Hectic week for the multiple personalities of Elon Musk. Last Friday, the engineer-star launched two prototypes of unconvincing humanoid robots. On Tuesday, the “tweetos” to 100 million subscribers proposed a highly criticized peace plan for the war in Ukraine. And on Wednesday, the capricious entrepreneur finally decided to buy Twitter at the price initially agreed after many twists and turns. What to expect from tomorrow?
Musk already has a new fad. “The purchase of Twitter is an accelerator to create X, the application of everything”, mysteriously tweeted the businessman. The expression “application of everything” is a reference to the Chinese “super apps” such as WeChat or Alipay. The two pads, the most popular on the spot, are indeed distinguished as portals grouping together multiple functionalities: messaging, social network, shopping, payment, online wallet.
What do we know about X? First, it’s a real company founded by Musk in California in 1999, after selling Zip2, his very first entrepreneurial adventure. The company already imagined itself as a banking “super app” that could accommodate deposits, insurance or mortgages. Unheard of at the time. The X.com site, in its infancy, had launched by offering 20 dollars to any opening of an online current account, a marketing method which recalls those of neobanks like Boursorama years later. The success of X is modest and its lifespan rather short: the company merges into what would become PayPal, the famous Internet payment application, a time piloted by eBay before becoming independent in 2015.
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In 2017, a mysterious site X.com reappears online, with no content except for an “x” installed in the left corner of the screen. New black hole. Until the offer made to Twitter. In May, a note in connection with the takeover of the group mentions plans for a new “X” subscription with a target of more than 100 million users by 2028. “I have a kind of big vision for what X.com or company X could have been (…) I don’t need Twitter, but Twitter could probably speed it up three years I think that’s something that could be very useful for the world”, he also declared during the general meeting of Tesla in August.
A model difficult to duplicate
Twitter could therefore fit into X. Or vice versa. In any case, the bet is daring: “super apps” are relatively rare. Above all because the WeChat or Alipay model remains difficult to duplicate outside of China. “The country has a market that is both substantial and very little competitive. Western companies are not welcome there. In Europe or the United States, the political context is not the same. And economically, different companies dominate for each type of market, whether Amazon in e-commerce, Meta for social networks or even Apple for payment. Regulators are particularly attentive to this”, explains Julien Pillot, professor at the Inseec, specialist in digital economy.
A leader of a French fintech recently testified to L’Express of the difficulty of founding a “super app”. To multiply the services and make them effective, it is necessary to be able to count on many users. Twitter starts from very far: its application has “only” 230 million, against more than a billion for example for WeChat. And even. Even Facebook, even more colossal, never really managed to become a “super app” despite its will. The group has just launched its own payment solution – Meta Pay – but still distinctly separates its messaging and social network activities. Snap tried, for a time, to bring together in its application activities of commerce, meditation, video streaming, and many others. Before tumbling down. For Musk, the timing is not ideal. Tech is suffering considerably from the economic slowdown that has been under way since the war in Ukraine. Competition is fierce and investment is drying up. Fintech even more: in Europe, a behemoth like Klarna, for example, saw its valuation drop by 85%, from 45.6 to 6.7 billion dollars.
The strong comeback of X.com truly testifies to the vagueness that persists around Musk’s true intentions. “I have an idea for a blockchain-based social media system, which would do both payments and short messages/links like Twitter. You have to pay a small amount to register your message on the channel, which will cut the vast majority of spam and bots. Freedom of expression will be guaranteed there,” said another SMS exchange from Musk to his brother Kimbal on April 9, recently exhumed by American justice on the sidelines of the trial with Twitter. Where does Musk really want to go? Towards a great app, a Web3-style Twitter, both at the same time?
A double emergency
In the spring, the boss of SpaceX had above all put forward his desire to take Twitter out of the stock market, to beef up its subscription policy and to provide it with more flexible moderation. Enough to help the blue bird to reach 26.4 billion dollars in turnover by 2028, five times that in force at the time of its takeover. Musk’s new wishes illustrate, perhaps, ultimately, the urgency to reinvent Twitter. In the second quarter, the social network’s net losses amounted to $270 million. The company lost more than 700 employees in September alone and many see with a very bad eye Musk’s assumption of office.
Finally, the urgency is personal. The star entrepreneur has already sold $15.4 billion worth of Tesla shares to finance his new fad. According to American analyst Dan Ives, this bleeding could continue and further weaken the automaker. Tesla’s share price fell on Wednesday, October 5 by more than 5% in just 24 hours. Elon Musk is paying a high price for the end of the legal dispute between him and Twitter, following his criticisms of the underestimation of fake accounts (or spam/bots). There remains a reason for hope for the inventor: “The markets do not completely lose confidence in his ability to meet any challenge”, also underlines Julien Pillot. The price of the social network immediately gained more than 22% on the stock market after the announcement of its takeover. Despite the great vagueness that surrounds its future.
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Twitter: with Elon Musk, an uncertain future… within a “super app”?
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