It’s rare for corporate brands to become so intertwined with everyday conversation that they become verbs. It is even rarer for the owner of such a brand to announce plans to deliberately 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 would remove the bird logo and all associated words, including “tweet.” Musk’s move has wiped out somewhere between $4 billion and $20 billion in value, according to analysts and brand agencies.
“It took more than 15 years to earn this much equity globally, so losing Twitter as a brand is a major financial blow,” said Steve Susi, director of brand communications at Siegel & Gale.
Musk, whose company has already plummeted in value since buying it for $44 billion in October, announced the change Saturday night. Monday morning, a new black “X” logo, designed by a fan over the weekend, appeared site-wide. New Chief Executive Officer 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 renaming of the product a mistake. Twitter is one of the most recognizable social media brands, says Todd Irwin, founder of brand agency Fazer. Bird stickers adorn small businesses and websites around the world, alongside Instagram and Facebook logos.
The popularity of Twitter has also allowed verbs like “tweet” and “retweet” to become part of modern culture, regularly used to explain how celebrities, politicians and others communicated with the public, said Joshua White, an assistant professor of finance at Vanderbilt University.
X requires the company to build that cultural appeal and linguistic consensus from scratch. But that may be part of the motivation, so users stop comparing post-acquisition Twitter to what it was before. “It’s exceptionally rare – in life or business – that you get a second chance to make another big impression,” Yaccarino tweeted.
Other tech companies have rebranded themselves in recent years. Google turned into Alphabet Inc. to grow different businesses within the company without being tied to search. Facebook turned into Meta Platforms Inc. to emphasize the company’s commitment to the metaverse. But the product names remained; we still google things by going to Google.
That’s worth a lot. Twitter’s brand value is estimated at around $4 billion, according to brand valuation consultancy 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 on par with Snapchat.
Brand valuation is difficult to determine, and there is no one-size-fits-all approach, which is why estimates vary, said Dipanjan Chatterjee, an analyst with Forrester Research Inc. But several analysts and agencies agreed that the company’s brand has already taken a significant hit since the Musk acquisition. For example, Brand Finance estimates that the Twitter brand has lost 32% of its value since last year.
As the perception of the Twitter brand has changed, advertisers have fled. Advertisers were concerned about Musk’s pursuit of controversy and embrace of tweeters who violate content rules. Ad revenue on Twitter is down more than 50% since October, Musk said.
“Twitter’s corporate brand is already deeply entwined with Musk’s personal brand, with or without the X name, and much of Twitter’s established brand equity has already been lost to users and advertisers,” said Jasmine Enberg, an analyst with Insider Intelligence.
It’s “completely irrational from a business and brand standpoint,” says Allen Adamson, co-founder of the marketing and brand consulting group Metaforce. He called it an “ego decision” on Musk’s part. “For me, it will go down in history as one of the fastest dissolutions of a company and a brand ever.”
There’s also the risk to Musk’s future goals. Building banking and payments into the app requires customer trust — something that’s hard to get with a brand new product name. “I just think customers outside of Musk’s core fan base would really struggle to use Twitter to exchange their money,” Vanderbilt’s White said.
One thing works in Musk’s favor: “The Elon brand,” Irwin said. “His personal brand may be more powerful than the Twitter brand.”
(This story has not been edited by DailyExpertNews staff and is auto-generated from a syndicated feed.)
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