Bluesky Capitalizes On X Woes With Funding And User Growth

Bluesky says it has hauled in more than 13 million users, up from about three million when it opened to the public in February 2024.

Word of user growth came late last week, accompanied $15 million in financing. This should help keep the lights on while the nascent social media network, which appears to have disavowed advertising, develops a subscription-based business model "for features like higher quality video uploads or profile customizations like colors and avatar frames."

The Bluesky team offered reassurance that the basic service will remain free to use, wrapped in what might be taken as a jab at more fee-focused social media firms.

"Bluesky will always be free to use — we believe that information and conversation should be easily accessible, not locked down," the biz said. "We won’t uprank accounts simply because they’re subscribing to a paid tier."

Rival social media service X, known as Twitter until it was bought in 2022 by a wealthy immigrant from South Africa who reportedly promotes anti-immigrant conspiracy theories, prioritizes content from paying subscribers. The biz had about 251 million global daily active users during calendar Q2, according to The Financial Times.

Bluesky's rapid rise can be attributed in part to missteps by those managing X. In September, 2023, Bluesky saw a signup surge in the wake of word that X might start charging users to post. When X's de facto exec beefed with Brazil's Supreme Court, leading to the temporary shutdown of X in Brazil, Bluesky picked up the pieces in the form of 2.6 million new users in about a week.

Also Bluesky has signaled its interest in content moderation while X has done the opposite, according [PDF] to the Center for Countering Digital Hate (which was unsuccessfully sued by X). With X limiting the extent to which users can block content and Bluesky supporting broad blocking capabilities, it appears that Bluesky is winning some people over.

With the release of X's first transparency report [PDF] in September, X now appears to be removing more content than Twitter did under its prior leadership. However, there's some skepticism about the reported numbers, the low rate of child safety removals, and the surge in spam posts.

In any event, Bluesky has the opportunity to avoid the missteps of its progenitor – it was initially funded by Twitter as an open, decentralized social media protocol that Twitter would support. That protocol is known as the Authenticated Transfer (AT) Protocol.

• Hugging Face puts the squeeze on Nvidia's software ambitions
• San Francisco billboards call out tech firms for not paying for open source
• Just how private is Apple's Private Cloud Compute? You can test it to find out
• Perplexity AI decries News Corp's 'simply false' data scraping claims

There's an older open, decentralized social media protocol known as ActivityPub, developed under the auspices of the World Wide Web Consortium (W3). ActivityPub, the basis of what's known as the Fediverse, is used by the decentralized Mastodon social network and by Meta's Threads, among others.

The idea of a federated system that's decentralized and not controlled by any single entity is not new. The web and the internet are both decentralized systems, though not immune to government meddling and private sector market power. Yet the notionally decentralized web has come to be dominated by a few large tech platforms with social media and advertising businesses, and now even the inventor of the web wants to try again.

The techno-libertarian fantasy of decentralization has been an aspiration since the web took shape in the early 1990s. And like the "Year of Linux on the Desktop" meme, which is always predicted to arrive a few years later, the decentralized Fediverse can be expected to remain just over the horizon.

Henrique S. Xavier, a data scientist with the Brazilian Network Information Center (NIC.br), the non-profit administering the .br domain, published a paper in August that examines the Fediverse's decentralization aspirations and found that the Fediverse on its own is unlikely to overthrow the dominance of a handful of tech platforms (which, as exemplified by Meta's Threads, are already building bridges to the decentralized ecosystem).

"Our preliminary analysis indicates that while the Fediverse has the potential to reduce (though not eliminate) centralization compared to non-federated social media and can foster communities tailored to the interests of the individual … it faces significant challenges in achieving a more even distribution of users and traffic across the social web on a large scale," Xavier wrote. "In essence, the Fediverse may address the needs of specific individuals and provide suitable local environments, but it is unlikely to disrupt, by itself, the dominance of for-profit web oligopolies."

Pointing to challenges like financial sustainability, the risk of commercial capture by Big Tech, persistent FOSS maintenance concerns, and the difficulty of content moderation at scale, Xavier argues that "techno-romantic tropes" are not enough.

The Fediverse, he contends, needs to attract support from institutions, to have some means to coordinate large-actions, to deal with power imbalances, and to make evidence-based decisions that support the community. That may require legislation to limit for-profit social media platforms, funding, and – dare we say – the centralized guidance and evangelism of a benevolent, accountable non-profit organization.

A few years ago, Mozilla might have applied for the position, but now with its interest in advertising, perhaps not.

Even if the Fediverse remains a profit-starved dream about re-decentralizing the internet, Bluesky could still prosper. All it has to do is please its 13 million users, attract more on a regular basis, and keep the spammers, scammers, bots, trolls, and propagandists at bay while upselling a portion of its users on premium services.

Yet Bluesky is doing so in a different environment to the one that spawned Twitter, one where generative AI has yet to be reckoned with. The predatory harvesting of social media content to create models that commodify the work of authors, musicians, video makers, and artists, that increase the competition for audience attention, is a profound disincentive for creative professionals to post anything on social media. Absent guarantees that public social media posts won't be scraped to fuel some tech firm's AI subscription API, participating in any social media service looks like an exercise in self-harm. The only winning move is not to play.

That's not to say Bluesky is doomed; its upward trajectory may continue for some time – not everyone cares whether their clicks and keystrokes will be repurposed for profit. And that's fine. Bluesky is not trying to become what Twitter once was, the world's reply-all channel, for now at least. ®