Why You Can Trust CNET When Net companies outgrow their name
A growing number of companies selling online may face an odd problem if they expand their Web business models: being saddled with a name that no longer suits what they do.
When many e-tailers, including eToys, E*Trade, and CDNow, moved online, they snapped up logical names that reflected their business. Other companies followed, building brands on names that used the letter "e" (ecars.com, edolls.com) or a simple product name with a "dot com" tacked on.
The trouble with that strategy, industry observers say, is that when companies move to expand sales, the name may no longer suit the company.
"We are seeing more and more companies outgrowing their names because they are entering different industry categories," said David Redhill, a spokesman for Landor Associates, a branding firm that has worked with Netscape, Microsoft, and PlanetRX.
Indeed, eToys now offers children's books and software in addition to toys, E*Trade has moved from just an online brokerage to offering banking and other financial services, and CDNow's name may soon be outdated with the threat of downloadable music looming.
One company that already took the quick change route is Internet software superstore "Software.net," which last year moved to change its name to Beyond.com when it expanded its offerings to include handheld devices and game cartridges. While Software.net got a name that met its needs, analysts say it's getting harder for both established and new companies alike to land domain names in a market where the pickings are slim.
In February, Allapartments.com pushed the company's image beyond the apartment theme by changing its name to the less succinct SpringStreet.com. The new name--which uses the word "spring" to invoke new beginnings--came with a company brand relaunch focused on providing a "hassle-free moving experience" that could include a new city or town, new home, new career, or new friends.
Indeed, giant online retailer Amazon.com seems to have picked a name that it's unlikely to outgrow any time soon. The name worked when the company was just a bookseller and suits the company today as it strives to become the Wal-mart of the Internet.
Amazon's chief executive Jeff Bezos picked that name because he was looking for something that began with an "A," said Amazon spokeswoman Kay Dangaard. At the time, choosing a name at the beginning of the alphabet was key for the business, as search engines trawled for names alphabetically.
eToys has no plan to give up its name any time soon.
"When we started eToys, the mission was always to be in children's products," said eToys spokeswoman Suki Shattuck. "I think nothing more encompasses children than references to toys."
Meanwhile, Jon Nordmark, chief executive at eBags, a site devoted to backpacks, luggage, brief cases, and diaper bags, said he is happy with the company's name even though the company plans to expand sales to pens, travel alarms, and travel kits.
"We are trying to create a highly trustworthy site--and provided we can continue to deliver products in a timely way--I don't think we will have trouble expanding into related products," he said.
Players like eBags and the Golf Ball Place can expand their offerings without risking sales in their niche category, analysts said.
Still, the right name is not necessarily the difference between success and failure, analysts said, noting that excellent customer service can do wonders in creating brand recognition and trust.
"The best thing is to get it right in the first place," said Redhill.