NEWS AND COMMENTARY
September 8, 2000
The Forsaken Dot-Coms
By Betsy Schiffman, Forbes
The End of An Era: Dot-Coms Rush to Become Not-Coms ... Weiss comments
NEW YORK - If Fred Astaire and Ginger Rogers kept their given names, the dashing duo would have been called Frederick Austerlitz and Virginia McMath--names that don't exactly scream elegance. Likewise, Internet companies that keep their original dot-com names are more likely to be associated with doom than profit.
As many dot-coms are losing the name as there are people racing to claim it. New York-based About.com (nasdaq: BOUT) officially changed its name to About Inc.; Hollywood, Calif.-based JFax.com (nasdaq: JCOM) switched to j2 Global Communications; Redmond, Wash.-based InfoSpace.com, dumped the dot-com. And those are only a few of the better-known examples.
3Dshopping.com (amex: THD) changed its name to O2 Essential Marketing Technologies; BuildWBT.com emerged as ePath Learning; H-Net.com changed its name to H-Net.net; and ScreamingMedia.com (nasdaq: SCRM) wants to be known as ScreamingMedia Inc.--urging the press in a sternly worded release "not [to] refer to the company by its former name, ScreamingMedia.com."
The rise and fall of dot-com names may be compared to the overuse of words like "data," "process" and "info" in previous decades, says Naseem Javed, a New York-based corporate naming consultant. "Those names lasted two or three years before they died out in the late '70s," he says. "Now the word 'data' evokes images of old computers and punch cards."
Javed estimates that there is a company that changes its name every minute, whether it's to modernize or to signal a merger. The assumption is, however, that companies that change their names must incur greater marketing expenses to introduce a new brand. Steven Hamerslag, chief executive of the newly named j2 Global, concedes that the company plans to hike marketing spending. "The great news is that on the Web it's pretty easy to redirect our existing customer base to the new domain," Hamerslag says.
For About, this is the second name change in three years. Launched as The Mining Co. in 1997, it changed its name to About.com in 1999, until just a few months ago, when it changed again. The first name change cost about $12 million, according to John Caplan, the company's senior vice president of marketing. "We found that in 45 days, About.com eclipsed The Mining Co. in brand awareness," says Caplan.
Of the nearly 50 companies that filed for IPOs in August, several companies' names included the word "Wireless" or "Communications," but there wasn't a single dot-com in the bunch.
That doesn't mean there aren't a few brave companies left: Nearly 15 companies with dot-com names expect to price their IPOs in September.
But money talks, so the prices of dot-com IPOs may speak for themselves.
In a sure sign that the Internet bubble has burst for good, dot-coms are shedding their once-lucrative suffixes. It used to be that any company ending in dot-com or dot-net would automatically attract investors like bees to honey. Times have changed. Now, investors are fleeing from dot-coms. They've become disenchanted with businesses that have never showed even a potential for profit. With this type of business model, it is hardly a mystery why investors are dumping these stocks. The mystery is why investors were so enamored in the first place. One thing is certain: changing a company's name does not mean that it will turn a profit. A tiger can't change his stripes, and dot-coms can't change the fact that they are dot-bombs.
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