The move may take advantage of volatility in the social media industry, given X’s issues and questions about TikTok’s future
Meta will be “closely monitoring this test before scaling it more broadly, with the goal of getting ads on Threads to a place where they are as interesting as organic content,” Mosseri wrote on the platform.
It’s not clear what the revenue potential for Threads will be long-term, but the service will benefit from Meta’s existing pool of advertisers and its ability to hyper-target messages to specific consumers. Twitter never succeeded in building the kind of massive advertising business Meta has achieved with Facebook and Instagram. At its peak in 2021, Twitter revenue was US$5.1 billion. Meta’s global revenue in 2024 is estimated to be about US$163 billion, so Threads will likely be a small part of the company’s business for some time.
The move may take advantage of volatility in the social media industry, given X’s issues and questions about TikTok’s future, said Jasmine Enberg, an analyst at Emarkerter. Still, Meta’s recent decision to abandon content moderation in the US may cause some hesitancy among advertisers, she said.
“The timing will likely be questionable for many brands, who may no longer view Threads as a safer alternative to X,” Enberg said. “Many users are also already skeptical about Meta, and the launch of ads on Threads is likely to elicit backlash.”
Meta has been enthusiastic about growth prospects for Threads. Its user base has been increasing, particularly in the U.S. and Japan, which are among its key markets, chief financial officer Susan Li told investors during an earnings call in October.
Earlier on Friday, Zuckerberg said in a Facebook post that Meta would invest as much as US$65 billion on artificial intelligence-related projects in 2025. Projected capital expenditures for this year are more than double the capital expenditures in 2023. Meta is scheduled to release fourth-quarter results on Jan. 29.
Meta shares gained 1.9 per cent to US$648.54 at 1:30 p.m. Friday in New York. The stock had gained 65 per cent in the past 12 months through Thursday’s close.