Threads has launched at an opportune time, but it’ll be tough to outshine Twitter, analysts say

• Meta launched Threads social media platform — its answer to Twitter — on Wednesday.
• 10 million users signed up for Threads in the first seven hours of its launch, per CEO Mark Zuckerberg.
• Analysts say it could be tough for Threads to outshine Twitter’s existing power user base.

Meta’s new text-based app, Threads has only been out for a short while —  but it has already amassed over 10 million users in the first seven hours of its launch, according to CEO Mark Zuckerberg.

To be sure, Threads got a leg-up from Instagram — which built the new platform — since users of the photo-sharing app can log into Threads using their existing profile details.

And the buzz around Threads has also been palpable since many Twitter users have been searching for alternatives following the chaos at the legacy platform since Elon Musk bought the company last year.

“Twitter is still the best place for real-time updates, but its cracks have shown for some time beyond Musk’s purchase, and this could be the opportune time for Meta to pounce,” Daniel Newman, the CEO of Futurum Group, a research and advisory firm, told the Wall Street Journal in a report published Wednesday.

Newman added — in a tweet — that he is “definitely not leaving Twitter 🫶.” Meanwhile, he has also already set up a Threads account.

—Daniel Newman (@danielnewmanUV) July 6, 2023

And even though Threads launching at an advantageous time, at least four Wall Street analysts say it could be challenging to outshine the incumbent.

“The market is already flooded with Twitter alternatives including Bluesky, Mastodon, Post.News, and Hive – each of which is competing for Twitter’s market share,” Mike Proulx, a research director at market research firm Forrester wrote in a Wednesday note.

“A fractured user base dilutes the value of any one app alternative,” he added.

After all, it could be difficult to get Twitter users to move, Billy Duberstein, a portfolio manager at Stone Oak Capital, wrote on the Motley Fool website on Wednesday.

“Getting users to switch over from Twitter may prove a difficult slog. Twitter has a first-mover advantage and the network effects that come with it, which constitute a very important moat in all leading social media companies,” he wrote.

It doesn’t help that many big names are still active on Twitter, Michael Wolf, CEO of Activate Consulting, a tech consultancy, told CNBC on Wednesday.

“They’ve got those influencers who are 10% of the user base of Twitter who account for 90% of all the tweets, and those people aren’t moving so quickly,” Wolf told the network.

But if some of those big names move, Threads could light up, Brian Wieser, a strategic financial analyst, wrote on Substack.

“It’s as simple as that: if an Instagram user with a large number of followers such as a Kardashian or a Bieber or a Messi begins posting on Threads regularly, a new platform could quickly thrive,” wrote Wieser.