrastructure servers over the years to make sure that they don't really have these types of problems and keep their services running. You know, also, you have another advantage. Meta has one of the most sophisticated advertising businesses in the entire world. They could essentially hook threads into their existing advertising technology and, you know, potentially sell ads to advertisers who already buy ads on Instagram or Facebook or other meta properties and apps. And that's potentially lucrative right now. But, you know, for now, they are at least not turning on ads in threads until they get the user experience right. So we went on Twitter. It only feels fair to take a look at threads. Should we go on?

Yeah. I actually downloaded it. Am I an early adopter? I was like the four millionth user. Oh, interesting. I was the 2,768th user, just FYI. Wow, Mike. This is a sign you're too online.

So immediately upon opening the app, I have a golden retriever puppy in my face, if that's indicative to what the vibe is. I see a rabbit named Leachie, which is really nice. Okay, it looks like Twitter, but it doesn't feel like Twitter. I mean, I have a lot of food pictures, and I guess there's this piece of this that's just a lot of the people that I follow on Instagram are the people that I am following on threads. But then there's this also sort of jarring thing where it's like, do I want to see all of my Instagram follows, inner thoughts unfurl on this app? Totally. I mean, they are super different vibes as far as like what I do on Twitter versus what I do on Instagram, right?

And I think Meta also knows that that is an issue. Like they're trying to reckon with that. I spoke to the head of Instagram a few days ago, and they said they're going to try to, like, figure it out. And they hope that the culture kind of forms itself over time. What did he tell you about what Meta wants the app to feel like? So their whole thing is, we want this to be a friendly place for conversation online. That is the way that they're trying to distinguish themselves from Twitter. Their whole

thing is we know that you go to Twitter and don't feel great when you use it. We want you to come to threads and feel better about having talked to people online on threads after you use it. I mean, it sounds like Meta is saying, yes, this is basically a copy of Twitter, but it's going to be a much nicer version. This is going to be a place to have cordial conversations. But we know that you can't control speech and much less on social media. What makes Meta think that they can keep a positive vibe on the platform?

I think their whole deal is the algorithm. Meta, Facebook, Instagram, they have a long history of creating social media feeds that are curated and more specific to what their algorithm believes you and I actually want to see. And so a hallmark of Twitter is essentially what's called reverse chronological order. You see every post from every person you want to follow. Meta's idea of that is if we can curate it algorithmically to show people nicer things, maybe that keeps them coming back. Maybe we don't show them as much political content or news that might be

upsetting. Maybe we try to stick to, oh, people sure spend a lot of time looking at this dog pic or people like interacting with this celebrity or comedian on here, we're going to promote them much more. I don't know if it'll work. It also doesn't mean that everything is going to be shiny, happy, and friendly because Meta wants it to be. Right. This has been a problem in the past for Meta. It's been linked to spreading false information, making political discourse more polarized, sometimes inciting violence here and abroad? Yeah, you're totally right. You do not have to look back into the past that far to see a bunch of examples of how algorithmic curation has gotten meta in trouble. You know, they were early and

really instrumental in spreading some of the QAnon groups across Facebook, the conspiracy theorist groups. They had a hand in spreading political messages with ethnic cleansing in Myanmar a few years ago, which was absolutely horrible and really upset people even inside of Meta. And there was the January 6th uprising at the Capitol that initially organized across Facebook groups. So they don't have all the answers necessarily. One thing I will say that Twitter didn't have that Meta does have is at least a bigger budget for content moderation and providing early tools and more sophisticated algorithm detection to take down toxic content. I'm definitely not saying it's perfect, and I'm definitely not saying that they do it well all of the time.

But compared to Twitter, which has basically no one running things over there, it's at least somewhat better. So, Mike, how is Twitter and Elon Musk responding to this new threat from Meta? Not well. I would say Musk is not happy. He had his lawyer basically send a legal threat to Meta's counsel,

essentially saying, you're stealing our intellectual property, you're poaching our employees, you're cheating. He went on Twitter and said,aching our employees, you're cheating. He went on Twitter and said, competition is fine, cheating is not. Essentially saying, you guys are cloning us and we may sue you if you don't knock it off. Yeah, he's not happy. And he shouldn't be happy because he spent $44 billion trying to make this thing work. And the biggest social media company in the world might come and eat his lunch. I also find it really interesting

that a lot of the chatter on threads and Twitter about what's happening has this kind of euphoric aspect to it where it really does feel as though a lot of people are rooting for threads and are rooting for Meta, the biggest social media holding company in the world that has been accused over and over of many of the same issues that have plagued Twitter. And we're just allowing this company to own more of our

time. And I just, I wonder what that says about the moment that we're in right now. Dude, if you would have told me a year ago that people would be rooting for Mark Zuckerberg and Meta to beat Twitter, to clone Twitter and to stamp it out, I would have told you you're crazy. But it speaks to how upset people are with Elon Musk and some of the changes he's made to this service that people love and hate at the same time. It probably speaks to Zuckerberg coming in at the exact right moment and realizing that he has a foil that he can sort of put himself against and look good. But to your point, it also is another moment where meta only gets bigger and bigger. And I think folks should probably at least reckon with that when they're making some of

these decisions and how that makes them feel if they're comfortable with it. Mike, I'm also wondering what this says about us, that the replacement for Twitter wasn't just going outside, you know? I know that sounds quaint, but this is a real question. I mean, when Twitter started to spiral, I think there was a sense of relief among some people, and I'm outing myself here, that there was gratitude that we would no longer have to care about being on this platform that had become often hateful and toxic. And then, and I'm including myself here, as soon as another viable option came along, we all said, yep, we'll try it. I think about this a lot just in the context of really the internet and social media. I think humans do have some desire to connect to one another.

And it's a real love-hate relationship with how the internet fundamentally works. I don't see people logging off forever just because Twitter is not working. I feel like that just becomes the moment where maybe you start looking for the next thing. We're seeing an interesting thing happening with this kind of, you know, optimism that maybe another company can do it differently, or at least being open to the idea that, you know, there's another service people can use. You know, you see all these folks jumping on board immediately and at least trying it out, which is, I guess, the best the Meta could hope for. And I've seen this

happen a bunch of times before in Silicon Valley, too. So there's no guarantee of success here. I don't know if you remember Google+, for example, but just because they have big numbers early on doesn't mean that they're going to stick around. That said, maybe Meta will figure out some parts of this, I don't know, secret formula of a non-toxic and actually responsible social media platform. I'm a little skeptical just because they don't have the greatest track record, but there's no question they absolutely have the power to at least change digital culture and tech history and how people communicate online. I just don't think we're going to see that on day one. I think we're going to have to wait till, you know, year one

is over to see if this thing actually sticks around. Mike, thank you. Thanks for having me. We'll be right back. Here's what else you need to know today. A self-described white nationalist who killed 23 people at a Walmart in El Paso, Texas, was sentenced to 90 consecutive life sentences on Friday. life sentences on Friday. The gunman, who had written that he thought Hispanics were, quote, invading America, pled guilty to federal hate crime charges in the 2019 mass shooting, one of the deadliest attacks on Latinos in U.S. history. He still faces a separate state murder trial where Texas prosecutors have said they will seek the death penalty.

And after meeting with economic policymakers in Beijing, Treasury Secretary Janet Yellen promised the U.S. and China would pursue more frequent communication and said the bilateral relationship was on steadier footing despite deep differences. relationship was on steadier footing, despite deep differences. Yellen's trip to China, the first by a U.S. Treasury secretary in four years, did not produce any new agreements or policy announcements, but it was seen as a positive step toward easing tensions between the two countries. Today's episode was produced by Ricky Nowetzki, Rob Zipko, Eric Krupke, and Alex Stern. It was edited by Patricia Willans with help from Mark George, contains original music by Marian Lozano, Dan Powell, and Alisha Ba'etup, and was engineered by Alyssa Jane Moxley.

Our theme music is by Jim Brunberg and Ben Landsberg of Wonderly. That's it for The Daily. I'm Natalie Kittroweth. See you tomorrow.