This analysis was first published in SvD Näringsliv, in Swedish, on July 24th, 2023. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
Twitter is being renamed “X” as Elon Musk pulls his latest stunt. The choice of letter is no coincidence. But it reveals a lack of judgment at a moment when the questions are piling up — not just for Twitter, but for Tesla too.
Musk appears to have a particular fondness for the letter X — his new AI company is called “xAI,” one of his children is named “X Æ A-Xii,” and X.com was the name of the company where he was CEO in 1999. That company later became PayPal, and in 2017 Musk bought back the domain for “sentimental reasons,” in his own words.
The change is about more than just a favorite letter, though.
After a series of controversial decisions around Twitter, Musk has seen the value of his $44 billion acquisition drop by two thirds. Thousands of employees have been laid off, verified users have had to become paying subscribers, and Meta recently launched a competing product, Threads. Something needs to change.
The simplest explanation for why it is happening now comes from a famous line in the TV series Mad Men, where the main character Don Draper says in a meeting: “If you don’t like what is being said, then change the conversation.”
That is exactly what Musk is doing. Instead of talking about Twitter’s poor performance, he shifts the world’s attention to the relaunch of X.com.
The company’s newly arrived CEO, Linda Yaccarino, writes that the new product will incorporate payments to create a “marketplace for ideas, goods, services, and opportunities.”
That sounds like a description of what is commonly called a “super app” — a place where all kinds of services are gathered in one place. China’s WeChat is a well-known example.
Turning Twitter into a Western WeChat sounds exciting enough. And already, the conversation about the future of Twitter/X has started to shift. It is a clever communications exercise, but in every meaningful sense still a cosmetic change.
Building a “super app” is not an original idea, either. But it is hard. That is why no one in the Western world has managed it.
Recently, another question has come onto the radar. It concerns not the product but the person Elon Musk — or more precisely, how he is supposed to find time for all his commitments.
During Tesla’s most recent earnings call, Musk was asked whether his newly founded AI company could come to affect Tesla and its AI ambitions. Musk replied that there are talented people who do not want to work for large, established companies, and therefore the two businesses can complement each other.
That is, to say the least, an optimistic view.
The analysts’ question hints at a worry among Tesla’s shareholders — and almost certainly the shareholders of his other companies too — about what Musk’s priorities actually look like.
Musk is a well-known workaholic, and has capable managers carrying out the day-to-day work at the companies he is involved in. But by tying himself so closely to each company, questions about conflicts of interest become unavoidable. This is particularly true in AI, an area where Tesla is investing heavily and where Twitter/X will also need to find its position.
In an ordinary large publicly traded company, the board would have put its foot down and demanded that the company’s chief representative put all his energy there. But none of Elon Musk’s companies can be considered “ordinary.” That has been part of the appeal for many around him.
The expanded ambitions for Twitter/X are yet another addition to an already hectic schedule. The risk is that Tesla’s shareholders eventually start speaking up.
Musk has, to his credit, shown an impressive touch when it comes to electric cars — and rockets.
That touch has been entirely absent, however, when it comes to media, the category that Twitter/X falls into. Since Musk took over in October last year, the service has lost almost half of all its advertising due to the constant turbulence.
Abruptly swapping out one of the company’s most valuable assets — its brand — looks like yet another chaotic change. And that is the last thing Twitter, or “X” as it is now called, needs.
