Threads continues to fail. The app that Mark Zuckerberg debuted on July 5 got off to a great start, reaching 70 million users in its first 24 hours. However, its success was short-lived. Weeks later, a report revealed that only 13 million people were using the social network on a daily basis, meaning it had lost 70% of active users.
Now, the fall of Threads continues. According to Reuters, a month after the social network that aims to compete with X (formerly known as Twitter) was launched, it lost more than half of its users. The news agency had access to a recording in which Zuckerberg, Meta's owner, explained to his investors what was happening with his new platform:
Obviously, if you have more than 100 million people sign up, ideally it would be awesome if all of them or even half of them stuck around. We're not there yet.
However, Zuckerberg was not concerned. As he disclosed during his call with investors. He considered the app's downturn to be "normal" and expected Threads to recover as the company added new features to the app such as a desktop version and improved keyword search.
These are not the only improvements Meta plans to make to Threads. Product manager Chris Cox said that among his priorities was to add more "retention-driving hooks," and new features for its other app, Instagram. In it, the priority was to "making sure people who are on the Instagram app can see important Threads," explained Cox.
Meta profits down from 2022
The improvements may not be enough to recoup the investments Meta lost this year. Mark Zuckerberg's company has earned a net $13.498 billion through June 2023, down 4.6% from the same period in 2022. Already during this period, the tech giant recorded significant drops in profits. In June 2022, Meta reported a net profit of $14.152 billion, a drop of 29% compared to the previous period.
Turning to 2023 results, the company assured in a statement that it had over $60.645 billion in revenue, up 7% from 2022. Of these, the majority came from advertising revenues. However, its expenses also increased considerably, especially due to higher costs in key infrastructure for artificial intelligence development.
Their legal expenses also increased. As the company explained in its brief, after being fined by the Irish Data Protection Commission in May, they had to increase the funds they had earmarked for legal proceedings by $1.3 billion. This sum was added to the budget they already had for legal costs, which ultimately totaled $1.87 billion. This figure is much higher than what was forecast at the beginning of the year and ultimately resulted in profits through June 2023 amounting to only $13.498 billion.
