Meta vs Twitter, and vice versa

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Meta has decided to issue a direct challenge to Twitter, but Twitter apparently wants to respond with a complaint. 

It all stems from the launch of Threads, Instagram’s new microblogging app that looks like a copy of Twitter. 

Meta, whose celebrated co-founder is Mark Zuckerberg, owns Instagram as well as Facebook and WhatsApp. 

Twitter’s possible lawsuit against Meta

The American newspaper Semafor today revealed that Twitter is threatening legal action against Meta for “poaching” former employees and copying its platform. 

They have in fact learned of a letter sent to Meta and Mark Zuckerberg by a Twitter lawyer, Alex Spiro. 

Spiro in this letter explicitly accuses Meta of systematically and wrongfully misappropriating Twitter’s trade secrets and infringing on its intellectual property. 

The accusation is based on the fact that over the past year Meta has hired many former Twitter employees who were aware of the company’s corporate secrets, effectively appropriating them. 

It is worth noting that from October 2022 onward, i.e., since Elon Musk took over, Twitter has actually laid off many thousands of employees, but also Facebook over the same period has greatly reduced its workforce. 

So while on the one hand it laid off many people, on the other hand it hired some former Twitter employees. After a few months it launched a direct rival to the famous microblogging platform. 

In fact, Spiro accuses Meta of deliberately earmarking these former Twitter employees to work on the development of the new competing app, Threads, with the specific intent of exploiting the company secrets that these former employees brought with them. 

He also threatened to sue them if they did not immediately stop exploiting Twitter’s trade secrets. 

Semafor then sought clarification from Meta, which responded that such allegations are baseless.

The direct clash

In reality, the direct clash between Twitter and Meta began when Elon Musk took over the company behind the microblogging platform. 

Indeed, from early on it became clear that Musk’s idea was to take users away from Meta’s apps, particularly Facebook first and then Instagram. 

Meta’s reaction was to try in turn to take users away from Twitter by launching a rival app. 

Moreover, a short time ago Mark Zuckerberg and Elon Musk literally dueled each other, hypothesizing a fight in the ring that should take place in the coming months. 

There is thus a direct clash, not only between the two companies and their social platforms, but also between the two leading figures of both companies. 

Nor can it be ruled out that the clash could end up landing in the political arena as well, since Musk is clearly aligned with the Republicans, while Zuckerberg seems closer to the Democrats. Next year, in fact, presidential elections will be held in the US. 

The success of Threads

Moreover, although it has not yet been made available in Europe, the new Threads app is already enjoying good success in the US. 

In just 24 hours since its launch, it had already been downloaded ten million times, and given that it is linked to Instagram it is possible to imagine that eventually there will be many more of its users. 

Instagram has over 2 billion monthly active users, which is many more than Twitter, and this actually has the potential to enable Threads to quickly challenge Twitter’s dominance in the microblogging arena. 

It is worth pointing out that the average Instagram user may not care much for text posts, since he or she is mostly used to photos and videos. 

Certainly the novelty has attracted many curious users, and will continue to do so for some time, but it seems unlikely that loyal Twitter users will abandon their platforms and move en masse to a new one. 

Twitter’s problems

For its part, Twitter has had some problems for some time now. 

First, economic problems related to very high costs and limited revenues, which the new management has inherited from the previous management. 

It is enough to mention that at the time of Musk’s purchase, the entire Twitter company was valued to be worth about $44 billion, whereas Meta, which is still publicly traded, has a capitalization of nearly $750 billion, or more than fifteen times as much. 

However, while Twitter has only one platform, Meta has three. Moreover, all three of Meta’s individual platforms have many more active users than Twitter. 

Twitter’s new management, however, seems to have succeeded in curbing the crazy spending, while it does not yet seem to have succeeded in achieving significant results on the revenue side. However, according to Musk it should be able to break even by the end of the year. 

Twitter also has technical problems, as has recently emerged with the necessary limitation on the number of visible tweets, but in this respect, Meta’s platforms have even more. 

Probably Twitter’s main competitive disadvantage against Threads is the size of its user base, since Meta’s new app can leverage the huge one of Instagram. 

Who will win the showdown between Twitter and Meta?

XTB’s Chief Market Analyst Walid Koudmani points out that over the years several initiatives have already been launched that sought to compete directly with Twitter, but Twitter has always resisted. 

However, for Threads the situation is different, because Meta is a huge company and has enormous resources. It also already has a lot of experience in the field, and it can focus on cross-platform integration. 

Koudmani also points out that Twitter and Facebook went public at about the same time, but Facebook (now Meta) has shown slightly higher compound annual growth over time: 56% compared to Twitter’s 54%. 

Moreover, this is not the first time Meta has launched a new service that directly challenges an existing competing app, such as when it challenged (and won) Snapchat with Stories on Instagram. Recently it challenged TikTok with Reels, but in this case it did not win. 

According to Koudmani, there is a significant possibility that Threads by Meta could pose a major threat to Twitter, given that Meta has the means and expertise to make Threads a successful app, and given that it has already proven over time that it can make other people’s ideas work. 

Moreover, the fact that the new app was launched during a time when Twitter is struggling will only increase its chances of success.