Photo/VCG

Nine months after shelling out $44 billion to buy Twitter, Musk did something else that “shocked” the world.

On July 24, local time, Musk changed Twitter’s name, which had been used for 17 years, to X.com, and replaced the classic blue bird logo, which had been used for 13 years, with a slightly sloppy black and white letter “X”.

It is undoubtedly a risky move to arbitrarily “erase” such a iconic brand. Some analysts and branding agencies believe that this move will cost Twitter $4 billion to $20 billion in brand value and force it to start from scratch.

Nevertheless, the tech mogul chose to “reform” for no other reason than the unfulfilled wish that had been in his heart for 24 years: to create a one-stop financial service platform. In the face of Twitter’s nearly halved advertising revenue, declining user experience and trust, and the huge compliance pressure faced by financial services, can Musk, who has created many business miracles, create a U.S. version of “WeChat”?

A “dream” buried for 24 years

When Twitter’s employees returned to the office on Monday (July 24), they found construction workers outside the building removing the huge “@twitter” and classic blue bird signs, and the names of the meeting rooms were also changed to words with X: “eXposure”, “eXult”, etc. On Twitter’s website, the classic blue bird logo was also replaced by a black letter “X”.

In response, Musk tweeted on July 25th, “In the coming months, we will add comprehensive capabilities to communicate and manage the financial world. In that context, the name Twitter is not appropriate, so we have to say goodbye to the bird.”

Twitter’s blue bird logo has been around for 13 years. Just like Google, tweeting has also become a verb in English, which is one of the most profound manifestations of a company’s brand power. However, for the capricious Musk, Twitter’s brand image was exactly what he wanted to get rid of. What he had in mind was the “X” dream that had been rooted in his heart for 24 years.

Back in 1999, Musk founded X.com. In his vision, it would be a one-stop super platform that included all financial services: deposits, online shopping, credit cards, investments, loans, etc., aiming to disrupt the traditional financial industry. But the story did not go as Musk had planned. X.com merged with Peter Thiel’s payment platform Paypal, and Musk’s insistence on naming the new company X.com was rejected. Later on, Paypal was acquired by eBay, and Musk, who made a fortune, turned his attention to space exploration and invested in Tesla. And the dream of X.com was buried in his heart.

But buying Twitter allowed Musk to restart his dream. “I can finally implement the original plan of X.com and use Twitter as an accelerator. I’m so excited.” A few days before acquiring Twitter at the end of October 2022, Musk sent a message to his biographer Walter Isaacson at 3:30 a.m. He told the latter that he wanted to turn Twitter into a combination of financial platform and social network.

Musk has expressed his longing for super apps on many occasions, and China’s WeChat is often on his lips. In May 2022, Musk said on a podcast: “I think WeChat is a good model. If you’re in China, you actually live on WeChat. It can do everything. WeChat is kind of like Twitter plus PayPal plus a bunch of other things, and it has a good user interface design. WeChat is really a good app. We don’t have such apps outside of China.”

In fact, Twitter has already started to try to cultivate a trading and content incentive system within the system. According to media reports, in January 2023, Twitter began applying for permission to trade in the United States. According to Linda Yaccarino’s tweet on July 24th, Twitter has obtained money transfer licenses in four states: Arizona, Michigan, Missouri and New Hampshire. And in terms of content, in addition to paid verification and subscription services, many "big V"s were also informed in mid-July that they could share advertising revenue from Twitter based on traffic.

Dan Ives, a famous tech stock analyst at WedBush Securities in the United States, told the NBD that “We believe the super app concept is the right long term move to emulate the WeChat model in China although this will be a long uphill battle to get there.  Losing the iconic Twitter birdie is a risky move in our opinion with X now the logo .”

Long way to go

Dan Ives’ concerns are not unfounded. Under the increasing regulatory pressure from the U.S. government on tech companies, how to build a whole set of compliant financial infrastructure from scratch, how to integrate various services without being subject to antitrust scrutiny, how to win the trust of users and advertisers, especially how to break through in the face of strong rivals such as Meta and TikTok are indeed long and difficult challenges for X.com platform.

“Lot of financial regulations to battle with Washington DC closely watching every move,” Dan Ives assessed the regulatory pressure facing Twitter.

Payment companies must be able to verify users’ identities and monitor money flows to prevent crimes such as money laundering and terrorist financing. This requires a large number of compliance personnel, especially considering that different countries have their own different regulatory requirements. Facebook once ambitiously wanted to launch a cryptocurrency project Libra, but it ended up in vain under the pressure of congressional inquiries. Musk has cut about 80% of Twitter’s staff since taking over, and spending money to recruit a large number of people seems to be inconsistent with his hiring philosophy, and Twitter’s financial situation is also difficult to support such expansion. Musk said in mid-July that Twitter was in debt, had negative cash flow, and Twitter’s advertising revenue had nearly halved.

On the other hand, since Musk took over Twitter, due to lack of manpower, relaxed platform supervision and other reasons, user experience and trust have declined significantly, making it more difficult for them to entrust their financial information to Twitter. In December 2022, Musk revealed a series of internal documents from Twitter to a group of selected journalists, making users suspicious of Twitter’s information protection. In May 2023, Republican presidential candidate DeSantis and Musk talked on Twitter’s voice platform and officially started their campaign, but the platform frequently malfunctioned during the process, users repeatedly dropped out, making Musk very embarrassed.

Talking about Musk’s management level after taking over Twitter, Dan Ives only gave a “B-” rating. “good strategy but lot of head-scratching moves.” He told the Daily Economic News.