Some of the greatest fight matchups in history include: 

  • Muhammed Ali vs. George Foreman
  • Evander Holyfield vs. Mike Tyson
  • Hulk Hogan vs. Andre the Giant
  • And now...Mark Zuckerberg vs. Elon Musk?

On June 20, Tesla CEO Elon Musk posted on Twitter, saying he was "up for a cage match" with Meta Platforms' (META 2.10%) founder and CEO Mark Zuckerberg. And for his part, Zuckerberg is apparently up for it as well.

Zuckerberg responded to Musk's suggestion for a cage fight by saying, "Send me location." Musk then suggested the Vegas Octagon as a venue.

Here's why the world's richest person and 10th-richest person are so riled up.

Meta and Twitter's fight outside the cage

Across its family of apps that includes Facebook, Instagram, and WhatsApp, Meta Platforms has over 3 billion daily active users. By any measure, the company is a screaming success. But not content with its accomplishments, Meta Platforms is going straight for Twitter's audience. 

In May, Bloomberg reported that Meta Platforms was launching a Twitter competitor. Then in June, The Verge was privy to an internal demonstration of the new app, nicknamed Project 92. 

During the app's demo, Meta Platforms' chief product officer Chris Cox reportedly said, "We've been hearing from creators and public figures who are interested in having a platform that is sanely run." This would seem to imply that the Twitter platform is not sanely run, in an apparent shot at Elon Musk.

In October, Musk completed his $44 billion buyout of Twitter. Some users haven't liked the various platform changes since he took over, and certain brands have suspended advertising. Nevertheless, building an app to rival Twitter won't be easy, which is something Meta investors will need to keep in mind.

For example, in the month following Musk's takeover of Twitter, rival Mastodon enjoyed surging adoption -- as reported by Wired, daily active users surged from just 380,000 to over 2.5 million. But the surge was short-lived. By January, Mastodon was back down to 1.4 million daily active users.

That said, it does appear that usage on Twitter is dropping. According to data analyzed by Kepios, Twitter went from 556 million users in January to just 373 million users by April.

Can Meta Platforms' new app replace Twitter?

Meta Platforms' desire to replace Twitter understandably irritates Musk, considering he spent $44 billion to buy it. But the Twitter versus Project 92 fight won't be settled by Musk and Zuckerberg in the ring.

Meta Platforms believes it can build a more "sane" platform to rival Twitter. Whether that's true is an entirely separate discussion. But I will point out that Meta's path to replacing Twitter isn't straightforward.

There could be truth in Cox's statement -- public figures may be looking for a different platform. However, among governments, advertisers, and the public, Meta Platforms may have work to do in building trust. Luring users away from Twitter, therefore, may not be so easy.

For example, the Irish Data Protection Commission fined Meta Platforms $1.3 billion in May for data privacy issues, a decision Meta Platforms is appealing. This is in addition to the $422 million fine it handed out in January.

If Meta Platforms is forced to make changes to its platform for privacy compliance reasons, it could make ads less effective. Moreover, some advertisers may already be frustrated with the company. A Bloomberg report from May revealed that Meta Platforms owed refunds to many advertisers because a glitch overcharged them.

Finally, investors should remember that Meta Platforms doesn't win at everything. For example, the company shut down Hobbi in 2020 -- an app that was supposed to steal Pinterest's user base. 

All this means investors should temper expectations with Meta Platforms' new project. Twitter is navigating a challenging time, and Meta is readying a rival app. But its success isn't guaranteed. Moreover, even if Meta is successful, it may take time for financial results from Project 92 to contribute meaningfully to the overall company.

Jiujitsu vs. a walrus?

In closing, Zuckerberg won a gold medal in a jiujitsu tournament back in May, a sport he recently took up. Therefore, he'll certainly put up a good fight if his cage match with Musk actually happens. And I see a parallel to Meta Platforms' business -- with three very successful apps under its belt and 3 billion users, the company will likely put up a good fight while building a Twitter competitor.

However, Musk posted on Twitter, "I have this great move that I call 'The Walrus,' where I just lie on top of my opponent and do nothing." And again I see a business parallel: With 373 million users, Twitter is a hefty platform that won't easily be pushed aside.