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Engagement settles lower

Active users on the new app declined by 50% from 49 million on July 7th to 23.6 million on July 14th, according to a new report by SimilarWeb. That means only a quarter of the platform comes back to check and interact on the app every day. Even Mark Zuckerberg admitted that the number of people returning to the app is in the “tens of millions.”

This means that the so-called “Twitter killer” still has plenty of work ahead of itself. Twitter is a private company that doesn’t release these numbers publicly, but the latest figures from the company’s last earnings report suggest the daily active user base stood at roughly 238 million. According to Elon Musk, that number has surged to 259.4 million recently.

Effectively, Threads has only 10% of the daily active users of its biggest rival. However, that doesn’t necessarily mean Musk will get the last laugh.

More: Elon Musk on the state of commercial real estate

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Why Twitter should be worried

There is evidence to suggest that rivals like Threads are seeping users and engagement from the legacy social app. Web traffic to Twitter was down 5% within the first two days of Threads being launched, according to data from SimilarWeb. Although this has recovered a little since then, traffic is still 11% lower year-over-year.

The fact that a rival app captured 10% of the user base within weeks should also be a concern. Zuckerberg has a track record of successfully scaling social media platforms — Facebook, Instagram, and Whatsapp each boasts billions of daily active users.

Elon Musk recently admitted that Twitter’s revenue had dropped 50% while the company was cash flow negative due to a “heavy debt load.” Musk’s decision to scale back content moderation may have scared off advertisers, according to a Bloomberg report. Researchers have seen a significant uptick in hate speech and violent content on the site in recent months.

Billionaire entrepreneur Mark Cuban mocked Musk on Twitter by saying “Go red, no bread,” while retweeting Musk’s announcement about revenue declines.

Cuban has been a vocal critic of Musk’s policies ever since he took over the social media brand last year.

“Who he supports or denigrates is the Twitter equivalent of State intervention. He owns the platform, he can do what he chooses,” he said in a tweet earlier this year. “But it’s disingenuous to say Twitter is the home of free speech when he chooses to often put his thumb on the scale of reach.”

Cuban is an active user of both Threads and Twitter.

More: Compare the best investment apps


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About the Author

Vishesh Raisinghani

Vishesh Raisinghani

Freelance Writer

Vishesh Raisinghani is a freelance contributor at MoneyWise. He has been writing about financial markets and economics since 2014 - having covered family offices, private equity, real estate, cryptocurrencies, and tech stocks over that period. His work has appeared in Seeking Alpha, Motley Fool Canada, Motley Fool UK, Mergers & Acquisitions, National Post, Financial Post, and Yahoo Canada.

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