Zuckerberg burned billions on a Metaverse nobody wants only to strike gold with a cheap Twitter clone

Over the past few years Meta, the parent company of Facebook and Instagram, plowed more than $39 billion into its Reality Labs division to build a "Metaverse" interactive virtual reality environment that has received universal derision and not yet launched. It also relatively capitalized on the chaos of Elon Musk's ownership of Twitter and built a clone of the micro-blogging social network on top of their Instagram which it turns out that… everybody likes Threads. Go figure.

Facebook founder and Meta CEO Mark Zuckerberg has been singularly focused for years on building the Metaverse, a fully interactive virtual reality environment that he touted as the next huge thing for Meta and the world. He justified the tens of billions of dollars of losses racked up by Reality Labs as an investment in that would net a billion users by the end of the decade. Facebook purchase Oculus nearly a decade ago and has iterated repeatedly on the Quest VR headset, producing some impressive hardware over the years.

But they still have nothing to show for it, and Zuckerberg's attention seems to have wandered away from what he used to think was going to be Meta's next great chapter. The glimpses that Meta has shown of what it's like inside the Metaverse have not exactly been inspiring, leading to frequent mocking by pundits and potential customers alike — especially for how much it's cost Meta to get to the point of having relatively basic avatars in a rather cheap environment. It was news when they gained limbs.

The bigger problem that faced Zuckerberg's efforts with the Metaverse was one of purpose. Meta could not clearly articulate why it needed to exist or why people would want to spend time using it. There was never a "killer app", or even a "that looks like it could be fun" about the Metaverse. There are some things in VR that are useful and fun, but a virtual environment to hang out with my friends and go to work through that I can only access if we all buy a headset from Meta? If Zuckerberg cannot clearly articulate a reason why anybody would want that, how can I?

And so, after taking $40 billion and lighting it on fire, losing the faith of investors, and simultaneously blowing up $800 billion in shareholder value, Zuckerberg seems to have moved on. He now speaks very little about anything Metaverse and pivoted hard into AI in response to the popularity of ChatGPT. Meta has quietly buried references to the Metaverse on its homepage, focusing instead on its existing Quest VR products and the things that they actually can do today instead of the aspirational ideal of the Metaverse.

Meta isn't alone in throwing billions of dollars at a VR/AR system without a clear vision of why — even Apple isn't really sure why it is doing this.

To be clear, Meta could still deliver an impressive product in the Metaverse. There has no doubt been a lot of behind-the-scenes work to build something that can deliver at the scale that Zuckerberg aspired to and perhaps less attention paid initially to the user-facing side of the product. And Zuckerberg's new AI-centric ambitions also will not be cheap. Meta's stock price has recovered over the past year as Zuckerberg spends less of his public focus on Metaverse, though Meta is still pouring billions of dollars per quarter into that money pit.

And then just yesterday Meta launched Threads to a raucous response from users and the press.

Unlike the Metaverse, Threads is easy to explain.

Unlike the Metaverse, Threads is something that people actually want.

Unlike the Metaverse, Threads doesn't elicit knee-jerk mockery about how bad it is for how much was invested in it.

Unlike the Metaverse, Threads is a product I can actually use today.

Threads has a lot going for it. From a design standpoint, it's pretty simple. It's effectively a clone of Twitter's basic functionality, but with a more Instagram-like feel to it. To anybody that's used Twitter before, it's a very familiar layout and use experience.

Threads also has a huge built-in advantage in being built on top of the Instagram accounts system. There are already more than one billion Instagram users, and the launch of Threads proved hype-worthy enough that it's already passed 30 million users and over a hundred million posts. It's still very early days and it's not clear that they hype will pan out, but it's clear that users are interested. Overall, Threads is not a complicated product, but it is good, somewhat enjoyable to use, and very accessible.

Post by @zuck

View on Threads

It's also worth noting the elephant in the room that made a successful launch of Threads possible: Elon Musk's controversial and chaotic leadership of Twitter. Since his temperamental purchase of Twitter in October 2022 the site has been plague by outages, glitches, and sudden and unpopular changes that have disillusioned and driven away many users. While some have migrated to Fediverse platforms like Mastodon, many begrudgingly stuck with Twitter or gave up on short-form social media altogether.

It is impossible to look at the launch of Threads this week as anything other than opportunistic. While Twitter was struggling to find its way before Musk's purchase, his turbulent management of Twitter provided the opening for another company to capitalize on the demand for a short-form text-centric social network. Meta, with all of its expertise and existing users, was far better positioned to take advantage than the more nerdy and obtuse Mastodon could hope for.

The launch of Threads comes just days after Musk broke Twitter by instituting surprise rate limiting under the guise of cracking down on AI scraping, as if training a bot on the schlock posted to any social media network is a good idea. I wouldn't be surprised if the launch of Threads was deliberately moved up to take advantage of the recent negative coverage of Twitter, and given the excited response that Threads has seen in its first day that seems to have been a smart move.

We are just one day into Threads and there are a lot of unanswered questions and feature gaps to address. Will Instagram users take to using Threads, or will it be composed more of Twitter users looking for an alternative? Will an API be made available for publishing tools can be built to plug into Threads (a feature that Twitter recently killed)? Are DMs or chat coming to Threads? How will integration with the ActivityPub protocol that powers Mastodon work? What will the Threads experience be like with 100 million, 500 million, or even a billion users?

But one thing is clear: a lot of dedicated Twitter users are open to an alternative, and Meta's cheap-and-simple Twitter-built-on-Instagram option is proving to be far more exciting for far more people that the expensive blunder that is the Metaverse.