Sunday, July 23, the microblogging network Twitter, bought at great expense by Elon Musk, became X. And the way it happened suggests a slight improvisation on the part of the billionaire, who has accustomed us to sometimes act on a whim, beyond purely business considerations.
Elon Musk, however, justified his decision on Monday, after the presentation to fans of a logo visibly created spontaneously, then its adoption as the new emblem of Twitter. “The name Twitter [qui se traduit en français par gazouillement, NDLR] made sense when there were only 140 character messages going back and forth — like birds chirping“.
Elon Musk designs his platform as an all-in-one service that delivers video, audio, messaging, but also financial services… based on the model of the Chinese WeChat application. The objective is therefore to make it a kind of universal service. And obviously, the Twitter brand was too narrow for him. The new general manager of Twitter/X, Linda Yaccarino, has sent messages to this effect. But the task is difficult for the one who was recruited to reassure the advertising market after the many cookie-cutter decisions of the boiling billionaire.
A loss of value estimated between 4 and 20 billion
First of all, because the decision to rename Twitter to X will have significant financial repercussions, as explained by Bloomberg. The change destroyed between $4 billion and $20 billion in value, according to analysts and brand agencies interviewed by the agency.
For many of them, this is a mistake. “It took more than 15 years to gain so much capital in the world, so losing Twitter as a brand name is a major financial blow.“, analyzes Steve Susi, director of brand communications at Siegel & Gale interviewed by Bloomberg. In addition, the uses linked to this platform have entered everyday language. Starting from scratch with brand X, we will have to recreate everything, which will necessarily take time.
What is the Twitter brand worth? About $4 billion, according to Brand Finance. Between 15 and 20 billion dollars according to Vanderbilt University. It should be remembered, however, that the brand has had to deal with numerous shocks linked to the decisions taken by Elon Musk in recent months, which must have had an impact on its valuation. Last but not least, if the platform wants to develop in financial services, it will have to generate confidence for future customers. What is not won at the moment.
Legal complications
Musk’s decision could also lead to legal issues, as explained by Reuters. “There is a 100% chance that Twitter will be sued by someone“, said trademark attorney Josh Gerben quoted by the agency. The latter says he has counted nearly 900 active trademark registrations in the United States, which already cover the letter X in various industries.
And among the big fish, we find Microsoft, which owns an X brand related to the communications of its Xbox gaming environment. Meta, Facebook’s parent company, has a brand with a blue and white letter X in the fields of software and social media since 2019. Knowing that Meta comes to walk on Twitter’s toes with Threads, we can easily imagine the interest for Mark Zuckerberg’s group to come and tickle the social network with the blue bird that has flown away.
“Given the difficulty of protecting a single letter, especially one as commercially popular as X, Twitter’s protection will likely be limited to graphics very similar to their X logo.“, according to Douglas Masters, lawyer at Loeb & Loeb, interviewed by Reuters.
Sources: Reuters, Bloomberg