Why Elon Musk Bid Twitter Goodbye
Raw Text
Advertisement
SKIP ADVERTISEMENT
DealBook Business and Policy
Supported by
SKIP ADVERTISEMENT
DealBook Newsletter
Rebranding the social network as X marks the billionaireâs latest gamble to reinvent the company, after buying it last year for $44 billion.
Give this article
By Andrew Ross Sorkin , Ravi Mattu , Bernhard Warner , Sarah Kessler , Michael J. de la Merced , Lauren Hirsch and Ephrat Livni
7:55 a.m. ET
Image
Image
Twitterâs new logo spells the end of one of the internetâs best-known brands.
Credit... Carlos Barria/Reuters
Twitter has flown away
Bye-bye, blue bird: Twitter overnight began rebranding itself as X , replacing its longtime logo with a stylized symbol that was projected onto its San Francisco headquarters.
The move underscored Elon Muskâs ambition to make the social network a key part of his longtime goal of creating an âeverything app.â But it is also another risky gamble to reinvent a business that has struggled since he paid $44 billion for it last year.
âLights. Camera. X!â wrote Linda Yaccarino , the companyâs C.E.O., as the social network starting rolling out its new branding. Gone is the stylized bird , once dubbed Larry T. Bird by the Twitter co-founder Biz Stone, which became one of the most famous internet logos â and which the company has described as its most recognizable asset .
The platformâs about page hasnât yet been updated, but Ms. Yaccarino repeatedly referred to X in a series of tweets outlining the companyâs ambitions. Expect X to more fully pervade the company: Mr. Musk described an internal message to employees over the weekend as the last heâd send from Twitter , and he told a user that a post should be called an âxâ instead of a tweet.
Mr. Musk was very clearly behind the makeover, having long been fascinated by the X identity . His second start-up was X.com, which eventually became PayPal. (The writer Walter Isaacson shared tantalizing snippets of his coming Musk biography about that.) Mr. Musk incorporated âXâ into the name of SpaceX and Teslaâs first car model, and he recently named his new A.I. start-up xAI.
Not everyone was on board with the move , though some ad executives said what matters more is whether users stick with the platform. Ms. Yaccarino briefed marketers Sunday on the latest changes at the company, according to The Financial Times, which also include collaborating more with xAI. (The revamp may raise questions about how much authority she wields at the company, after Mr. Musk imposed view limits for users that didnât please advertisers.)
Itâs more than a branding exercise. As Twitter has struggled under Mr. Musk â a pivot to relying on subscriptions hasnât made up for a 50 percent drop in ad revenue , negative cash flow, and a new threat from Metaâs Threads â he has increasingly emphasized the companyâs importance in what he calls X.
The billionaire has long dreamed of creating a super-app that could serve as a platform for everything users could do online, much as WeChat does in China. But as third-party data suggests user numbers are falling, itâs not clear how much runway Mr. Musk has to get a reborn X airborne.
Image
HEREâS WHATâS HAPPENING
âBarbenheimerâ sets a postpandemic box office record. âBarbieâ and âOppenheimerâ raked in a combined $235.5 million in the United States and Canada, the best opening weekend since âAvengers: Endgameâ in 2019. Itâs good news for a movie industry beset by writersâ and actorsâ strikes and underperformance by expensive blockbusters, but it suggests that Hollywoodâs dependence on franchises is increasingly failing to pay off.
Wildfires force evacuations in Greece. Officials ordered thousands off the tourist hot spots of Rhodes and Corfu this weekend after fires burned swaths of the islands. Southern Europe, like much of the Northern Hemisphere, has been roasted by temperatures soaring over 100 degrees Fahrenheit.
Morgan Stanley gives âBidenomicsâ strong marks. Ellen Zentner, the bankâs chief U.S. economist, said that President Bidenâs economic policy, including sweeping investments in infrastructure, has led to a surge in manufacturing, construction and hiring that helped G.D.P. grow more than anticipated. Thatâs good new for Mr. Biden, who has promoted his economic record to bolster his re-election campaign.
Adidas reportedly sees strong demand for Yeezy shoes. The German shoemaker received about $563 million worth of online orders for the Kanye West-designed sneakers that it sought to offload this spring, according to The Financial Times. Last year, Adidas ended its partnership with the rapper after he made antisemitic remarks, but has sought alternatives to destroying its Yeezy inventory, which would lead to a $550 million write-down.
Image
A big week for central banks
Investors are bracing for a consequential week of interest-rate decisions that could set the stage for a second-half rebound for the worldâs biggest economies.
Wall Street is increasingly buying a âsoft landingâ for the U.S. economy, betting that higher interest rates will continue to bring down inflation without causing a recession. Jon Gray , Blackstoneâs president, believes that the worst is over and that M.&.A. activity will pick up again as inflation moderates.
Investors are feeling bullish too, pushing the S&P 500 roughly 19 percent higher this year on the belief that central banks will grow less hawkish.
That vision will be tested on Wednesday, decision day for the Fed . After pausing rate rises last month, the central bank is expected to raise borrowing costs by 0.25 percentage points, its 11th increase since March, 2022.
Futures markets this morning are pricing in just a one-in-three chance of a rate increase in September at the Fedâs next meeting. Economists also increasingly see the Fedâs tightening cycle coming to an end this week .
The European Central Bank meets on Thursday. Economists expect the E.C.B. will also raise rates by a quarter of a percentage point. Beyond that, the outlook is less clear. Inflation has begun to fall in the eurozone. Whether thatâs enough to persuade the bankâs president, Christine Lagarde, and her colleagues to pause (or stop) after this week, is less certain.
On Friday, the Bank of Japan decides. Data released last week showed headline inflation outpacing the United States for the first time in years. But economists expect the central bank to stand pat, largely because wage growth in Japan is relatively subdued. Global investors, including Warren Buffett, have flocked to relatively cheap Japanese stocks this year, enticed by the countryâs economic outlook.
In other news this week: Big Tech will be part of a parade of 165 S&P 500 firms set to report quarterly results. Investors will be tuning into the earnings calls for Microsoft and Alphabet â both on Tuesday â and Meta on Wednesday for clues on whether the explosion in interest around artificial intelligence is affecting their business outlooks.
Image
Cheddar News interviews Cynthia DiBartolo, the Tigress C.E.O., in 2021.
Credit... Sasha Maslov for The New York Times
Altice USA rethinks its bet on Cheddar News
The cable company Altice USA is weighing a potential sale of Cheddar News, the news network once billed as âCNBC for millennials,â less than five years after buying the company, DealBookâs Lauren Hirsch and The Timesâs Ben Mullin are first to report.
Altice USA has hired Goldman Sachs to help explore strategic alternatives for Cheddar News, according to three people with knowledge of the matter. They cautioned that Altice is still weighing its options and may decide against a sale. Representatives for Altice USA and Goldman declined to comment.
A sale would be a retreat from Altice USAâs big bet on the streaming news company. Altice, which is controlled by the French-Israeli billionaire Patrick Drahi, paid $200 million for the streaming network in 2019. The deal was seen as a way to elevate the companyâs news division, which also includes the News 12 channel. Cheddar had pitched itself as the future of financial news, featuring interviews with C.E.O.s, newsmakers and journalists from the floor of the N.Y.S.E.
Cheddar doesnât operate like a traditional cable business. The networkâs founder, the former BuzzFeed president Jon Steinberg, struck deals to distribute it across a wide range of platforms. Among them: Gas Station TV (which, yes, plays at the pump) and MTVâs college campus network (which Cheddar bought in 2018).
Some of those pacts arenât as profitable as cable distribution deals, however. Rather than having TV providers like Comcast pay a fee for each of Cheddarâs viewers, the channel relies mostly on advertising revenue. Thatâs a tough business model for media companies competing against tech giants like Meta and TikTok for a share of the digital ad market. (Indeed, Cheddar has recently laid off employees .)
Shares of Altice USA are down about 70 percent over the past year. The company, which provides broadband service across 22 states, reported declines in profit and revenue in the first quarter; news and advertising revenue alone fell 14 percent. Altice is set to report second-quarter earnings next week.
Has China peaked?
Predictions of Chinaâs looming economic decline are piling up as its post-Covid recovery stalls . Growth is slowing , youth unemployment is high and the crucial property sector is slumping. The slowdown has fueled a debate among think tanks and political pundits in Washington: Have we reached âpeak Chinaâ and what would that mean for the world?
The idea that Chinaâs ascendancy is running out steam was introduced by Michael Beckley, the head of the Asia Program at the Foreign Policy Research Institute in a 2018 article for Foreign Affairs magazine. Mr. Beckley believes his framing has taken off lately because it no longer seems inevitable that China will surpass the U.S. economically.
Countries at the peak of their power tend to become more aggressive , he says. In an upcoming paper in the journal International Security that was shared with DealBook, Mr. Beckley argues that the current slowdown could spark a more expansionist China (think of its growing assertiveness toward Taiwan ), based on the historical behavior of other countries like the U.S. in the late 19th century. Still, as the American example shows, Mr. Beckley says, âa peaking power isnât doomed to decline.â
âWe need to be carefulâ about assumptions because there is no reliable data , said Representative Raja Krishnamoorthi of Illinois, the top Democrat on a House committee on competition with China. While the Chinese economic engine is sputtering, he says that Beckleyâs theory is misguided because it is focused on the âartificialâ plateaus of another economy rather than how to boost growth in the U.S.
Itâs too soon to call the beginning of the end of Chinese growth, says Ian Bremmer, president of the political risk consultancy Eurasia Group. He argues that Chinaâs growth will outpace the U.S.âs and that the âpeak Chinaâ theory is âideologically freighted.â It is advanced by those with a âzero sumâ worldview who fail to recognize that Chinaâs successes can be a win for the U.S. and that Beijingâs global influence is likely to continue to grow with its economy. And American businesses, like Tesla and the N.B.A., that are banking on Chinese markets, donât want to see a decline. âA hell of a lot of people are very deeply excited to make money on China,â Mr. Bremmer said.
Image
THE SPEED READ
Deals
Bain Capital agreed to buy the Indian mogul Gautam Adaniâs stake in his shadow bank. (Bloomberg)
The Swiss private bank Julius Baer pulled in more than $10 billion in new client money following the near demise of Credit Suisse. (FT)
Policy
âA âLeaner-Meanerâ DeSantis Campaign Faces a Reboot and a Reckoning.â (NYT)
Worldcoin , the cryptocurrency project founded by the OpenAI chief Sam Altman, began operating on Monday despite regulatory pushback. (FT)
Drugmakers are waging war on the Biden administrationâs move to let Medicare negotiate the price of some prescription medicines. (NYT)
Best of the rest
How did the Mexican lager Modelo Especial become Americaâs best-selling beer ? (NYT)
American businesses have become hooked on tipping , and the practice extends well beyond restaurants and bars. (WSJ)
âWhy Americaâs Largest Tool Company Couldnât Make a Wrench in America â (WSJ)
Image
Weâd like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com .
Andrew Ross Sorkin is a columnist and the founder and editor at large of DealBook. He is a co-anchor of CNBCâs "Squawk Box" and the author of âToo Big to Fail.â He is also a co-creator of the Showtime drama series "Billions." More about Andrew Ross Sorkin
Ravi Mattu is the managing editor of DealBook, based in London. He joined The New York Times in 2022 from the Financial Times, where he held a number of senior roles in Hong Kong and London. More about Ravi Mattu
Bernhard Warner joined the The Times in 2022 as a senior editor for DealBook. Previously he was a senior writer and editor at Fortune focusing on business, the economy and the markets. More about Bernhard Warner
Sarah Kessler is a senior staff editor for DealBook and the author of âGigged,â a book about workers in the gig economy. More about Sarah Kessler
Michael de la Merced joined The Times as a reporter in 2006, covering Wall Street and finance. Among his main coverage areas are mergers and acquisitions, bankruptcies and the private equity industry. More about Michael J. de la Merced
Lauren Hirsch joined The Times from CNBC in 2020, covering deals and the biggest stories on Wall Street. More about Lauren Hirsch
Ephrat Livni reports from Washington on the intersection of business and policy for DealBook. Previously, she was a senior reporter at Quartz, covering law and politics, and has practiced law in the public and private sectors.  More about Ephrat Livni
Give this article
Advertisement
SKIP ADVERTISEMENT
Single Line Text
Advertisement. SKIP ADVERTISEMENT. DealBook Business and Policy. Supported by. SKIP ADVERTISEMENT. DealBook Newsletter. Rebranding the social network as X marks the billionaireâs latest gamble to reinvent the company, after buying it last year for $44 billion. Give this article. By Andrew Ross Sorkin , Ravi Mattu , Bernhard Warner , Sarah Kessler , Michael J. de la Merced , Lauren Hirsch and Ephrat Livni. 7:55 a.m. ET. Image. Image. Twitterâs new logo spells the end of one of the internetâs best-known brands. Credit... Carlos Barria/Reuters. Twitter has flown away. Bye-bye, blue bird: Twitter overnight began rebranding itself as X , replacing its longtime logo with a stylized symbol that was projected onto its San Francisco headquarters. The move underscored Elon Muskâs ambition to make the social network a key part of his longtime goal of creating an âeverything app.â But it is also another risky gamble to reinvent a business that has struggled since he paid $44 billion for it last year. âLights. Camera. X!â wrote Linda Yaccarino , the companyâs C.E.O., as the social network starting rolling out its new branding. Gone is the stylized bird , once dubbed Larry T. Bird by the Twitter co-founder Biz Stone, which became one of the most famous internet logos â and which the company has described as its most recognizable asset . The platformâs about page hasnât yet been updated, but Ms. Yaccarino repeatedly referred to X in a series of tweets outlining the companyâs ambitions. Expect X to more fully pervade the company: Mr. Musk described an internal message to employees over the weekend as the last heâd send from Twitter , and he told a user that a post should be called an âxâ instead of a tweet. Mr. Musk was very clearly behind the makeover, having long been fascinated by the X identity . His second start-up was X.com, which eventually became PayPal. (The writer Walter Isaacson shared tantalizing snippets of his coming Musk biography about that.) Mr. Musk incorporated âXâ into the name of SpaceX and Teslaâs first car model, and he recently named his new A.I. start-up xAI. Not everyone was on board with the move , though some ad executives said what matters more is whether users stick with the platform. Ms. Yaccarino briefed marketers Sunday on the latest changes at the company, according to The Financial Times, which also include collaborating more with xAI. (The revamp may raise questions about how much authority she wields at the company, after Mr. Musk imposed view limits for users that didnât please advertisers.) Itâs more than a branding exercise. As Twitter has struggled under Mr. Musk â a pivot to relying on subscriptions hasnât made up for a 50 percent drop in ad revenue , negative cash flow, and a new threat from Metaâs Threads â he has increasingly emphasized the companyâs importance in what he calls X. The billionaire has long dreamed of creating a super-app that could serve as a platform for everything users could do online, much as WeChat does in China. But as third-party data suggests user numbers are falling, itâs not clear how much runway Mr. Musk has to get a reborn X airborne. Image. HEREâS WHATâS HAPPENING. âBarbenheimerâ sets a postpandemic box office record. âBarbieâ and âOppenheimerâ raked in a combined $235.5 million in the United States and Canada, the best opening weekend since âAvengers: Endgameâ in 2019. Itâs good news for a movie industry beset by writersâ and actorsâ strikes and underperformance by expensive blockbusters, but it suggests that Hollywoodâs dependence on franchises is increasingly failing to pay off. Wildfires force evacuations in Greece. Officials ordered thousands off the tourist hot spots of Rhodes and Corfu this weekend after fires burned swaths of the islands. Southern Europe, like much of the Northern Hemisphere, has been roasted by temperatures soaring over 100 degrees Fahrenheit. Morgan Stanley gives âBidenomicsâ strong marks. Ellen Zentner, the bankâs chief U.S. economist, said that President Bidenâs economic policy, including sweeping investments in infrastructure, has led to a surge in manufacturing, construction and hiring that helped G.D.P. grow more than anticipated. Thatâs good new for Mr. Biden, who has promoted his economic record to bolster his re-election campaign. Adidas reportedly sees strong demand for Yeezy shoes. The German shoemaker received about $563 million worth of online orders for the Kanye West-designed sneakers that it sought to offload this spring, according to The Financial Times. Last year, Adidas ended its partnership with the rapper after he made antisemitic remarks, but has sought alternatives to destroying its Yeezy inventory, which would lead to a $550 million write-down. Image. A big week for central banks. Investors are bracing for a consequential week of interest-rate decisions that could set the stage for a second-half rebound for the worldâs biggest economies. Wall Street is increasingly buying a âsoft landingâ for the U.S. economy, betting that higher interest rates will continue to bring down inflation without causing a recession. Jon Gray , Blackstoneâs president, believes that the worst is over and that M.&.A. activity will pick up again as inflation moderates. Investors are feeling bullish too, pushing the S&P 500 roughly 19 percent higher this year on the belief that central banks will grow less hawkish. That vision will be tested on Wednesday, decision day for the Fed . After pausing rate rises last month, the central bank is expected to raise borrowing costs by 0.25 percentage points, its 11th increase since March, 2022. Futures markets this morning are pricing in just a one-in-three chance of a rate increase in September at the Fedâs next meeting. Economists also increasingly see the Fedâs tightening cycle coming to an end this week . The European Central Bank meets on Thursday. Economists expect the E.C.B. will also raise rates by a quarter of a percentage point. Beyond that, the outlook is less clear. Inflation has begun to fall in the eurozone. Whether thatâs enough to persuade the bankâs president, Christine Lagarde, and her colleagues to pause (or stop) after this week, is less certain. On Friday, the Bank of Japan decides. Data released last week showed headline inflation outpacing the United States for the first time in years. But economists expect the central bank to stand pat, largely because wage growth in Japan is relatively subdued. Global investors, including Warren Buffett, have flocked to relatively cheap Japanese stocks this year, enticed by the countryâs economic outlook. In other news this week: Big Tech will be part of a parade of 165 S&P 500 firms set to report quarterly results. Investors will be tuning into the earnings calls for Microsoft and Alphabet â both on Tuesday â and Meta on Wednesday for clues on whether the explosion in interest around artificial intelligence is affecting their business outlooks. Image. Cheddar News interviews Cynthia DiBartolo, the Tigress C.E.O., in 2021. Credit... Sasha Maslov for The New York Times. Altice USA rethinks its bet on Cheddar News. The cable company Altice USA is weighing a potential sale of Cheddar News, the news network once billed as âCNBC for millennials,â less than five years after buying the company, DealBookâs Lauren Hirsch and The Timesâs Ben Mullin are first to report. Altice USA has hired Goldman Sachs to help explore strategic alternatives for Cheddar News, according to three people with knowledge of the matter. They cautioned that Altice is still weighing its options and may decide against a sale. Representatives for Altice USA and Goldman declined to comment. A sale would be a retreat from Altice USAâs big bet on the streaming news company. Altice, which is controlled by the French-Israeli billionaire Patrick Drahi, paid $200 million for the streaming network in 2019. The deal was seen as a way to elevate the companyâs news division, which also includes the News 12 channel. Cheddar had pitched itself as the future of financial news, featuring interviews with C.E.O.s, newsmakers and journalists from the floor of the N.Y.S.E. Cheddar doesnât operate like a traditional cable business. The networkâs founder, the former BuzzFeed president Jon Steinberg, struck deals to distribute it across a wide range of platforms. Among them: Gas Station TV (which, yes, plays at the pump) and MTVâs college campus network (which Cheddar bought in 2018). Some of those pacts arenât as profitable as cable distribution deals, however. Rather than having TV providers like Comcast pay a fee for each of Cheddarâs viewers, the channel relies mostly on advertising revenue. Thatâs a tough business model for media companies competing against tech giants like Meta and TikTok for a share of the digital ad market. (Indeed, Cheddar has recently laid off employees .) Shares of Altice USA are down about 70 percent over the past year. The company, which provides broadband service across 22 states, reported declines in profit and revenue in the first quarter; news and advertising revenue alone fell 14 percent. Altice is set to report second-quarter earnings next week. Has China peaked? Predictions of Chinaâs looming economic decline are piling up as its post-Covid recovery stalls . Growth is slowing , youth unemployment is high and the crucial property sector is slumping. The slowdown has fueled a debate among think tanks and political pundits in Washington: Have we reached âpeak Chinaâ and what would that mean for the world? The idea that Chinaâs ascendancy is running out steam was introduced by Michael Beckley, the head of the Asia Program at the Foreign Policy Research Institute in a 2018 article for Foreign Affairs magazine. Mr. Beckley believes his framing has taken off lately because it no longer seems inevitable that China will surpass the U.S. economically. Countries at the peak of their power tend to become more aggressive , he says. In an upcoming paper in the journal International Security that was shared with DealBook, Mr. Beckley argues that the current slowdown could spark a more expansionist China (think of its growing assertiveness toward Taiwan ), based on the historical behavior of other countries like the U.S. in the late 19th century. Still, as the American example shows, Mr. Beckley says, âa peaking power isnât doomed to decline.â âWe need to be carefulâ about assumptions because there is no reliable data , said Representative Raja Krishnamoorthi of Illinois, the top Democrat on a House committee on competition with China. While the Chinese economic engine is sputtering, he says that Beckleyâs theory is misguided because it is focused on the âartificialâ plateaus of another economy rather than how to boost growth in the U.S. Itâs too soon to call the beginning of the end of Chinese growth, says Ian Bremmer, president of the political risk consultancy Eurasia Group. He argues that Chinaâs growth will outpace the U.S.âs and that the âpeak Chinaâ theory is âideologically freighted.â It is advanced by those with a âzero sumâ worldview who fail to recognize that Chinaâs successes can be a win for the U.S. and that Beijingâs global influence is likely to continue to grow with its economy. And American businesses, like Tesla and the N.B.A., that are banking on Chinese markets, donât want to see a decline. âA hell of a lot of people are very deeply excited to make money on China,â Mr. Bremmer said. Image. THE SPEED READ. Deals. Bain Capital agreed to buy the Indian mogul Gautam Adaniâs stake in his shadow bank. (Bloomberg) The Swiss private bank Julius Baer pulled in more than $10 billion in new client money following the near demise of Credit Suisse. (FT) Policy. âA âLeaner-Meanerâ DeSantis Campaign Faces a Reboot and a Reckoning.â (NYT) Worldcoin , the cryptocurrency project founded by the OpenAI chief Sam Altman, began operating on Monday despite regulatory pushback. (FT) Drugmakers are waging war on the Biden administrationâs move to let Medicare negotiate the price of some prescription medicines. (NYT) Best of the rest. How did the Mexican lager Modelo Especial become Americaâs best-selling beer ? (NYT) American businesses have become hooked on tipping , and the practice extends well beyond restaurants and bars. (WSJ) âWhy Americaâs Largest Tool Company Couldnât Make a Wrench in America â (WSJ) Image. Weâd like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com . Andrew Ross Sorkin is a columnist and the founder and editor at large of DealBook. He is a co-anchor of CNBCâs "Squawk Box" and the author of âToo Big to Fail.â He is also a co-creator of the Showtime drama series "Billions." More about Andrew Ross Sorkin. Ravi Mattu is the managing editor of DealBook, based in London. He joined The New York Times in 2022 from the Financial Times, where he held a number of senior roles in Hong Kong and London. More about Ravi Mattu. Bernhard Warner joined the The Times in 2022 as a senior editor for DealBook. Previously he was a senior writer and editor at Fortune focusing on business, the economy and the markets. More about Bernhard Warner. Sarah Kessler is a senior staff editor for DealBook and the author of âGigged,â a book about workers in the gig economy. More about Sarah Kessler. Michael de la Merced joined The Times as a reporter in 2006, covering Wall Street and finance. Among his main coverage areas are mergers and acquisitions, bankruptcies and the private equity industry. More about Michael J. de la Merced. Lauren Hirsch joined The Times from CNBC in 2020, covering deals and the biggest stories on Wall Street. More about Lauren Hirsch. Ephrat Livni reports from Washington on the intersection of business and policy for DealBook. Previously, she was a senior reporter at Quartz, covering law and politics, and has practiced law in the public and private sectors.  More about Ephrat Livni. Give this article. Advertisement. SKIP ADVERTISEMENT.