On Monday, Facebook (NASDAQ:FB) announced it was re-branding itself to FACEBOOK. The same name, but all-caps. A shouted version of Facebook. And with dynamic colors. Why?
There are a range of theories, many of which have made Facebook the butt of jokes on Twitter (NYSE:TWTR), but there are two front runners. The first suggests this is a marketing stunt cleverly designed to get people talking about the name “change,” thus distracting them from all the negativity surrounding the company.
The more likely is to make the point that FACEBOOK is a parent company, not just Facebook the social media platform, in an attempt to fend off further Federal Trade Commission investigations. Either way, the new FACEBOOK received a shrug from the markets, with FB stock up 0.36% since Friday’s close.
Facebook Announce Rebranding, FB Stock Price Goes Nowhere
On Friday evening, Facebook stock closed at $193.62, after a week that saw gains from a third-quarter earnings and revenue beat. Then on Monday, the company surprised everyone with the announcement that it was re-branding from Facebook to FACEBOOK.
In a blog post announcing the move, the company’s chief marketing officer wrote:
Facebook started as a single app. Now, 15 years later, we offer a suite of products that help people connect to their friends and family, find communities and grow businesses. Today, we’re updating our company branding to be clearer about the products that come from Facebook. We’re introducing a new company logo and further distinguishing the Facebook company from the Facebook app, which will keep its own branding. The new branding was designed for clarity, and uses custom typography and capitalization to create visual distinction between the company and app.
CEO Mark Zuckerberg also chimed in, posting:
When I started Facebook 15 years ago, I had no idea it would eventually include Messenger, Instagram, WhatsApp, Oculus, Workplace and more. Many people don’t know we build these products or that our teams often work together. But we believe people should, because it’s important for people to know who’s behind the products they use. Today we’re introducing a new company logo to be clearer about the apps and technologies that come from Facebook. Here’s what it’ll look like when you start seeing it across our products.
The impact of the announcement on FB stock price was minimal, with FB closing at $194.72 on Monday.
Reaction to the Rebranding
Social media had a lot of fun at FACEBOOK’s expense on Monday. Even Twitter CEO Jack Dorsey got in on the fun, tweeting “Twitter from TWITTER.”
If the goal was to detract from the company’s many problems and scandals, the results were mixed. Many people immediately jumped on the distraction theme, so Cambridge Analytica, government investigations and an attempt to overthrow Mark Zuckerberg as CEO were all dragged up again.
Rebranding as Protection Against Government Investigation
The more likely reasoning behind Facebook becoming FACEBOOK is protection against further government investigations. In particular, both the chief marketing officer and CEO made a point of noting that FACEBOOK has grown from a single app — Facebook — to a suite of apps and services.
Buzzfeed spoke to an unnamed source who says the Federal Trade Commission is what worries the company. The FTC fined FACEBOOK a record $5 billion in July over deceptive practices. Georgetown law professor and former FTC Bureau of Consumer Protection chair David Vladeck told Fortune that award served the dual purpose of punishing the company “…and to send signals to other actors in marketplace, which is, ‘Don’t be Facebook.’”
Does being FACEBOOK count as not being Facebook?
Avoiding further punishment is what Buzzfeed’s source says the re-branding was all about:
By more prominently disclosing its ownership of apps like Instagram and WhatsApp, Facebook intends to leave little question as to who owns its products, rather than risk letting the FTC find its labeling deceptive.
Whatever the reason, Facebook is now FACEBOOK. And FB stock is pretty much where it was before all the re-branding excitement.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
