It is rare for corporate brands to become so intertwined with everyday conversation that they become verbs. It is rarer still for the owner of such a brand to announce plans to intentionally destroy it.
On Sunday, in the middle of a quiet summer weekend, Elon Musk decreed that Twitter’s product name would be changed to “X”, and that he was getting rid of the bird logo and all the associated words, including “tweet”.
Mr Musk’s move wiped out anywhere between $4 billion and $20 billion in value, according to analysts and brand agencies.
Mr Musk, whose company has already declined significantly in value since he purchased it for $44 billion in October, announced the change on Saturday night.
New chief executive Linda Yaccarino outlined the company’s vision for X to become a site for audio, video, messaging, payments and banking.
Analysts and brand agencies call the product’s renaming a mistake. Twitter is one of the most recognisable social media brands, said Todd Irwin, founder of brand agency Fazer.
Bird decals adorn small businesses and websites worldwide, alongside Instagram and Facebook logos.
Twitter’s popularity has also made verbs like “tweet” and “retweet” part of modern culture, used regularly to explain how celebrities, politicians and others communicate with the public, said Joshua White, assistant professor of finance at Vanderbilt University.
Other tech companies have renamed themselves in recent years. Google turned into Alphabet to allow different businesses within the company to grow without being tied to search.
Facebook changed into Meta Platforms to emphasise the company’s commitment to the metaverse. But the product names remained; we still google things by going to Google.
That is worth a lot. Twitter’s brand value is estimated at about $4 billion, according to brand valuation consulting company Brand Finance. The company values the Facebook brand at $59 billion and Instagram at $47.4 billion.
Vanderbilt University estimates Twitter’s brand value at $15 billion to $20 billion, which is comparable with Snapchat.
Brand valuation is difficult to determine, and there is no single approach, which is why estimates vary, said Dipanjan Chatterjee, an analyst with Forrester Research.
But several analysts and agencies agreed that the company’s brand has already taken a significant hit since Mr Musk’s takeover. Brand Finance, for example, estimates the Twitter brand lost 32 per cent of its value since last year.
As the perception of Twitter’s brand has changed, advertisers have fled. Advertisers were concerned about Mr Musk’s courting of controversy and embrace of tweeters who broke content rules.
X is the future state of unlimited interactivity – centered in audio, video, messaging, payments/banking – creating a global marketplace for ideas, goods, services, and opportunities. Powered by AI, X will connect us all in ways we’re just beginning to imagine.
Advertising revenue at Twitter is down more than 50 per cent since October, Mr Musk has.
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 Mr Musk.
“To me, it’s going to go down in history as one of the fastest unwinding of a business and brand ever.”
There is also the risk to Mr Musk’s future goals. Building banking and payments into the app will require customer trust – something that is difficult to get with a brand-new product name.
One thing working in Mr Musk’s favour is “the Elon brand”, said Mr Irwin.
“His personal brand might be more powerful than the Twitter brand.”
