With Twitter, Elon Musk Wants to Accelerate the Creation of X, the App of Everything.
Utopia or real possibility for the genius entrepreneur?
Elon Musk is ubiquitous in every field now. In just a few days, at the beginning of October 2022, the star entrepreneur launched two prototypes of humanoid robots, proposed a scabrous peace plan to solve the war in Ukraine, and finally decided to buy Twitter at the price initially agreed upon in the spring without going through the trial.
What about tomorrow? “The purchase of Twitter is a gas pedal to create X, the app of everything,” the businessman mysteriously tweeted in the wake. A reference to the Chinese “super apps” such as WeChat or Alipay. These two ultra-popular platforms are presented as portals with multiple features: messaging, social networking, shopping, payment, and many others.
The letter X is a real company founded by Musk in 1999.
Even then, the company envisioned itself as “a banking super app” that could host deposits, insurance, or mortgages. But X's success was modest and its lifespan rather short: the company was soon merged into PayPal, the famous internet payment app.
In 2017, Musk bought back the domain name X.com “for sentimental reasons.” It reappears online, with no content, except for a small cross installed in the left corner of the screen. New black hole. Until the offer was made to Twitter for $44B.
A note in connection with the platform buyout then mentions plans for a new “X” subscription with a goal of over 100 million users by 2028. “I have a kind of grand vision for what X.com or company X could have been. I don't need Twitter, but Twitter could probably accelerate it by three years,” he had also said at his Tesla flagship's general meeting in August 2022.
So Twitter could become intertwined with X. Or the other way around.
In any case, the bet is daring: “super apps” are rare. Above all, because the WeChat or Alipay model remains difficult to duplicate outside China. The country has a market that is both large and very uncompetitive: Western companies are not welcome there.
In Europe or the United States, it's different from what you can have in China: the markets are well divided between several entities, like Amazon in e-commerce, Meta for social networks, or Apple for payment... The regulators are attentive to this.
Creating a super app in the West is extremely difficult. To multiply services, and make them efficient and innovative, you need to be able to count on a lot of users. Twitter is starting from a very low base: its application has “only” 230 million users, compared to more than a billion for WeChat. The same goes for Snap, which tried, for a while, to bring together commerce, meditation, and video streaming activities within its application, before plummeting.
Even the colossal Facebook, with nearly 4 billion users, never really managed to become a “super app” despite the will of Meta.
The timing, finally, is not ideal in Elon Musk's desire to create X, his super app. The tech industry is suffering considerably from the economic slowdown caused by the war in Ukraine. Competition is tough and investments are drying up. Start-ups linked to finance - which is what X would be - even more so: in Europe, a behemoth like Klarna has seen its valuation drop by 85%, from 45.6 to 6.7 billion dollars.
X's resurgence is a testament to the lingering vagueness around Musk's intentions.
“I have an idea for a Blockchain-based social media system that would do both payments and short messages or links like Twitter. You have to pay a small fee to register your message on the blockchain, which will cut off the vast majority of spam and bots. Freedom of expression will be guaranteed,” says a text message exchange from the billionaire, this time with his brother Kimbal, on April 9, 2022.
Where does Elon Musk want to go? Towards a “super app”, a Web3-style Twitter, both at the same time?
In the spring of 2022, the SpaceX boss highlighted his desire to take Twitter off the stock market, strengthen its subscription policy, and give it a more flexible moderation. This would help bluebird reach $26.4 billion in revenue by 2028, five times the amount at the time of its acquisition.
Musk's groping perhaps most illustrates the urgency of reinventing Twitter.
In the second quarter, the social network's net losses accelerated to $270 million. The company lost more than 700 employees in September 2022 alone, and many view Musk's takeovers of the company very negatively. The Tesla boss, meanwhile, has already sold $15.4 billion worth of shares to finance his takeover of Twitter. And the price of his company has fallen by more than 5% in just twenty-four hours after his turnaround on the social network.
For Elon Musk, there is still a reason for hope: the markets do not lose confidence in his ability to meet any challenge. The price of Twitter immediately gained more than 20% on the stock market after the announcement of his takeover of Musk. Despite the great vagueness that surrounds its future.
Some reading
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