Google Inc (NASDAQ:GOOGL)’s Alphabet, Real Business OR Just Change in Name

Corporate naming specialists say Google Inc (NASDAQ:GOOGL)’s decision to reorganise its businesses under a brand new holding company called “Alphabet” is close to letter perfect.

Because it’s part of Google’s corporate structure, Alphabet isn’t likely to become part of the lexicon like “Googling” did; it’ll mainly be used on Wall Street. But the name Alphabet itself is straightforward and fits with Google’s reputation as being “user friendly and basic,” says Tom Sepanski, naming and verbal identity director of branding firm Landor.

The move by Google Inc highlights how significant corporate names are. Google joins a long line of companies that have created quirky, confusing and occasionally hard -to-pronounce company names. Developing a corporate name – or altering it – is a fragile balance. A name that is good must communicate what the business stands for. It should be catchy, also.

But occasionally creative names backfire: When Kraft Foods named it Mondelez in the year 2012 and spun off its snack food division, for example, the reaction was unenthusiastic. Other times, mundane names are met with criticism. Some critics deemed it too lacklustre when its research division Agilent was named by HP in 1999.

Most naming specialists concur that Google Inc (NASDAQ:GOOGL) struck the correct balance with Alphabet. “In each case, it is what is the simple notion expressed through surprising language.” Nikolas Contis, global director of naming and branding company Siegel Gale, said Alphabet ranks up there with Amazon and Apple and more recently, Uber. They infuse an easy word with key brand attributes.

Amazon’s name, for instance, helped convey the business ‘s aggressive growth plans into an e-commerce power station which could expand into everything from drones to cloud services from an online bookseller, Contis said. “It was utterly easy and incredibly tactical,” he said. More recently, the name of ride-sharing program Uber – which basically means a supreme version of something – helped people understand the company was attempting to re invent the cab business, Contis said. “The finest names explode traditions and make new references points,” he said.

Google Inc (NASDAQ:GOOGL) probably invested heavily in it, ie companies or buying licences with relevant trademarks, said Landor’s Sepanski since the word is a commonly used word. While some companies and brands can exist with the exact same name (believe Dove soap and Dove chocolate), the simpler the name, the more likely that someone possesses the brand.

“It was probably a very pricey name,” he said. “Most real world names are chosen. It’s difficult for me to believe they could file the brand without a lot of money trading hands behind the scenes.” Finally, the name functions because it fits in with Google (GOOGL)’s brand, said David Placek, founder of Lexicon Branding in Sausalito, California.

“Something as fun and easy as alphabet works for them,” he said. “If Bank of America created a holding company called Alphabet, I think it would be met with good deal of scepticism.” Google says the brand new holding company will provide an umbrella for its different sections like Nest, which makes internet-connected home appliances, and Calico, which is conducting cutting edge health research, more independence. The name match is helped by the segmentation of Google divisions under the Alphabet banner ad too.

Google Inc (NASDAQ:GOOGL) belongs to Technology sector. Its net profit margin is 20.80% and weekly performance is 4.39%. On last trading day company shares ended up $690.30. Google Inc (NASDAQ:GOOGL) distance from 50-day simple moving average (SMA50) is 16.22%.

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