Bloomberg — Meta Platforms Inc.’s (META) answer to Twitter has rocketed to 100 million users in less than a week, Chief Executive Officer Mark Zuckerberg announced on Monday.
“Threads reached 100 million sign ups over the weekend,” Zuckerberg said in a post. “That’s mostly organic demand and we haven’t even turned on many promotions yet. Can’t believe it’s only been 5 days!”
The Threads app, a spinoff from Instagram that uses people’s accounts for that service, got off to a scorching start on Wednesday and racked up 70 million users within two days, going “way beyond our expectations,” according to Zuckerberg.
The text-centric service closely resembles Twitter in look and functionality, earning the displeasure of Twitter owner Elon Musk who has accused it of being a copycat and an “Instagram minus pics.” The two billionaire owners have traded jibes in recent weeks and Threads is now at the center of an intensifying rivalry.
The new app’s launch has benefited from Meta’s immense reach — Instagram alone has more than a billion regular users — and changes at Twitter that have alienated large swathes of its most active user base. Threads still lacks a number of basic features, such as a chronological feed composed solely of people you choose to follow, but it provides a very familiar experience and doesn’t yet have any advertising.
How much could Threads generate for Meta?
It is still early days, but Threads, could generate some serious cash for the social media giant in the next couple of years, according to Evercore ISI.
Threads will reach close to 200 million daily active users and generate about $8 billion in annual revenue over next two years, Evercore ISI analysts led by Mark Mahaney estimate.
It’s off to a good start: Instagram’s new app, designed as a direct rival to Elon Musk’s Twitter, signed up 100 million users in the days since Meta launched the service last Wednesday.
It’s a fraction of the $156 billion average annual revenue analysts expect Meta to generate in fiscal 2025, according to data compiled by Bloomberg, but ahead of the $5.1 billion in sales and revenue Twitter earned in its last full year as a public company. Last year, Meta brought in about $117 billion in revenue and has more than 3 billion active users across its social media apps.
It will be interesting to see if Threads can maintain a reasonably robust growth rate and keep users engaged without meaningfully cannibalizing engagement on Meta’s other platforms, Facebook and Instagram, Mahaney, who has an outperform rating on the stock, wrote in a research note.
His peer from KeyBanc Capital Markets Inc., Justin Patterson, also sees the app bringing in several billions of dollars in ad revenue for the company but it “will be an immaterial contributor near term as Meta likely focuses on adoption over monetization.”
Mark Zuckerberg, who has been very active on his new platform, seems to share that view.
Late last week, he posted on Threads saying “our approach will be the same as all our other products: make the product work well first, then see if we can get it on a clear path to 1 billion people, and only then think about monetization at that point.”
Meta’s stock has more than doubled this year and jumped as much as 2.6% to touch a 17-month high in Monday trading. Meta, along with other tech giants, has been one of the driving forces behind gains across the S&P 500 and Nasdaq 100 benchmarks in 2023.
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