Whether an X is better than a bluebird remains to be seen. At the moment it can be said that Elon Musk’s strategy to change the name of Twitter will entail a high economic cost.
According to the consultancy Brand Finance, Twitter would have an estimated value of 4,000 million dollars (more than 3,600 million euros). Another Vanderbilt University study cited by Bloomberg puts Twitter’s figure even higher, between $15 billion and $20 billion. Some money that Elon Musk has suddenly erased when he released the new logo, called X.
In the case of Twitter, it has been a consolidated brand for 17 years, to the point that the expression tweeting is already part of the current vocabulary. It is something that specialists in brand building call “vulgarization”: when a brand becomes so strong that it becomes part of common slang (like kleenex, for example).
Elon Musk is now betting everything on an X. But it takes a long time to build a brand until it conveys trust and is recognizable to consumers. And this letter of the alphabet “could only be registered as a trademark if it could be proven that the logo has a distinctive capacity”, says lawyer David Muñoz, partner of RMA. The problem is that in the EU alone there are almost 20,000 registered logos that evoke an X shape.
Not only is there a risk of confusing the consumer with the name (think Microsoft’s Xbox), but there can be lengthy and expensive lawsuits for trademark infringement (in the US there are about 900 companies that have the X registered).
The company itself recognizes that it is a risky bet. “It’s very rare in business life to have a second chance to make another big impression,” admitted CEO of Twitter (or X), Linda Yaccarino, after commenting on the new strategy.
So why risk killing the blue bird? Brand Finance had calculated that since last year it had lost 32% of the price. The reason: “Musk has overlooked one of the most important values ??for a brand: people. Twitter has problems because of its reputation”, explained Brand Finance at the time. A drop that was also reflected in advertising revenue, which dropped by 50% since October.
Also to blame for Musk’s eccentricities, the reality is that the Twitter brand was in trouble. “It has never entered the Best Global Brands ranking (the 100 most valuable brands in the world), prepared by Interbrand, especially because of the difficulty the platform has always had to achieve profitability”, Carolina Aishemberg, associate director, reminds this newspaper growth of Interbrand.
Getting rid of the bird is the first step on a new path, because Elon Musk plans to make Twitter something completely different. X aims to be an application that offers a wide range of services, an ecosystem that, “powered by AI, will connect us all in a way that we can barely begin to imagine”, according to Yaccarino. “We are therefore talking about an important turn in the strategy of the business to expand it far beyond its main activity. If we start from this basis, the name change is justified”, says Aishemberg.
In this sense, this expert believes that the strategic turn makes sense if we analyze the strategy followed by the strongest brands in the world today: instead of creating a product and then a brand that makes it unique, they put the brand first and, subsequently, they build around it an integrated ecosystem of products and services. The example of this new paradigm is Apple: the power of its brand is what has allowed the company to expand its reach to new services (entertainment, health, finance, etc.).
“Given the personal style with which Musk has built his career, X remains the imprint of his own imprint, a simple symbol with which he aspires to identify everything he develops (as with the i of so many Apple products). And the original Twitter, in the end, was not his creation”, they point out from Interbrand. “In the end, Elon Musk’s personal brand turns out to be much more powerful than that of Twitter itself,” quipped Todd Irwin, from the Fazer agency. No X, no bluebirds. The brand is him.