The Journal. - Can Threads Be the ‘Twitter Killer’?

Episode Date: July 10, 2023

Meta recently launched a new app that's a direct competitor to Twitter. It's called Threads, and Meta's Mark Zuckerberg said it has garnered 50 million sign-ups in its first five days. WSJ's Salvador Rodriguez says the new app poses the biggest threat to Twitter, fanning the flames of a long rivalry between Twitter’s Elon Musk and Meta’s Zuckerberg. Further Reading: - Day After Threads Launches, Twitter Accuses Meta of Using Its Trade Secrets  Further Listening: - Twitter’s New CEO: The Velvet Hammer  - What’s allowed on Elon Musk’s Twitter?  Learn more about your ad choices. Visit megaphone.fm/adchoices

Back in June, Elon Musk went on Twitter and suggested a fight. Not a flame war in someone's mentions, but a real quote-unquote cage match. With Facebook founder Mark Zuckerberg. Oh my gosh. Zuckerberg has told me that he has agreed to fight Elon Musk at UFC 300. And, you know, the talks that I've had with Elon, Elon trained in martial arts, too. He's done jujitsu. Billionaire tech tycoons want to fight each other. This is a rivalry that goes back many years in Silicon Valley.

This is a rivalry that goes back many years in Silicon Valley. That's our colleague Salvador Rodriguez. And he says that according to Wall Street Journal reporting, the two have been jealous of each other for a long time. Way back when, Elon was jealous of the amount of money that Mark Zuckerberg had. He had a higher net worth at the time. And Mark Zuckerberg was jealous of just the public reputation that Elon had, which at the time was that of a very cutting-edge innovator, a Iron Man-like type of persona. So far, the proposed cage fight hasn't happened.

But a different battle between the two has already started, and it's playing out on our phones. Last week, Zuckerberg's company Meta released a new app that is a direct competitor to Musk's Twitter. It's called Threads. As of today, Zuckerberg said the app has 100 million signups. This is one of the most successful, if not straight up the most successful, launch that Meta has ever had for a product, especially a standalone app. I don't know that this launch could have gone any better for Meta. Right away, people online started calling Threads the Twitter killer. Now that the app has launched, it's war between Twitter and Meta.

the app has launched its war between Twitter and Meta. You know, this is the real cage match that we need to look out for because this is on its way and this is going to be a showdown. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday, July 10th. It's Monday, July 10th. Coming up on the show, has Twitter met its match with threads? Your teen requested a ride, but this time, not from you.

It's through their Uber Teen account. It's an Uber account that allows your teen to request a ride under your supervision with live trip tracking and highly rated drivers. Add your teen to your Uber account today. So I downloaded the Threads app, and it's prompting me to log in with my Instagram. Okay, and I'm in. Ooh, it looks like Twitter, except with this funny Thread logo on top. When I open it, there's threads here. There's one from a friend of mine. She's talking about waiting for Barack Obama to join. There's some Instagram pages that I follow. I mean,

I'm seeing GIFs. I'm seeing photos, memes. Threads looks like Instagram and Twitter had a baby. Like Twitter, there's a feed where you can scroll through short posts from people you follow and what the algorithm recommends for you. But unlike Twitter, you can import your profile picture and bio directly from Instagram and share thread posts to your Instagram feed or to a story. You also need to have an Instagram account to log into Threads. How many followers do you have on Threads right now? I can tell you I have exactly one, our producer.

I've got 279 at the moment. Nice. And how does that compare with your Twitter followers? Quite a bit less. On Twitter, I've got 14.7 thousand. Hey now, hey now. How long did it take to build up that following on Twitter? Yeah, I think I've been curating my Twitter since, you know, 2008 or 2009. Twitter has been the top microblogging app for years. A favorite of everyone from journalists and politicians to gamers and

activists. But it has long struggled to make money. Then, in October of last year, Twitter got a new owner, Elon Musk. The billionaire who made Tesla the largest electric car company in the world wanted to shake things up at the social media company. He'd been a longtime user who also had a lot of ideas about how the platform should be run. But it is safe to say that Twitter's Musk era hasn't gotten off to a smooth start. Ever since Elon took over, there's been a number of issues with Twitter. For starters, Elon at this point in time is quite a polarizing figure. You know, there are some people that absolutely adore him, and then there are others who cannot stand him. So him being in charge, that alone drove away some folks. Since then,

there's been, you know, other events that have occurred that have continued to draw the ire of some Twitter users. Musk took away some users' blue checkmarks, which was a way to verify their identities. And he allowed users to buy checkmarks through Twitter Blue, the company's subscription service. Musk also raised the price for a Twitter Blue subscription. On top of that, there were broad changes to the platform's algorithm and content moderation policy. These changes have spooked advertisers. Some left the platform. And many users were unhappy too.

We need to talk about Twitter. Ever since Elon's taken over Twitter, I think this platform has been going through a rollercoaster of pure hell. The way he's implemented Twitter Blue made Blue checkmarks insignificant for verification and locked some key social media features behind this subscription paywall. So this is a complete 180 from the openness that Elon was promising when he first took over the platform. And recently, Twitter announced another big change that frustrated more users. Elon and Twitter announced that they were going to limit

the number of posts that users could view per day. That's something that is absolutely unheard of for social media apps. Although I personally don't know anyone that has run into the view limit, it's just interesting to hear that that would be a thing, you know? Did Musk give a reason behind making all of these changes? Yeah, he's given his reasons for sure. I believe with the limiting of the view post, they said that that was to limit the amount of data scraping

that was occurring on their platform. And he's defended his actions otherwise as well. With the Twitter blue and the verification, that was very clear cut saying that people should pay for the social networks that they use and that they needed a revenue stream. And so that made sense. And so yeah, so he's defended his actions, but it has created this perfect combination where others can step in or, you know, the sharks are circling now. The biggest shark circling was Meta. Last week, it pushed up the release of its Twitter competitor after seeing more bad press for Twitter. Initially, it was supposed to launch on Thursday, but in the walk up to that, at some point, it was decided to launch on Thursday, but in the walk-up to that, at some

point, it was decided by leadership at Meta to actually go ahead and move that up to Wednesday. It felt very much kind of like a throwback to those move fast and break things days of Facebook when it was a startup, of just kind of seeing an opportunity and kicking caution to the wind and saying, let's go. Like, it's right now. And whether it was worth it or not, we'll see. It felt very impromptu.

It kind of felt like a musician riffing. You know, they just really went after it. The launch went really well for Meta. Threads had 30 million signups within a day of its release. So how did Twitter and Musk respond? That's next. Summer is like a cocktail. It has to be mixed just right. Start with a handful of great friends.

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at A&W's in Ontario. Meta developed and launched its Threads app quickly. The company had reportedly been working on a Twitter competitor since at least March. We don't know exactly when it started, but we do know that this is something that they were working on even as far back as a couple of months ago. That's when the first report of this being underway came out. ago. That's when the first report of this being underway came out. But certainly it's a market that, you know, Meta has been... No worries. Sorry. I just got a Threads notification, so I'm going to silence my phone now. Yeah, good luck with that. There's many Threads notifications going around at the moment. Yeah.

notifications going around at the moment. Getting too many notifications was one early complaint of Threads users immediately after launch. There were other bugs too, like some feeds that didn't load. And it didn't have all the same features as Twitter. Like you couldn't search for posts and you couldn't send DMs in the app. Meta says those features are on its, quote, list of things to think through for future releases. Sal says some of these bugs resulted from Meta's rush to get the app out. I think that the product that they put out

was impressive for launch, but some of those features that they're missing, they are key and they do give Twitter quite the edge. I feel like they basically put out a product that was about 75% baked. So that cuts it for day one, but that's not going to cut it for like day 30, you know. And the longer they wait to get these features in, every day is another day that someone's going to go back to Twitter and they're not going to come back to threads. And what does long-term success look like for Meta? For Meta, if they really want this to be a thing,

if they want to achieve the goal that Mark himself said, which is that he believes that Threads could be a 1 billion active user platform one day. It's a goal right there. That is a goal, but that's also a benchmark that Meta has had for all their other apps, you know, for their family of apps, or as I like to call it, the Meta social media empire. Zuckerberg and Meta have long had two strategies for growing that empire.

Buy it like the company did with Instagram and WhatsApp, or clone it. Meta has quite the history, quite the polished resume of copying competitors and in fact, being quite good at it, right? This is something that we saw in 2016 when Instagram launched Stories, which is a direct response to Snapchat. And we saw it again in 2020 when Instagram launched Reels, which at that point was a response to TikTok. So, you know, you can see that this has been a strategy that's been around at Meta for a decade. And the results speak for themselves because, you know, stories is a key feature of Instagram, you know, at this point. And also Reels seems to be doing well on both Instagram and Facebook. So it's something that they've done numerous times before. I don't think it's a strategy that necessarily earns them respect amongst their peers or users,

but I'm not sure what the dollar value of respect is. Zuckerberg has now tried both those strategies with Twitter. In 2008, he tried to buy the company, but the deal didn't go through because the two sides couldn't agree on a number. And now, Meta has launched Threads. There have been other Twitter alternatives that have popped up recently, like Blue Sky or Mastodon, but they had to start from scratch to build their audiences.

That's not the case for Threads, which can build off Instagram's huge user base. I think that Meta made the very smart choice of leveraging perhaps their most popular asset, which is Instagram, and using that to springboard threads so that they could have this quick and quite successful launch.

There are 2 billion monthly Instagram active users. So it's quite the pool to pull from. And especially if you want to compare the two apps, the estimate out there for Twitter is that they have 360 million monthly active users. If Instagram manages to sign up 25% of their active users, that'll be a 500 million user base for threads. But as Meta grows to take up even more of the social media space, Sal says it also needs to be careful. Something that is now just a regular fact of being at Meta is that they are constantly caught up in situations involving regulations and antitrust accusations.

And so that certainly takes up a lot of attention as well. And so you've got to wonder how many folks in Washington, how many folks in Europe are concerned about how much more power this gives to Meta and Zuckerberg in the social media marketplace. How did Twitter respond to the release of threads? In the initial aftermath of the threads launch, Musk responded to it with a tweet on Wednesday saying that it is infinitely preferable to be attacked by strangers on Twitter than indulge in the false happiness of the hide the pain Instagram. So that was his response. Wow. Besides that, Twitter did send a letter to Meta. In the letter, a Twitter attorney alleged that Meta hired Twitter employees and put them to work on threads, saying Meta has,

quote, engaged in systematic, willful, and unlawful misappropriation of Twitter's trade secrets and other intellectual property. In a post on threads, a spokesman for Meta denied the allegations. And what does it mean for Twitter that this new app is now out in the world and potentially threatening their existence and their user base? What does this mean for Twitter? It's not good. It's yet another headache, yet another obstacle for them. Because if this really takes off and it draws in users, people who have never tried microblogging at all in the first place, if they get to the size of Twitter or bigger, the potential problem that you have is the

advertisers leaving. And that's the real key because that's how, you know, despite the fact that Musk has tried to make the blue subscription service a real business, it's not a real business just yet, as far as we know. And advertising is still the bread and butter. And if they lose that, that's going to be extremely worrisome for Twitter. Who do you think has more to lose in this fight? Musk and Twitter or Zuckerberg and threads?

I think if Zuckerberg wins here, this adds to his social media empire and this certainly will be a notch in his belt. This is probably the biggest tech rivalry than we have seen in a couple of maybe decades perhaps. And it'd be really great for him. If he loses, I think it's business as usual and back to focusing on the metaverse.

Musk and Twitter are fighting for their lives. So losing would be a very bad option in this situation. And, you know, this is a very open battle. And it's really up to the consumers to vote with their time spent on their phones who they want to win. Is there an option? Is there like an opt-out option? For the sake of everyone's mental health, it probably perhaps might be better to opt out. I don't know, you know. That's all for today, Monday, July 10th. The Journal is a co-production of Gimlet and The Wall Street Journal.

Additional reporting in this episode by Deepa Sitharaman and Tim Higgins. Thanks for listening. See you tomorrow.