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The Logic Behind Renaming Facebook | Internet News – InternetNews.com


Naming is one of those marketing department jobs that should be avoided like the plague, because everyone will have an opinion. And in the end, the only opinion they’ll agree on is that the person who came up with the name is an idiot.

I’m speaking from experience; I was That Idiot.

The naming process is complex. You have to craft a name that most people inside and outside the company will like – without having the data to make that determination. You also must find a name that no one else is using, and if you are or plan to be a multinational, that name can’t be anything close to a word in another language that means something derogatory. Yes, I did naming once, thinking it would be easy, only to find it was one of the most significant nightmare projects I’ve ever had.

However, it makes sense for Facebook to rename itself because the name it has is its current primary product and can’t reflect the breadth of what the company does today (like Oculus, for instance), let alone what it will do tomorrow. We don’t know what Facebook’s new name will be, but we can determine whether the effort is well or poorly done.

Let’s talk about company naming this week.

Why Rename a Company?

At a corporate level, there are three primary reasons to consider renaming. First, your current name has a huge negative connotation, and its equity has gone negative.

IBM had this problem in the early 1990s but chose to revitalize the IBM brand rather than rebrand the company. This path was undoubtedly more expensive but, given the connection the employees had to the brand, it was also pragmatic because the cost of an employee revolt, had it been renamed, could have made the difference between IBM’s survival or failure. So IBM had no real choice but to repair, rather than replace, the brand.

Often, a company that has destroyed its brand has also destroyed its income sources and may not have the funds it needs to effectively rebrand. While this can address a negative brand problem, the lack of resources can fail in the effort and potentially accelerate a decline. An example of this would be ValueJet, which acquired the smaller AirTran Airways after a massive crash and adopted that brand.

The second reason to consider renaming is that you want to limit potential liability. What drives this decision is if you’ve not only grown to the point where the brand doesn’t encompass what you do, but you want to make sure you limit liability exposure to a sub-brand and company rather than the entire firm. An example of this is Alphabet, Google’s parent company, where the increasing risk of litigation and potential regulation made the firm nervous enough to create a parent entity and brand, Alphabet, and then place the large unit into a sub-brand that would firewall off any damage and regulation below the entire company. This protection is iffy and may not work because countries can often make their own rules, and it might be better to mitigate this risk through improved behavior rather than rebranding.

Facebook’s Reasons for Renaming

The third reason to rename is when you have outgrown the brand or come to represent a product that no longer encompasses the extent of the firm’s offerings. This decision criterion is what Facebook is considering, though it has valid reasons to use excuse number two, given it also faces significant litigation and regulatory exposure.

But the name Facebook is connected hard to Facebook’s social network, which doesn’t encompass initiatives like its very successful Oculus product line. Facebook is anticipating a move into the metaverse, which will also be far removed from Facebook, justifying a new name that will function much like Alphabet’s or GM’s does and represent the growing umbrella nature of the company, not any individual product.

Facebook’s reasons for renaming the company fall solidly in two distinct areas. First, it is even more at risk of regulatory action than Google is at the moment and could use a limiting defense. The Facebook name itself has taken a hit because of privacy concerns and its failure to stop disinformation campaigns, while its Instagram holding has been rocked by revelations about the company’s indifference to the damage the platform does to teen girls in particular.

But an even more important reason to make this change now is that the company plans to expand its offerings significantly, and a parent brand that could better encompass both existing separate businesses like Oculus and coming businesses that will emerge in the metaverse justifies this renaming as it positions Facebook for a more product-diverse future.

Further reading: How Facebook Screwed Up Horizon Workrooms



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