Turning Twitter into X has ruined its brand value. Corporate brands rarely become so ingrained in everyday conversation that they become verbs.
It’s even more unusual for the owner of such a brand to announce plans to deliberately destroy it.
On Sunday, in the midst of a quiet summer weekend, Elon Musk announced that the name of Twitter would be changed to “X,” and that he would be removing the bird logo and all associated words, including “tweet.”
According to analysts and brand agencies, Musk’s move cost anywhere from $4 billion to $20 billion in value.
“It took 15-plus years to earn that much equity worldwide, so losing Twitter as a brand name is a significant financial hit,” said Steve Susi, director of brand communication at Siegel & Gale.
Musk, whose company’s value has already plummeted since he purchased it for $44 billion in October, announced the change on Saturday night.
By Monday morning, a new black “X” logo, designed over the weekend by a fan, had begun to appear across the site. Linda Yaccarino, the company’s new CEO, outlined the company’s vision for X to become a site for audio, video, messaging, payments, and banking.
Analysts and brand consultants call the product’s renaming a blunder. According to Todd Irwin, founder of brand agency Fazer, Twitter is one of the most recognizable social media brands.
Also read: Twitter Blue Bird becomes ‘X’, 10 points how Twitter changed under Elon Musk
Bird decals can be found on small businesses and websites all over the world, alongside Instagram and Facebook logos.
According to Joshua White, assistant professor of finance at Vanderbilt University, Twitter’s popularity has also made verbs like “tweet” and “retweet” part of modern culture, used frequently to explain how celebrities, politicians, and others communicated with the public.
Turning Twitter into X has ruined its brand value.
X will necessitate a complete rebuilding of the company’s cultural pull and linguistic consensus.
However, this could be part of the motivation for users to stop comparing Twitter post-takeover to what it used to be.
“It’s an exceptionally rare thing — in life or in business — that you get a second chance to make another big impression,” Yaccarino wrote on Twitter.
In recent years, other technology companies have renamed themselves. Alphabet Inc. was formed to allow different businesses within the company to grow independently of search.
Facebook renamed itself Meta Platforms Inc. to emphasize the company’s dedication to the metaverse. The product names, however, have not changed; we still google things by going to Google.
That’s a lot of money. According to brand valuation consulting firm Brand Finance, Twitter’s brand value is estimated to be around $4 billion.
The Facebook brand is worth $59 billion, and Instagram is worth $47.4 billion, according to the firm. According to Vanderbilt University, Twitter’s brand value is worth $15 billion to $20 billion, which is comparable to Snapchat.
According to Dipanjan Chatterjee, an analyst with Forrester Research Inc., brand valuation is difficult to determine, and there is no single approach, which is why estimates vary.
However, several analysts and agencies agreed that the company’s brand has already taken a significant hit since Musk’s takeover. According to Brand Finance, Twitter’s brand has lost 32% of its value since last year.
Advertisers have fled as their perception of Twitter’s brand has shifted. Advertisers were concerned about Musk’s embrace of contentious tweeters and courting of controversy. According to Musk, Twitter’s advertising revenue has dropped by more than 50% since October.
“Twitter’s corporate brand is already heavily intertwined with Musk’s personal brand, with or without the name X, and much of Twitter’s established brand equity has already been lost among users and advertisers,” said Jasmine Enberg, an analyst with Insider Intelligence.
It’s “completely irrational from a business and brand point of view,” said Allen Adamson, co-founder of the marketing and brand consulting group Metaforce. He called it an “ego decision” on the part of Musk. “To me, it’s going to go down in history as one of the fastest unwinding of a business and brand ever.”
There’s also the risk to Musk’s future goals. Building banking and payments into the app will require customer trust — something that’s difficult to get with a brand-new product name. “I just think that customers outside of Musk’s sort of core fan base would really struggle to use Twitter to exchange their money,” Vanderbilt’s White said.
One thing working in Musk’s favor: “The Elon brand,” said Irwin. “His personal brand might be more powerful than the Twitter brand.”
