Threads Now Has ‘Tens of Millions’ of Daily users But its Honeymoon Phase May be Over

Following its launch two weeks ago, Meta’s Twitter competitor Threads saw an impressive surge in user signups, surpassing 100 million in under a week. However, recent data indicates that the initial excitement may be dwindling as user engagement has slowed down.

According to a report by web traffic analysis firm Similarweb, Threads’ daily active users dropped from 49 million on July 7 to 23.6 million last Friday, and the average usage time plummeted from 21 minutes to just 6 minutes over the same period.

The decline in user engagement presents a challenge for Meta as it attempts to draw users away from Twitter and create a service with a broader and more sustainable user base. Threads is grappling with typical social media issues like user retention, spam, and early regulatory scrutiny related to content moderation. Furthermore, the long-term financial returns for Meta’s investment in building Threads remain uncertain.

Meta’s CEO Mark Zuckerberg remains optimistic about the Threads community and stated that millions of people are coming back daily. He emphasized that the focus for the rest of the year is to improve the basics and retention.

Meta executives acknowledged the difficulty of convincing users to stay engaged long-term after the initial signup phase. Threads launched with minimal features, leveraging Instagram’s network for an easier sign-in process.

In an effort to address some of the challenges, Threads rolled out its first batch of updates for the iOS version of the app. These updates include a translation button, a dedicated tab for showing followers, and the option to subscribe and receive notifications from accounts users don’t follow.
The app’s spam issue has also been a concern, with users complaining about spammy links and “giveaways” cluttering replies to posts. To combat this, the platform plans to tighten rate limits, which could inadvertently impact active users.

While Meta’s shares have seen a 6% increase since Threads’ launch, some analysts remain skeptical about the app’s potential to contribute significantly to Meta’s bottom line. Advertisers might be hesitant to allocate ad dollars to Threads until they are certain about user retention and engagement.

Threads could potentially supplement Meta’s core advertising business in the future, but concerns exist due to the nature of real-time news and public conversations, which may sometimes be negative or controversial.

During Meta’s upcoming quarterly earnings call, analysts will be looking for insights into Threads’ performance and any hints about potential ad rollout on the platform ahead of the crucial holiday shopping season.