Twitter’s Challenges Heat Up as Meta Prepares Rival App

Twitter’s challenges escalated, as competitors capitalized over the holiday period on user frustration with Elon Musk’s decision to limit how many tweets users of his platform can see.

The biggest competitive threat emerged from Meta Platforms, which tipped plans to launch a Twitter rival on Thursday dubbed Threads. The “text-based conversation” app’s arrival comes on the heels of upstart social-media companies Bluesky and Spill being inundated with new interest over the weekend as Twitter began the unusual step of limiting the number of posts its users could read.

The colliding forces raise the pressure on Musk and his efforts to reinvent Twitter while rivals try to pick away at the core of his business. Since buying Twitter, which suffered years of losses before Musk took over, he has faced a string of largely self-inflicted dramas in his bid to remake the social-media platform, including the departure of many of its advertisers.

The latest commotion came late last week when Twitter capped the number of posts users can read on its platform, prompting widespread complaints and multiple efforts by the company to explain and adjust the policy. In the hours after the policy, Musk on Saturday twice increased the number of allowed posts, which differed for subscribers and nonsubscribers, and suggested the temporary move was needed to fight companies trying to scrape Twitter’s data for developing artificial-intelligence programs.

On Tuesday, Twitter issued a statement offering additional explanation. It said the move was an effort to remove spam and bots from the platform that were both scraping Twitter data to build AI models and “manipulating people and conversation on the platform in various ways.” 

The statement said Twitter had to make the move without warning because: “Any advance notice on these actions would have allowed bad actors to alter their behavior to evade detection.” It said only “a small percentage of people using the platform” were affected by the restrictions. “As it relates to our customers, effects on advertising have been minimal,” the company said. 

Meta Platforms Chief Executive Mark Zuckerberg clearly sees an opening in the tumult at Twitter. Threads, which Meta has been planning for months, will be launched under the umbrella of photo-based social-media site Instagram, which is increasingly looking like the Swiss Army knife in Zuckerberg’s toolbox. 

Popular among younger users, Instagram has been used by Meta to launch a Snapchat competitor in 2016 with the Stories feature and a TikTok rival in 2020 with the Reels feature. 

Now, Meta is betting Instagram users will help quickly populate Threads, a new stand-alone app that will let users keep their Instagram usernames. 

“I think Meta will incrementally grow ad revenue through expanded engagement onto Threads from Instagram users, but I don’t know that this will represent meaningful growth,” said Eric Seufert, general partner at venture-capital fund Heracles Capital, which focuses on the mobile ecosystem.  

What might be incremental to Meta’s $100 billion-plus in annual revenue could be material to Twitter if Threads can siphon away spending from the Musk platform’s advertisers. 

In 2021, Twitter recorded about $5 billion in revenue, mostly from selling ads. Musk has suggested that figure dropped to $3 billion in 2022. 

Since taking control eight months ago, Musk has been racing to reinvent the platform—building out a subscription business and emphasizing video, among other moves—with ambitious goals of turning it into a so-called super app at the center of users’ lives with the promise of new features such as digital banking services. 

His efforts have been complicated by financial challenges from the pullback in ad spending from brands concerned over the initial drama at Twitter under his leadership and an industrywide pullback in spending.  

Twitter’s finances were made all the more shaky by the terms of Musk’s $44 billion deal to acquire the company, which saddled it with large debt payments. To avoid bankruptcy, Musk has said, he had to slash spending dramatically—including cutting and pushing out roughly two-thirds of the company’s workforce, adding to the sense of uncertainty at the San Francisco-based company. 

Musk has said that most advertisers have returned or will be returning, though Twitter’s global ad revenue in the start of the second quarter was down about 40% compared with a year ago, The Wall Street Journal has reported. 

His tenure has further been marked by a string of service glitches that hark back to the early days of the platform when it was still figuring things out and the site would often go down.

Taken together, Twitter users are on edge. “The recurrent pattern in Elon’s twitter interventions: when something breaks, no one knows if it’s a bug or a decision,” Benedict Evans, an independent industry analyst, said on Twitter this week. 

The tweet limits uproar was followed Monday with Twitter’s announcement that its popular free TweetDeck tool, which lets users see multiple panels of tweets at the same time, would be temporarily unavailable and in 30 days would be accessible only to subscribers.

Limiting users’ use of a platform is a tough business proposition for a company that aims to keep users engaged as much as possible. Musk has said his goal with Twitter is to maximize “unregretted” user-minutes on the platform.

“It’s how much human attention are you worth,” Musk said at a conference early this year. “The really profound thing is what Twitter has is roughly 130 million hours of the smartest, most influential people on earth—every single day. There’s nothing else that has that. There are social networks that have more users but they don’t have the smart, influential people.” 

To improve his ad business, Musk has hired former NBCUniversal advertising chief Linda Yaccarino to be Twitter’s CEO. She began last month. 

On Tuesday, she commented on the weekend changes. “When you have a mission like Twitter—you need to make big moves to keep strengthening the platform,” she said in a tweet. “This work is meaningful and ongoing.”

While Musk’s recent moves have been heavily criticized, he appears to be gambling that the strength of Twitter’s network can continue weathering such interruptions. Bluesky, for example, may have gained new followers in recent days but many were using the platform to post about…Twitter.

—Salvador Rodriguez and Alexa Corse contributed to this article.

Write to Tim Higgins at [email protected]