Meta Platforms Makes Waves with New Ads on Threads and Antitrust Trial
Meta Platforms (META) is in the spotlight with significant updates on multiple fronts. The company is preparing to launch advertisements on its Threads platform beginning next year. At the same time, the FTC (Federal Trade Commission) is set to challenge Meta in a court trial regarding its acquisition of Instagram and WhatsApp. The trial date is yet to be announced. Below, we delve into both updates in detail.
Meta to Begin Advertising on Threads
Starting in early 2025, Meta’s Threads, a text-based messaging platform, will introduce advertisements, according to The Information. A small team from Instagram’s advertising division is already working on this initiative. Initially, only a select group of marketers will be allowed to publish ads on Threads come January.
Currently, Threads lacks monetization features, but introducing advertisements could pave the way for future revenue growth. Meta continues to enhance the platform with new features to draw in more users. As of October, Threads had attracted 275 million active users since its launch in July 2022, positioned as a competitor to Elon Musk’s X (previously known as Twitter). Meta’s efforts have successfully lured users from X, and advertisers may follow suit, especially given concerns around the type of content often displayed on Musk’s platform.
Moreover, given Musk’s potential political ties and his appointment prospects in a new government role, changes might be ahead for companies under his purview, including X.
Meta Faces Antitrust Trial Over Major Acquisitions
Meta Platforms finds itself heading into a trial linked to an FTC antitrust lawsuit, following its failed attempt to dismiss the case from 2020. Judge James Boasberg in Washington recently rejected Meta’s motion to end the litigation. The FTC claims Meta engaged in anti-competitive practices by overpaying for Instagram and WhatsApp in 2012 and 2014, respectively.
The FTC is seeking a breakup of what it terms Meta’s “Family of Apps,” arguing that it holds an unfair monopoly in the social media landscape. The judge has also ruled that Meta cannot claim its acquisitions strengthened its competition against major players such as Apple (AAPL) and Alphabet’s (GOOGL) Google.
Meta contends that the FTC’s case does not acknowledge the competitive presence of platforms like TikTok, YouTube, X, and Microsoft’s (MSFT) LinkedIn. The company expresses confidence that it can demonstrate how these acquisitions have actually fostered competition and benefited consumers. This case represents a prominent example of regulators scrutinizing the dominant power held by a few tech giants.
Is META a Smart Investment Choice?
Wall Street analysts remain positive about Meta stock. According to TipRanks, META has a consensus rating of Strong Buy, with 41 Buy recommendations, three Hold ratings, and one Sell rating. The average price target for Meta Platforms stock stands at $661.55, suggesting a potential upside of 14.1% from current levels. Year-to-date, META stock has seen a significant rise of 64.4%.
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