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ANGE:

From Schwartz Media, I’m Ange McCormack. This is 7am.

The world’s richest man, Elon Musk, has a new pet project: reinventing — and possibly destroying — the site formerly known as Twitter.

Now known simply as X, tweets are called Xs, the site’s domain name is X.com, and the iconic blue bird logo is no more.

Musk’s rebrand isn’t purely for aesthetics, it’s the beginning of the billionaire’s vision to create a ubiquitous “everything” app of the future.

So, could an ambitious plan to centralise communication, shopping, banking and social media in one one place be brazen enough to work?

Today, Reuters financial journalist and long-time watcher of Elon Musk’s business empire, Antony Currie, on Elon’s plan to disrupt the global financial system.

It’s Friday, July 28.
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Archival tape – Reporter 1:

“Well it’s bye bye birdie, hello X. Twitter has unveiled a new logo…”

Archival tape – Reporter 2:

“The tech billionaire announced a massive rebranding of Twitter over the weekend…”

Archival tape – Reporter 3:

“Rebranding to be known simply as…X. That’s the latest shakeup under billionaire Elon Musk…”

ANGE:

Antony, you've reported on Elon Musk's businesses for a decade or so now. When you saw him make this announcement out of nowhere that he was renaming Twitter to X, did it surprise you?

ANTONY:

No, not really. I mean, for a couple of reasons. He had already, a few months ago, decided to change the parent company's name to X, and the companies he set up to buy Twitter, He named X, Right. So, none of this is particularly surprising in that sense. What surprised me more is that he's got this intention to replace everything with the letter X. So, if you are Meta or if you are Alphabet, yes, you've changed your name from the original product, but you kept the product's name. So Alphabet still has Google, you don’t Alphabet something, you still Google something. You still use Facebook, rather than using Meta. So, in general terms, I think, you know, it's not a big surprise, nor is it particularly, in general terms, a bad name.

His propensity for naming things, weirdly, is well known. He has his children, I think, is one of his other children is named Y. I think. So, as in the letter Y.

ANGE:

Right.

ANTONY:

I mean, the only time I see him sort of putting it into a broader context — and this is a ridiculously stupid broader context — is when he was talking initially about what he wanted from his Tesla cars, he said what he really wanted was four cars: one with the S, one with X, one a Y, and then the other one he wanted to be an E, but the Model E is a brand owned by Ford, and they wouldn't give it to him. Because, what he wanted to be had to spell was the word ‘sexy’.

ANGE:

Of course

ANTONY:

Which is great. And apparently I’ve heard that that’s one of the new names of one of the conference rooms in the Twitter headquarters now is.

ANGE:

And can you tell me about where the name actually comes from? Why does Elon Musk seem to use this letter so much?

ANTONY:

X.com. Well, with that, we're going back to, I think, 97, 98 when he started it.

Archival tape – Elon Musk:

“I mean what you’ve got going on with the internet is, it’s basically like an earthquake where the epicentre is Silicon Valley, and it’s…it’s shaking up the whole world.”

ANTONY:

And the idea behind that was basically to be an online bank.

Archival tape – Elon Musk:

“So this is an ATM, and what we’re gonna do is transform the entire banking industry. I do not fit the picture of a banker…”

ANTONY:

So if you think about the US banking system at the time - really antiquated…

Archival tape – Elon Musk:

“Raising 50 million dollars is a matter of making a series of phone calls…and the money is there.”

ANTONY:

…cheques are the thing. Everyone loves cheques. No one wants a debit card. Along comes X.com, is one of many, over that from that point onwards for the next 10-15 years, online banks trying to disintermediate and destroy the really sclerotic, fragmented, antiquated US banking system. And what X.com basically wanted to be was just an online bank. No fees, easy to pay people, send people money. So, you know, just input someone else's email address and send them money, which was unheard of in America at the time.

Archival tape – Elon Musk:

“I think X.com could absolutely be a multi-billion dollar bonanza, because if you look at the industry that X is pursuing, it's the biggest sector of the world economy…”

ANTONY:

So he set it up, did pretty well from it, merged it, in I think 2001, with a company called Confinity, which was being run by Peter Thiel and Max Levchin. They then ousted Musk from the business. He was CEO at the time, they got rid of him. One of the arguments was about what to call it. He wanted to call it X.com, they decided to call it PayPal. It then got bought by eBay, and became a much larger business later on, and is now one of the big survivors of the whole financial technology growth and rout of the past 20 years.

Archival tape – Interviewer:

So here you are, and you come to Canada, make it to the United States, and then you and several other guys come together and create PayPal.

Archival tape – Elon Musk:

Right.

Archival tape – Interviewer:

“And you sell it to eBay for 1 point whatever it was, 5 billion dollars?”

Archival tape – Elon Musk:

“Yeah. So after PayPal, that gave me, you know, a fair bit of capital…”

ANTONY:

But it gave Musk the money that he needed to go out and start SpaceX, and then to invest in, and then eventually to become chairman and CEO of Tesla.

Archival tape – Elon Musk:

“When I was in college there were three areas that I thought would most affect the future of humanity. And those were: the Internet, the transition to a sustainable energy and transportation sector, and the third was space exploration…”

ANTONY:

And I think, what was it, 2017 he bought the rights to X.com name back off PayPal, which is where the X.com company finally ended up in after a couple of deals.

ANGE:

And this isn't just a rebrand of the name or the logo. This is actually another step in reinventing what the platform Twitter actually is. Can you tell me what he plans to do with X.com?

ANTONY:

Yeah, it's… I mean, he's got these grandiose plans, right? So he talks about it becoming an everything app and everything apps are well, they're supposed to kind of do what they say on the tin, right, which is pretty much everything. And he's basing it, I think, off WeChat in China. He's mentioned that as well, WeChat does basically, you think about anything you can do online in China and WeChat basically does it for you. Started off as a chat platform, what, 12 years ago, got to banking, payments. You can, you know, order your food, order a car on that, everything.

Archival tape – Elon Musk:

“If there's something you want to do, you can do it on the sort of, you know, X everything-app or you can leave easily and go somewhere else…”

ANTONY:

So that’s what he’s looking for. And there are others around the world that do that, mostly in Asia. So you've got GoTo which is in Indonesia, I think, and a few others. So it's not unheard of. It's just never been done in America. But one of the things that surfaced recently that Musk has said in the past few months, when talking about his plans for X.com and how big it could become, he said something like could be 50% of the global financial industry, or a really big number.

Archival tape – Elon Musk:

Essentially, if done right, X would be…would serve people's financial needs to such a degree that over time it would…become, I don't know, maybe half of the global financial system.

Archival tape – Podcast Host:

“Wow.”

Archival tape – Elon Musk:

“Or some big number…”

ANTONY:

Now Musk is somebody who makes big prognostications. I would take all of them very carefully. But there's no way you're going to have one platform anytime soon — by which I mean probably in my lifetime — being worth half of the global financial system. It's just never going to happen. No individual country is going to let any bank dominate — or any payments platform — dominate to that extent. I'll just give you one little tidbit on America for example, the largest bank, J.P. Morgan, has about 12% of the country's deposits. I think at the moment it's still illegal for a bank to buy its way above 10% of the nation's deposits, by buying another bank. You can grow it that way, or you can buy another bank if there's a financial crisis. And J.P. Morgan's good at buying banks in a financial crisis. But you cannot be that big a bank, it’s just not allowed. You think about Australia, we've got four big banks down here, we've got the superannuation funds getting bigger and bigger. This government nor any other government wants that to get any more concentrated, right, especially the banking sector. The Brits won't want it, the Germans won't want it, the Indians won't want it, the Chinese won't even let you in. So it's just not going to happen.

ANGE:

And there's also a question, I would think, about the reputation of Elon Musk himself as a business owner and whether customers would actually want to use an app like X.com to make these transactions right. And be associated with someone like Elon Musk, who increasingly, is very unpopular.

ANTONY:

Yeah, exactly. I mean, what you want your bank to be is about as boring as possible. Right, so, you know, if you think back to the most recent financial crisis in the US, what, four or five months ago, where suddenly we're seeing how these allegedly boring banks losing money, that actually probably couldn't have happened here in Australia because the banking system here really has become really, really boring. That's great if you're a banking CEO, or if you are a customer, that's kind of what you want. You do want your bank getting into trouble. You don't want your payment system being a mess. You don't want your lending platform having a bunch of racist and sexist comments on it all the time, right? You want it simple. You want it to do what it's meant to do as a banking app or banking system. That's it.

So yeah, the way that Musk has gone about Twitter…fine, look, if he doesn't like the way Twitter works, if he wants to introduce his own brand of free speech, go for it. He owns it. Why not? And yes, is he destroying the brand? Quite probably. Is it going to survive? Probably. So, there's the Elon Musk reputation, there's the Twitter reputation as it has become, which don't help. There’s other things that, you know, if you go into the payment system in banking, you've got to deal with more regulators. And Musk doesn't like government interference in his businesses.

ANGE:

We’ll be back in a moment.

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ANGE:

Antony, this idea of Elon Musk’s would need the backing of a strong, stable, successful company to make it work, right? What state is the company - Twitter, or X - in at the moment?

ANTONY:

Pretty parlous. So, what, he paid 44 billion USD for it. It's at least halved, or almost halved in value, which tells you it's having problems. I think advertising revenue is down 50, 60, 70%. It isn't looking good. A lot of people are posting less. A lot of the people who I follow are saying they don't want to, and these are the scientists or other journalists or people who used to use it to disseminate information the same. They're not getting the same kind of responses they used to get before. They're getting a lot of anti-climate change scepticism, a lot of rudeness, sexism, racism. It doesn't make you want to use the platform, right? So the value of the business has gone down, the advertising revenue has gone down, the subscription model he's introduced - I can't remember how many he's got, but we're talking millions of dollars, not hundreds of millions of dollars it's kind of asking to bring in. So tens of millions of dollars if he's really lucky.

ANGE:

And Elon Musk, he spent a lot of money when he bought Twitter, he borrowed against his own Tesla shares. But Twitter as a company was already in trouble then. And now it seems to be tanking even further, as you're saying. Could the world's richest man, Elon Musk, actually find himself in trouble after making all these decisions?

ANTONY:

I mean, he's become the world's richest man again. I haven't looked at the valuation of his stock. And I think SpaceX has also increased in value in the past few months. If Twitter goes under, he'll be fine. All right. And he has yes, I mean, he'll probably have to sell some more shares, but he's got a lot of them. He had, don’t forget a really, really, really generous bonus package about four or five years ago, which at the time was worth about 60 billion. It's probably worth more than that now. The shares have recovered a lot of their losses from last year. It's still worth far more than any car company should be worth. He's doing just fine. I have no concerns about his own personal wealth.

ANGE:

And I guess we've been talking about the brand damage that is being done to Twitter now that it's becoming X.com and Elon Musk's very close association with that brand, now. I wonder if you can talk about his other projects like Tesla, SpaceX, for example. Are they kind of being grouped in with Elon in the same way? Are they being damaged in the same way that Twitter or X.com is? Is that association there, or are people kind of being protected from that?

ANTONY:

I'm not sure SpaceX is. By having a second in command there, and for many years, now running it. I mean, I think he's nominally CEO, but he's not that associated with it. He'll cheer the launches. He'll say what's gone wrong if a rocket blows up. But I think SpaceX is pretty much doing what SpaceX is going to do. And it's not that consumer facing a business. So you can sort of push it off to the side to an extent, right. The Boring Company that's meant to dig tunnels underground to make it easier to transport cars around the city…I don't understand that business model, I don't get it, I don't know why anyone thinks it's going anywhere, and it seems not to be going anywhere. So we can put that to one side as well.

Twitter and Tesla are the consumer facing operations, right? So Tesla is, I think, he thought it would be better than it is now. I mean, the margins on that business are coming down. He's having to reduce the price of the cars he's selling at the moment. I think it's still better than most other car companies at the moment, but it's dropping, right. And also, I think in general, sales of electric vehicles have slowed. I don't think you can dissociate him from Tesla, but I think people can enough when it comes to buying a product like that, I think it works, It's good. And yes, there are more out there that I can buy, but Tesla is still really the standard. And it's just also struck a deal with a lot of other car makers for car makers to adopt Tesla's plug-in technology for charging. So it's clearly a leader, if not the leader.

ANGE:

And whether they are good ideas or not, it seems like visions of tech billionaires like Elon Musk and others are going to have an influence on our world. What do you think this story this week, and the interest in it, tells us about the influence people like him have over our popular culture, business, technology, the future?

ANTONY:

I’m tempted to say it’s too much. But I think we've always had, and always looked at certain people and put them on pedestals, or even put them on pedestals so we can knock them down. So I don't think there's anything unique about that. You look back to the old, the old media tycoons of the past, or you look back to big banking magnates like J.P. Morgan over a hundred years ago. Outsized personalities have outsized roles in society. How influential they can be is another matter, and how influential they can be behind the scenes or in public is is the question, I think, to Elon Musk's, not to his credit, but at least with Elon Musk, most of what he's doing, or seems to want to be doing is being done out in the open. He can't really keep a thought to himself.

ANGE:

And Antony, just going back to this idea of the everything app - do we really think that this is something that could take off, and is Elon Musk the kind of leader that could do that?

ANTONY:

In general terms, it's a nice idea to be able to do everything from one thing these days, but I can already do that, right? I can do it from my phone. Whether it's a Google or an iPhone. I can go in there and I have most things already set up. I can just with a flick of my finger, order a car, order some food, go and buy myself a flight if I need to. Yes, I'm going through different apps, but what the everything app does, WeChat especially does, it's not just WeChat, It's not just WeChat and its parent, Tencent's business on there. They've got links and sub apps to other businesses as well. So arguably your iPhone already does it. Forget about any regulatory hurdles, or antitrust issues with one company being able to dominate everything in the Western world, and America, and Britain, and the EU will hate that. Just look at how they've been going after Facebook, Google, everything. They will not allow that kind of thing to happen. Could Elon Musk be the person to do it? In theory, yes, because he's sheer bloody minded enough to want to do it. But it will require a lot more money. Probably a lot more deals have to go out and buy the other companies, and I think they'll just be too much pushback.

ANGE:

Antony, thanks so much for talking with me today.

ANTONY:

Yeah, pleasure.

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ANGE:

Also in the news today…

Commonwealth Bank will cut 250 jobs, according to the finance sector union.

Australia’s largest bank already cut its workforce by 200 a couple of months ago, despite rising profits.

And…

Former liberal politician Craig Kelly has defeated the Australian Electoral Commission in court.

Kelly, who tried to run for re-election for the United Australia Party after defecting from the former government, was fighting a judgement by the AEC that all of his campaign posters did not have the proper authorisation line clearly visible.

7am is a daily show from The Monthly and The Saturday Paper.

It’s produced by Kara Jensen-Mackinnon, Zoltan Fecso, Cheyne Anderson, and Yeo Choong.

Our senior producer is Chris Dengate.

Our technical producer is Atticus Bastow.

Our editor is Scott Mitchell. Sarah McVeigh is our head of audio. Erik Jensen is our editor-in-chief.

Mixing by Andy Elston, Travis Evans, and Atticus Bastow.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

I’m Ange McCormack, this is 7am. See you next week.

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