Elon Musk, the former richest man in the world, has rebranded Twitter as X in an attempt to realize his decades-long ambition of creating an all-conquering super app. X’s CEO, Linda Yaccarino, announced the radical transformation, envisioning a platform centered on audio, video, messaging, payments/banking, and powered by AI. However, experts are skeptical about X’s chances of success, given the challenges it faces.
Yaccarino tweeted Twitter—sorry— x’ed—that the company was being radically reimagined to become a platform “centered in audio, video, messaging, payments/banking—creating a global marketplace for ideas, goods, services, and opportunities. Powered by AI.
” Yaccarino wrote. “X will be the platform that can deliver, well … everything.”
To become a super app, X needs to build an entire financial technology infrastructure, comply with strict regulations, and earn back the trust of users and advertisers who have left the platform since Musk’s takeover. Building a payments system is crucial, as it would allow users to pay each other and businesses for goods and services.
“If you’re closest to transactions, you own the user,” says Devin Kohli, cohead at venture capital firm Outward VC. “Yes, people care about social, but if you control their money flow, your engagement is going to be very high and churn very low.”
However, experts doubt X’s ability to navigate the complex regulatory landscape and establish a financial rail that users and regulators would trust.
“I honestly don’t think this stands any chance at all of becoming reality,” says Frances Coppola, an independent analyst. “The regulatory hurdles are daunting and I reckon governments will stamp on any attempt to evade them.” She adds that hundreds of such hurdles around the world will require Musk to hire an army of experts he simply can’t afford.
Twitter’s approach to regulation under Musk has been lax, which could hinder its compliance with the European Union’s Digital Services Act and other strict rules on managing disinformation. Moreover, the leaked “Twitter Files” and reduced employee count raise concerns about the platform’s ability to protect users’ financial information and its overall viability as a business venture.
X’s advertising revenue has significantly declined under Musk’s leadership, with big advertisers moving away from the platform. To lure them back, X must detoxify its space and create a safer environment for brands and influencers, moving away from controversial content.
Paying influencers based on engagement is a step in the right direction, but X faces stiff competition from platforms like YouTube and TikTok, which offer broader reach and higher payouts. Additionally, X must figure out its own video platform, as previous attempts, like Vine and Periscope, did not pan out.
X’s rebranding may be seen as a kite-flying exercise to attract advertisers back to the platform. However, to become a successful super app, it needs to overcome significant challenges related to regulations, trust, and competition from other established platforms.