Facebook will become Meta in rebranding seen as ‘an attempt at distraction’

 

Meta is the new name for Facebook Inc.

The change, announced Thursday by Facebook
FB,
+3.48%

founder and Chief Executive Mark Zuckerberg, relegates Facebook to one of the company’s three major platforms — which also includes Instagram and WhatsApp — rather than the overarching brand amid whistleblower revelations and regulator recriminations.

Meta doesn’t exactly roll off the tongue, but Zuckerberg & Co. hope it helps rebrand the beleaguered company and reposition it as a metaverse player. Whether that is enough to rehabilitate the company’s tattered reputation is unlikely, branding experts told MarketWatch.

Facebook’s name shift was announced by Zuckerberg, chief executive and co-founder, during the company’s Connect conference Thursday. The change reflects the company’s hard pivot into what it calls the “next evolution of social technology,” where mixed reality brings people together to play games, exercise, watch concerts together, work remotely, and communicate.

“Right now, our brand is so tightly linked to one product that it can’t possibly represent everything that we’re doing today, let alone in the future,” Zuckerberg said. “Over time, I hope that we are seen as a metaverse company, and I want to anchor our work and identity on what we’re building toward.”

Zuckerberg did not say if Facebook’s stock ticker would change. The ticker META is already used by the Roundhill Ball metaverse ETF
META,
+1.27%
,
but other companies that have changed their name have maintained their original ticker, including Google parent Alphabet Inc.
GOOGL,
-0.35%

GOOG,
-0.18%

Metaverse is the “next chapter of our work,” said Zuckerberg, who predicted 1 billion people will be part of this virtual world within the next decade.

“We’ve gone from desktop to web to phones from text to photos to video, but this isn’t the end of the line,” Zuckerberg said. “The next platform and medium will be even more immersive and embodied Internet where you’re in the experience, not just looking at it, and we call this the metaverse.”

“Facebook will become a branded arm as will Oculus and any other metaverse extensions,” Tim Bajarin, chairman of Creative Strategies, told MarketWatch ahead of the event. “If managed correctly, it sets up their future road maps.”

The name change amounts to slapping a fresh coat of paint on a defaced brand name, says Rebecca Biestman, chief marketing officer of Reputation.com.

“While we don’t know how long this rebrand has been in the works, Facebook’s rebrand seems to be a reaction to a steady decline in its brand’s reputation,” Biestman told MarketWatch. “Truly innovative companies don’t wait for an impending event to update their brand, rather they typically use rebranding as a strategy to maintain a competitive advantage.”

The embattled Zuckerberg — whose company faces a torrent of lawsuits, investigations, and proposed legislation aimed at regulating its expansive platforms — said during an earnings call Monday that Facebook is shifting its focus to adults 18-29. “We are retooling our teams to make serving young adults our North Star,” he said of the yearslong effort.

“In the coming years, I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company,” he said on the call.

Read more: Opinion: Dear Facebook: No one cares about Oculus; give us Instagram revenue!

But the new name “seems to be a very small way to respond to calls [to break up Facebook], albeit without actually changing anything,” Umang Shah, head of global digital at Medidata Solutions, told MarketWatch. “At worst, it’s an attempt at distraction.”

Instead of a “confusing name change,” Facebook should focus on addressing criticisms of how it filters and distributes content, said Shah, who previously held social and digital marketing roles at Microsoft Corp.
MSFT,
+0.15%
,
Walmart Inc.
WMT,
+0.32%
,
and Campbell Soup Co.
CPB,
+0.63%
.

The social-networking company continues to be assailed for its treatment of content and data, and for ignoring clear signs internally that the digital platform is harmful — especially to children. This week, Sens. Richard Blumenthal, D-Conn., and Edward Markey, D-Mass., and Rep. David Cicilline, D-R.I., called for legislation aimed at the company, the Federal Trade Commission reportedly is looking into yet another probe, and the New York Times called the Mark Zuckerberg-as-CEO era over.

Indeed, 63% of Facebook/Instagram users said they have been the victims of misinformation, according to a Consumer Reports survey of 2,263 U.S. adults in August.

Facebook joins a long line of tech company rebrandings with its stab at name reinvention. Google became Alphabet Inc., Apple Computer Inc. was pared to Apple Inc.
AAPL,
+2.54%
,
Snapchat Inc. was shortened to Snap Inc.
SNAP,
+4.02%

While the latter two moves simplified messaging, the Google-Alphabet change continues to confound consumers.

Ken Segall, who came up with the “Think Different” marketing campaign for Apple and put the “i” into iPhone, says a name change won’t change anything.

“They have mountains of trouble to deal with,” he says. “Changing the hearts and minds of billions of users with a new title does not do it. To get there, they need to make fundamental organizational changes.”

Of course, it could all blow up in Facebook’s face and become a “New Coke” moment. Coca-Cola Co.’s
KO,
+0.64%

campaign to give an informal name to a new formula for its most popular soft drink in the mid-80s fizzled, and was eventually discontinued in July 2002.

“In the short term, the name change will likely not do much to silence the critics,” Dipanjan Chatterjee, vice president and principal analyst at Forrester, told MarketWatch. “That will happen in any case because the half-life of consumer outrage seldom extends beyond a news cycle.”

Source link

2021-10-28