Elon Musk changed the name. Linda Yaccarino tried to explain it. Nothing substantive changed.
Elon Musk, the mercurial owner of Twitter $TWTR, announced overnight that he is changing the platform’s name and logo to “X.” In doing so, he’s throwing away the brand name, the bird logo, and maybe even the verb “tweet,” all of which breathe financial value into the company he has bought, stripped, and suffocated.
The New York Times reports that Musk spent Monday projecting the letter x in the cafeteria and rechristening conference rooms with names like “s3xy” and “eXposure.”
Indeed, Musk is nothing if not a performer. In that context, this sudden, inartful rebranding can be easily understood as a blatant publicity stunt to distract from the fact that the company, in his clutch, is struggling. Musk overpaid for Twitter, loaded the company with debt, laid off most of its employees, scared away advertisers, and monomaniacally—and quite unsuccessfully—pushed users to pay $8 a month for formerly free features.
The rebranding is very much in the tradition of don’t-look-there-look-over-here corporate marketing. But whether it even succeeds at that is questionable.
The “X” branding adds nothing substantive for investors or outsider critics to scrutinize, but it does lend an air of mystery and intrigue to the Musk cult of personality that has long imbued value into his enterprises. X is the suffix of his space company, SpaceX; the namesake of Tesla $TSLA’s Model X car; the moniker for X Corp., Twitter’s new parent company; the name of X.com, his online bank from the 1990s that later became PayPal $PYPL; and part of the name of one of his children, X Æ A-12.
Now, in deciphering what Musk wants out of Twitter, X is most useful as a stand-in for the billionaire’s stated ambition to turn Twitter into “X: the everything app,” though has not taken any noticeable step toward that since buying the company last year.
Musk wants Twitter to resemble WeChat, the Tencent-owned super-app that dominates China’s mobile internet. But any effort to build a super-app in the US would run head-first into prohibitive policies and large fees from Apple $AAPL and Google $GOOGL, the two effective controllers of the mobile app economy. Musk would likely have to pay each tech giant 30% of any in-app revenues.
Renaming Twitter doesn’t get it any closer to becoming a super-app. People still flock to Twitter to do one thing: talk to one another. And that’s exactly what Musk has messed with in recent weeks, creating a dual-class system that separates paying and non-paying users. Coughing up $8 a month now gets users increased visibility in tweet replies, lets them see more tweets in a day, and allows them to send more direct messages. Because Musk cannot play nice with advertisers, who traditionally subsidized the free experience of Twitter, he’s now making users directly pay for core features that they’ve grown accustomed to using for free.
Musk’s main attempt to court advertisers came through hiring: He named former NBC executive Linda Yaccarino the CEO of Twitter.
Yaccarino’s role is to make Twitter look more legitimate to advertisers and the broader business community. But did her tweets on July 23 about the rebranding accomplish this? Let’s examine the evidence.
Tweet from Yaccarino:
It’s an exceptionally rare thing – in life or in business – that you get a second chance to make another big impression. Twitter made one massive impression and changed the way we communicate. Now, X will go further, transforming the global town square.
Our take: Companies can always rebrand themselves, whether through name changes or new logos. This actually isn’t Twitter’s first rebranding. The company’s name originally was the vowelless “twttr” and the logo was green. The Twitter bird, originally named Larry, also changed form over the years. We’re not sure how the global town square gets transformed by an X, but let’s see what else Yaccarino has to say about that.
Tweet from Yaccarino:
X is the future state of unlimited interactivity – centered in audio, video, messaging, payments/banking – creating a global marketplace for ideas, goods, services, and opportunities. Powered by AI, X will connect us all in ways we’re just beginning to imagine.
Our take: Yaccarino’s vision of “unlimited interactivity” rings hollow here, as Musk has only limited interactivity in recent months. He’s prioritizing paid users in replies, while imposing limits on viewing tweets and sending direct messages. He hasn’t changed anything in terms of audio (Twitter Spaces predates Musk), video (except allowing paid users to post longer videos), or messaging (except limiting it), and doesn’t currently have any payments or banking infrastructure (though it registered with the US Treasury Department to start processing payments). Twitter has no e-commerce elements, either, and Musk in any case has hurt the company’s rapport with many of the advertisers who might want to sell on the platform.
Yaccarino also mentions artificial intelligence (AI) but doesn’t clarify how the company will use it in the future. (It already uses machine learning in content moderation.)
Tweet from Yaccarino:
For years, fans and critics alike have pushed Twitter to dream bigger, to innovate faster, and to fulfill our great potential. X will do that and more. We’ve already started to see X take shape over the past 8 months through our rapid feature launches, but we’re just getting started.
Our take: The first part of this tweet is no doubt true. But Musk doesn’t tend to listen to critics, which is part of the reason why he’s given paid users prime placement in his replies.
Tweet from Yaccarino:
There’s absolutely no limit to this transformation. X will be the platform that can deliver, well….everything. @elonmusk and I are looking forward to working with our teams and every single one of our partners to bring X to the world.
Our take: There absolutely is a limit to this transformation. Twitter is deeply in debt and owes $1 billion annually just to service that debt. It hasn’t paid rent in many of its offices; it’s being sued by vendors for not paying its bills, and by former employees for not paying severance. Changing the company’s name doesn’t change its circumstances. But clearly Musk and Yaccarino are united in their attempts to convince the world otherwise.
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