Elon Musk, the new owner of Twitter, has decided to rename the platform to ‘X,’ replacing the iconic bird logo and associated terminology, including the word ‘tweet.’ This move has led to a loss of an estimated $4 billion to $20 billion in brand value, as per analysts and branding agencies.
The change was announced over the weekend and by Monday morning, the new black ‘X’ logo, designed by a fan, started appearing across the site. New CEO Linda Yaccarino envisions ‘X’ as a hub for audio, video, messaging, payments, and banking.
However, critics have labeled the renaming as a mistake, arguing that Twitter is one of the most recognizable social media brands globally. Steve Susi, director of brand communication at Siegel & Gale, argues that Twitter’s brand name took over 15 years to build its current equity and the decision to change could have significant financial implications.
The shift to ‘X’ means the company has to rebuild its cultural influence and linguistic consensus from scratch. But this could be a strategic move by Musk to stop users from comparing the platform’s past and present states. Yaccarino tweeted, “It’s an exceptionally rare thing — in life or in business — that you get a second chance to make another big impression.”
While tech companies have changed their corporate names in the past, like Google to Alphabet Inc. and Facebook to Meta Platforms Inc., their product names remained the same.
Brand valuation firm, Brand Finance, estimated Twitter’s brand value at around $4 billion. The renaming has already led to a significant decrease in the brand’s value, with Twitter losing an estimated 32% of its value since last year.
As Twitter’s perception changed, advertisers have begun to withdraw. Ad revenue at Twitter dropped by over 50% since October, due to concerns over Musk’s controversial actions and tolerance of rule-breaking users.
Analysts believe that despite the name change to ‘X’, Twitter’s corporate brand remains closely tied to Musk’s personal brand. Allen Adamson, co-founder of the marketing and brand consulting group Metaforce, labeled Musk’s decision as “ego-driven,” claiming it could be one of the most rapid brand devaluations in history.
Adding banking and payment options into the app would require customer trust, which could be challenging to gain with a new product name. However, Musk’s personal brand might be a saving grace as some believe it to be more influential than Twitter itself.