This topic is the central discussion and news topic for the newly launched Threads platform. The app was launched by Meta subsidiary Instagram. It experienced fast growth above 100M users helped by a close connection to Instagram.
My initial assessment : Threads is not of crucial importance to our overall Meta Platforms investment thesis. Nevertheless, it’s interesting to see how adoption on a new platform of this scale is going to play out.
In my opinion, the strategic importance of Threads is more about capturing additional time from Instagram users and deepening engagement and platform loyalty as opposed to generating significant revenue with Threads itself. Additionally data captured on Threads can likely be used to better target ads on Instagram and Facebook, which could become important at one point.
Potential downsides of Threads is a danger of more regulatory scrutiny as Threads is a more political format + a public failure of Threads could have minor reputational importance.
Threads won’t be launched in the EU yet, and not because the Ireland’s Data Protection Commission has blocked it but due to the fact that Meta hasn’t prepare to launch it there.
Meta spokesperson said that Threads will be rolled out in more than 100 countries for the time being.
Threads passed 10 million sign ups within 7 hours of launch.
According to Techcrunch, the only downside of Threads as compared to Twitter is the possibility that it will have algorithmic junk.
Threads doesn’t currently support ActivityPub, a protocol that supports posts on decentralized networks such as Mastodon but Meta has promised to avail it soon.
“We’re committed to building support for ActivityPub, the protocol behind Mastodon, into this app. We weren’t able to finish it for launch given a number of complications that come along with a decentralized network, but it’s coming,” Instagram head Adam Mosseri said
“If you’re wondering why this matters, here’s a reason: you may one day end up leaving Threads, or, hopefully not, end up de-platformed. If that ever happens, you should be able to take your audience with you to another server. Being open can enable that," he noted.
Wells Fargo analyst, Ken Gawrelski, reiterated his equal-weight rating on Meta and a price target of $313.
He believes that Threads could boost sales and earnings in the long run.
“Framing imminent launch of Instagram Threads, we see [opportunity] for incremental revenue and EPS contribution at maturity between 1-3% annualized,” he wrote.
He forecast Threads could contribute 13 to 64 cents per share on an annualized basis to the earnings, that is assuming monetization takes place only in U.S.
Growth of Instagram Threads slowed down significantly according to Quicker Quantitative which is tracking public Threads user counts. While Treads added 100M users in the first 5 days it only added 17M more users in the following week.
More important than user numbers is user engagement. According to Newsnation, which is not citing it’s sources Threads engagement dropped sharply from an initial 20 minutes per user (per day?) to now 10 minutes per user. (per day?)
That in line with Mark Zuckerberg’s recent comments that put emphasis on user retention. (Source)
Early growth was off the charts, but more importantly, 10s of millions of people now come back daily.
The focus for the rest of the year is improving the basics and retention. It’ll take time to stabilize, but once we nail that, then we’ll focus on growing the community.
My assessment: I think “10s of millions of people” is probably describing a number to the lower 10s because otherwise, Zuckerberg could have stated e.g. “more than 50 million people”.
It is absolutely normal though to see engagement drop after initial interest dropped and it is a significant challenge to build activity into a new platform.
Given to slowdown of user growth and Zuckerberg’s comments I believe that it is likely that Instagram slowed down promotional activities as they have now enough users to test and iterate their product with.
Overall i believe it will be seen how the product is developing but initial interest is positive.
Instagram’s Threads launched a “following” tab, which allows users to see chronological posts from people they follow instead of the algorithmitically curated content that appears in the “For you” feed.
Refering to an employee town hall meeting, Reuters reported that Meta plans to bring desktop version and search functionality to its Threads after the app lost half its users in the past few weeks.
“Obviously, if you have more than 100 million people sign up, ideally it would be awesome if all of them or even half of them stuck around. We’re not there yet,” CEO Mark Zuckerberg told employees in a town hall meeting.
CEO Mark Zuckerberg said Threads will bring three new features in the coming weeks.
The features include the ability to share a Thread post in your Instagram DM, a way to add alt text to photos or videos and a “mention button” that enables you to mention someone’s account in your Thread post.
According to Michel Protti, Meta’s chief privacy officer for product, Meta is planning to launch account deletion feature for Threads by December.
“Technically, it was extremely challenging to allow deletion of a separate Threads account without also deleting your overall Instagram account out of the gate. So we paid particular attention to ensuring the user could still exercise their deletion rights, by deactivating the account to sort of hide all content, setting it to private or deleting individual threads,” he said.
Protti also said that they are working on integrating the app with fediverse, a decentralized social network.
Insider Intelligence forecasts that Threads will have 23.7 million U.S. users by the end of 2023, far below X (56.1 million users).
It will also rank below Facebook, Instagram and TikTok, which will have 177.9 million, 135.2 million, and 102.3 million, respectively by the end of 2023.
However, by 2025, Threads users wil increase to 30 million while X users will drop to 47 million.
“Threads received an initial boost from Twitter’s missteps, but it can’t rely on X defectors to continue to grow,” Jasmine Enberg, Insider Intelligence’s principal analyst said in a statement.
Meta Platforms today launched Threads in Europe as was recently announced by the Wall Street Journal.
European users can choose to create a Threads Profile that is connected to the Instagram account or browse Threads content without an account but can’t interact with the content or create one.
Since Threads was launched in July, it has made several improvements such as adding a Following Feed, the ability to edit a post, search with keywords, tag topics, etc.
