Donald Trump’s Familiar Advice to Mark Zuckerberg

The names of people, things and businesses – shape how we see them. Every parent has the experience of naming a baby and then saying that the newborn suddenly “is” her new name. Similarly, a company that changes its name changes its image in everyone’s eyes.

Facebook is far from the first company to have sought to improve its image in this way. However, history shows that a corporate renaming can pose a bigger problem: a new name, catchy and concise, can include everything that people already disliked about a company but previously unable to articulate. were not capable.

See how Tribune Publishing Company changed its name to Tronc Inc. in 2016.

The company described its new name as a mashup of “Tribune Online Stuff”, or as the British term for a restaurant-tip box in which money is deposited for later distribution. The idea seemed like Tronk Inc. would pool the world’s news. and parcel it to consumers online.

Still, while it called itself “the next media company,” Tronk was winding down some of its best assets. The name made the company’s travels indispensable. Soon, comedian John Oliver said that Tronk “sounds like an ejaculating elephant.”

Here’s a more serious example of a name change that closed the mind instead of opening them.

In early 1987, United Airlines parent UAL Inc. announced that it would change its name to Allegis Corp. Seeking to expand its Hertz, Hilton and Westin units, the company wanted to indicate that it was not just an airline, but also a car-rental and hotel-room provider.

Investors didn’t like the concept, which others had already tried unsuccessfully — and the name Allegis quickly became a symbol of the company’s unpopular strategy. Late night television host Johnny Carson made fun of the name in one of his monologues.

One disgruntled shareholder was an opportunistic real-estate developer named Donald Trump, who bought about 5% of the company’s shares. He said the name Allegis sounded like “the next world-class disease”. This made him “more militant as an investor and more inclined to speak out against management, because I thought it was very wrong,” Trump said in June 1987. “And I think it had an important psychological role. It took even more anger out on management and made a lot of people say they finally got it.”

That’s because it’s easier to criticize a name than a tactic, says Margaret Wolfson, founder of River & Wolf LLC, a naming agency in New York. “It takes a lot of time and analysis to talk about a strategy,” she says. “But names take hold: they’re easy to catch, and criticizing them can turn into a blood game.”

When veteran airline executive Stephen Wolf came on as chief executive of Allegis in late 1987, he was “indifferent to the name,” he told me this week, but focused on changing the strategy to abandon non-airline assets. . In May 1988, shareholders left Allegis and renamed the company UAL Corp. Voted to do so—almost the same as its previous identity.

To me, the most remarkable thing about this story is that Ellegis isn’t such a bad name.

Consider this a sprawling staffing and business-services firm founded in 1983 and based in Hanover, MD. With nearly 20,000 employees and over $12 billion in annual revenue, it is ranked 22nd on Forbes’ 2020 list of the largest private companies in the US.

In 1983 Aerotek Inc. The firm rebranded itself in 2001. Its new name? Alegis Group.

Many people ridiculed Facebook for changing its name to Meta—jokingly that it’s short for “metastasizing,” or “I’m Meta Girl,” who became an antivaxxer, and so forth—but the risk isn’t. that people will not like the name. It’s like they’ll love it so well—as a cryptic embodiment of everything they dislike about the company.

Mr Zuckerberg has said it is “a ridiculous thing” to suggest that the name change is to perpetuate negative publicity, such as revelations by The Wall Street Journal earlier this year about Facebook’s marketing and other practices. Instead, the name change reflects the company’s commitment to the Metaverse, or the emerging digital world in which people can shop, socialize, work and play with virtually no limits.

Facebook’s appeal among younger users of its traditional services is fading, so the company is moving into the metaverse.

The meta name gives more urgency to that mission. As Mr Zuckerberg wrote in late October, “I hope people around the world learn about the Meta brand and our future.”

It’s not clear how much time and energy everyone will want to devote to that future. Some consumers will like it. To others, it may seem like a dystopia of “living” on a video screen while eating cold pizza alone in a windowless cellar, almost never seeing another human face-to-face.

The Latin proverb “Nomen est omen” can be translated as “Your name is your destiny.” By renaming it Meta, Facebook has identified itself inextricably with a Metaverse future. In the eyes of the public, the business will become as it is named. This could end up making the company more of a lightning rod for criticism than ever before.

In his regular Intelligent Investor column, Jason Zweig writes about trends in the investing world, portfolio strategy, and financial decision-making. Sign up for their newsletter here.