By
Temitope Olatunji
May 6th, 2024
Although Threads is not expected to host ads anytime soon, experts believe the changing policies of the X platform make advertisers look into the former for diversity.
The differences between tech entrepreneurs Elon Musk, Tesla Inc (NASDAQ: TSLA) CEO, and Mark Zuckerberg, Meta Platforms Inc. (NASDAQ: META) have morphed into growth competition between X platform (formerly Twitter Inc) and Threads. Undeniably, Musk currently has the upper hand with more than 240 million monetizable users on the platform. In a recent interview, Musk highlighted that the X platform will become a huge financial ecosystem, simultaneously helping users relate socially. Ideally, the X platform has been likened to China-based WeChat after Musk described it as an everything application.
On the other hand, Meta’s Thread has made significant progress by attracting a huge user base as depicted by its rate of download since inception. Launched on July 05, Threads attained the fastest social media platform to hit 100 million downloads both on Android and iOS. Nonetheless, Threads does not currently accept advertising offers as the development and adoption is apparently still in the early stages.
According to Zuckerberg, Threads will shift its focus to advertisers after a clear path to 1 billion users is achieved.
“Tens of millions of users come back to Threads daily, and the team will focus the rest of the year on improving the basics and retention,” Zuckerberg recently noted.
Analysts Take on Threads and Twitter’s Competition
Since Musk took over Twitter, several changes have happened that have had mixed reactions from users and advertisers. However, Current X CEO Linda Yaccarino stated that the social media platform will focus on free expression and a healthy platform for all. Recently, an article by Bloomberg alleged that harmful content on Twitter was on the rise, which was vehemently opposed by X’s leadership. Nonetheless, Musk recently acknowledged that ads on the X platform have declined nearly 50 percent without issuing a definite timeline.
To our partners, we want to address a recent Bloomberg article which claims that harmful content viewed on Twitter has gone up over the past six months. This is an absolutely false assertion. 99.99% of Tweet impressions are healthy. Which means only a tiny amount of content…
— Business (@XBusiness) July 19, 2023
According to analysts at Bernstein, Threads could offer Meta a huge revenue collection avenue if it manages to retain its customers. Specifically, the analyst highlighted that Threads could fetch Meta up to $5 billion in yearly revenues in a few years.
“The unprecedented adoption of … Threads now also offers Meta some material greenshoots to get excited about,” the analysts at Bernstein noted.
A note to investors by Morningstar analysts noted that Threads could add between $2 billion and $3 billion to Meta’s revenue every year between 2024 and 2027. Interestingly, Evercore ISI analysts estimated earlier this month that Threads could generate up to $8 billion in annual revenue by 2025.
However, experts unanimously agreed that it is still in the very early days for advertising comparison between Threads and X platforms as both are still in the development phase.