Will rebranding Twitter give Elon Musk the X factor? I wouldn’t bank on it | John Naughton

Elon Musk, the wealthiest manchild on the planet, has decided to alter the title of his beloved plaything. From now on, Twitter shall be referred to as X. Interestingly, however, you can still access twitter.com and receive an invitation to share your thoughts. This is a humorous moment that has unfortunately been disregarded. Rather than the chancellor proclaiming that he expressed his worries about the public sector borrowing requirement to the prime minister through a tweet, he could playfully state that he "X'd Rishi" on the subject. What a missed opportunity!

So what's the deal with Musk and X? Well, let's start from the beginning - way back in 1999. Musk created X.com, an unconventional online bank. Instead of charging fees or penalties for overdrafts, customers received a pleasant surprise. By simply opening an account, they were given $20 for free. Additionally, for every contact they referred who signed up, they received a $10 bonus. Musk disregarded the traditional banking practice of knowing your customer, according to Max Chafkin, the biographer of PayPal co-founder Peter Thiel. Musk boasted to CBS News that it was easier to get a line of credit at X.com than it was to create an email account. The entire process could be completed in just two minutes, and the funds would already be in the account. As expected, within two months, X.com had amassed over 200,000 users. Some of these users even provided fake addresses and immediately started writing checks that eventually bounced.

Musk has been involved in the finance industry for quite some time now. Back in March 2000, X.com acquired Confinity, a smaller startup founded by Thiel, which had introduced PayPal as an electronic money transfer service. With Musk as its CEO, X.com emerged as the new company. However, while Musk was enjoying his honeymoon in Australia in September 2000, the board decided to terminate his position and appointed Thiel instead. Subsequently, in June 2001, X.com underwent a name change and became PayPal.

Maybe the rebranding of Twitter as X is a subtle way of retaliating against Thiel for his betrayal two decades ago. Revenge, they say, is best served cold. However, this revenge plan seems to be quite costly. Musk shelled out $44 billion for Twitter (with around $20 billion coming from his own pocket), only to treat it like a wrecking ball. So, what was his purpose in making such a hefty purchase? Matt Levine, a seasoned observer at Bloomberg, wonders the same. "Musk wasn't interested in Twitter's employees (whom he fired), its code (which he regularly destroys), its brand (which he abandoned), or its loyal users (whom he's actively pushing away). He simply wanted a completely different platform similar to Twitter. Couldn't he have built that for less than $44 billion? Mark Zuckerberg did!"

Indeed. However, taking into account the cautionary principle that someone with a track record of successfully building two strong companies (Tesla and SpaceX) may possess valuable insight, it is worth considering what their intentions might be with regards to Twitter. One compelling theory harkens back to their early experience in the online banking industry. For instance, the Wall Street Journal recently highlighted comments made by Twitter's newly appointed CEO, Linda Yaccarino, regarding the inclusion of audio, video, messaging, and banking features within the platform. The article also referenced previous statements made by Musk regarding X.com, which he referred to as an "everything app," and his vision of transforming it into the largest financial institution globally. In essence, this vision aligns with the concept of WeChat in China, an application utilized for various purposes ranging from messaging to mobile payments to business-related services.

As per usual, the vast army of Musk fans, numbering close to 150 million, believe that this is further proof of their idol's brilliance. However, impartial observers question what he could possibly be smoking. For instance, Ben Thompson, a reputable US technology and media analyst known for his tech business strategy platform called Stratechery, finds the notion of a WeChat-like platform absurd. In his newsletter, he points out that WeChat emerged in a nation undergoing its initial digitization process, mainly through smartphones. This meant that WeChat faced no competition from established websites, traditional banking systems like credit cards, or alternative social networks. Twitter and other platforms exist within a specific context, making the idea of replicating WeChat inaccessible to them, especially considering the company's limited resources, which are already stretched thin to merely keep the company running.

If that's an accurate evaluation, then Musk is indulging in wishful thinking - the belief that things will materialize if you desire them strongly enough. However, he may be realizing that he cannot eliminate Twitter, simply because the world requires something like it. And Meta's Threads is not the solution. It initially gained popularity, but according to the Wall Street Journal, its number of users who engage daily has decreased by almost 70% (from 44 million to 13 million). Additionally, the average time spent on the platform per day has shrunk from 19 minutes on its launch day to just four minutes. On the other hand, Twitter still boasts over 200 million active daily users, spending an average of 30 minutes on the platform each day. As my late mother would say: "It's difficult to eradicate something that is inherently flawed." This holds true, even for someone like Elon Musk.

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