A 29-year-old Elon Musk was preparing to board a flight to Australia in 2000 with his first wife, Justine Wilson, for their belated honeymoon. It was an opportunity for the couple to see the Summer Olympics in Sydney and a chance for Musk to meet with potential investors for his financial technology startup that was originally called X.com.
That’s when he learned that his fellow executives at the company had delivered letters of no confidence about Musk’s leadership to the company’s board. The board removed him as CEO, and the startup went on to become the money-transferring giant PayPal, with a $81.1 billion market cap.
It was “one of the nastiest coups in Silicon Valley’s long, illustrious history of nasty coups,” Ashlee Vance wrote in his 2015 Musk biography, Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future.
Musk’s obsession with the letter X has been much discussed since he rebranded Twitter to X on Sunday. The change has been widely criticized and faces legal hurdles over the trademark’s ownership. But this isn’t Musk’s first attempt at overhauling a business and calling it X. He tried the same thing at PayPal, and he failed.
Before Twitter, there was PayPal
In 2000, Musk’s X.com merged with its competitor Confinity—creator of PayPal—cofounded by the billionaire Peter Thiel.
As CEO of the combined company, Musk had visions of expanding its focus beyond a money-transfer service and wanted to rebrand accordingly. He proposed scrapping the PayPal name and shifting the branding to the letter X.
The problem? No one else on the team liked the proposed name, and customers thought that “X.com” sounded like an adult website.
These are all porn except one. That one's Twitter. Pic.twitter.com/VYUWOFsFTv
— Jesse McLaren (@McJesse) July 24, 2023
“Musk was unmoved, possibly, employees gossiped, because of sunk costs,” Max Chafkin wrote in his 2021 book titled The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power. “He’d paid at least $1 million to acquire the X.com domain name, legend within the company had it.”
Musk was ousted from the company in September 2000 and replaced by Thiel. The board explained its decision by blaming Musk’s “lack of a cohesive business model” and “technological issues” too great to overcome, the Washington Post reported.
In 2001, the company’s name was changed to PayPal. Sixteen years later, Musk bought the domain X.com back from PayPal for an undisclosed amount.
Elon’s second attempt at making ‘X’ happen
The billionaire never gave up on his love for the letter.
His other X-related ventures since then include the rocket company SpaceX, artificial intelligence company xAI (intended to rival ChatGPT maker OpenAI), and the Model X at Tesla. He even named his child, born in 2020, with the musician Grimes, X Æ A-Xii, nicknamed X.
Musk’s massive overhaul of Twitter is still in progress.
He’s teased his intentions of transforming the social media company into an “everything app,” reminiscent of China-based WeChat. He took steps to make it a reality when he applied for a license at the beginning of the year for then-Twitter to facilitate in-app payments and in April merged the platform with a shell company called X Corp, according to legal filings.
But Musk has already run into problems with the Twitter name change, one of them being that he doesn’t own the trademark “X.” The limited number of ways to stylize the representation of two intersecting lines makes it one of the most difficult letters to trademark.
On Wednesday, he seized the account name—@X—of Gene Hwang, one of his users who’s held the handle since 2007. Hwang “suspected” this would happen eventually, he told NBC News.
And by changing Twitter’s name, Musk is reportedly wiping out anywhere between $4 billion to $20 billion in brand value built up by Twitter over the years.
Not to mention, users seem to hate the name change, and “X.com,” to many, still sounds like a pornography site.