Elon Musk’s stop-start plan to buy Twitter for $44 billion (€44 billion) has often seemed like an impulsive move by the world’s richest person.
But the Tesla and SpaceX chief now insists the deal is part of a masterplan to launch an “everything app” incorporating messaging, payments and commerce that has been more than two decades in the making.
“Buying Twitter is an accelerant to creating X, the everything app,” Musk tweeted on Tuesday after his lawyers told the social media company he planned to proceed with the purchase at the original price of $54.20 per share. The deal is contingent on debt financing and an end to the bitter months-long legal battle to back out.
Since launching his original bid in April, Musk has said that owning Twitter is more about preserving the platform as an open venue for “free speech” — not to mention solving its spam problem, which apparently irritates Musk as a heavy user — than about making money.
However, over the summer, Musk hinted at a bigger plan for Twitter: turning it into the backbone of a WeChat-style “super app” that acts as an operating system for people’s digital lives.
The “X” mentioned in Tuesday’s tweet appears to be a reference to X.com, Musk’s second start-up, which ultimately became PayPal. Musk bought back the single-letter domain name from PayPal in 2017. “No plans right now,” Musk tweeted at the time, “but it has great sentimental value to me”.
Musk revealed in August, however, that he did in fact have “a grander vision for what I thought X.com or X Corporation could have been back in the day”.
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“It’s a pretty grand vision. And obviously that could be started from scratch,” he said at Tesla’s annual shareholder meeting, without giving further details on what exactly this plan entailed. “But I think Twitter would help accelerate that by three to five years.”
The original X.com was one of the first online banks, co-founded by Musk in early 1999, at the height of the original dotcom bubble. Musk’s first start-up, Zip2, an online directory of local businesses, had just been sold to Compaq for more than $300 million.
A newly minted multimillionaire, Musk invested $12 million — most of his proceeds from the Zip2 sale, after tax — into X.com. He envisaged it ultimately becoming a one-stop shop for financial services, from consumer bank accounts to brokerage services and insurance.
A year later, X.com merged with its rival Confinity and in 2001, the company was rebranded as PayPal. When it was sold to eBay for $1.5 billion in 2002, Musk made about $180 million, giving him the financial firepower to go on to invest in the electric car start-up Tesla and build his rocket company, SpaceX.
But over the years, Musk has suggested that he sees X.com as a missed opportunity to become “the central place where all transactions happen”. He told his biographer Ashlee Vance that he had even considered “trying to get PayPal back”.
“If all your financial affairs are seamlessly integrated [in] one place, it’s very easy to do transactions and the fees associated with transactions are low,” Musk is quoted as saying in Vance’s 2015 biography. “Why aren’t they [PayPal] doing this? It’s mad.”
Recently, PayPal has made more ambitious moves to become a “super-app” for payments. But Musk’s concept for melding Twitter and X.com appears to go even further.
A pitch deck shown to investors earlier this year outlined Musk’s vision for Twitter, including adding PayPal-style payments between users and cutting back on advertising in favour of charging some users a subscription. He projected that more than 100mn users would sign up to an X subscription by 2028.
“You basically live on WeChat in China,” Musk told Twitter employees at an all-hands meeting at the company in June, before he tried to back out of the deal. “If we can recreate that with Twitter, we’ll be a great success.”
Musk is not the first US tech entrepreneur to try to recreate outside China a WeChat-style super app that melds social media and commerce.
Meta chief Mark Zuckerberg has striven to turn Facebook Messenger into a platform for games, payments and shopping, while Snap’s Evan Spiegel has also attempted to mould Snapchat in WeChat’s image with mini-apps. But neither found the same success as Tencent-owned WeChat, which dominates China’s internet with more than 1.2bn users.
Today, visitors to the X.com domain will see nothing more than a lower-case letter “x” on a blank background. But if Musk is to be taken at his word — not always a given for the mischievous entrepreneur — it could one day become much more.
Rebooting X.com is “something I’ve thought would be quite useful for a long time”, Musk said in August. “I know what to do . . . I think it’s something that will be very useful to the world.”
He added: “I do use Twitter a lot. It’s not like I’m like randomly going around wanting to acquire companies or something.” — Copyright The Financial Times Limited 2022
