Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Social media is famously hard to quit. One of the technology sector’s hottest start-ups thinks it has a solution. Bluesky, a near facsimile of Elon Musk’s X, has set out to build a social networking site where letting users defect to rivals isn’t just a risk — it’s the point.
Bluesky started as a project within then-Twitter, until it was spun out in 2022. That heritage shows, from the blue logo to the feel of its digital shopfront. Many of its 25mn users — a number that has nearly doubled since November’s US election — have joined to distance themselves from Musk, whose ownership of X is now one of its defining features.
The premise of Bluesky, though, is different from its progenitor’s. It was created to be a decentralised social network, where users’ posts and connections aren’t governed by a single company but are instead dispersed around the internet. The servers and apps that share Bluesky’s common protocols are collectively labelled “the atmosphere”. Whereas X builds a wall around its users’ accounts and data, Bluesky does not.
That means a user can theoretically take their Bluesky presence to any other app set up to accept it. Anyone with the time and inclination can use its open-source toolbox to create their own alternative platform with different features or moderation rules, and users can move freely between them. Bluesky calls this a “credible exit”. It’s like moving house, and finding your furniture already arranged, your friends notified and your mail automatically redirected.
It all sounds great for the user. In practice, the catch is that this whole idea is new, so Bluesky’s app is more or less the only game in town. Posters can host their data on their own server rather than Bluesky’s if they choose, but most don’t, because it’s a hassle. Credible exit thus remains mostly theoretical. Facebook owner Meta Platforms is also toying with a similar concept for its X-like Threads service, called the fediverse.
Even great ideas don’t always make great business models. Bluesky is designed not to trap users in a gilded cage — but investors like gilded cages because they’re easier to monetise, as Meta’s $1.6tn market capitalisation shows. With punters free to move around, milking them for revenue becomes substantially harder, especially since chief executive Jay Graber has pledged not to “enshittify the network with ads”.
The lack of a cogent path to sizeable profit isn’t a problem for now. Bluesky has raised a mere $36mn in external capital, according to Crunchbase, one-third of it from Twitter. It’s also lean, with around 20 full-time employees. That can’t last: Twitter had 7,500 workers by the time Musk bought it in 2022. Graber is doing an admirable job of putting users first, but the next cadre of financial backers will want to know she can do that without putting them last.
Read the full article here