The best companies in the world invest huge amounts of money and energy into building name awareness. The right name can be worth tens of billions of dollars to a company, making it all the more important for companies to make the best choice.
Often, though, companies pick what seem on the surface to be ill-considered new names. Inspired by Thursday's announcement from Coinstar (NASDAQ:OUTR) to seek shareholder approval to change its name to Outerwall, here's a list of five company name changes that earned criticism and even outright mockery when they were first proposed.
In late 2001, the company then known as Philip Morris made a proposal to change its name to Altria. The origin of the name was founded in the Latin word "altus," meaning "high," and was meant to associate the company with peak performance. The "tri" embedded in the name also emphasized the fact that the company at the time had three distinct divisions: domestic tobacco, international tobacco, and its Kraft Foods (UNKNOWN:KRFT.DL) beverage and food division.
The name change reflected the company's wish to have consumers and investors see beyond its tobacco business, which at the time was plagued by more substantial legal battles with billions in potential liability hanging in the balance. Shareholders approved the name change in 2002. The irony, of course, is that Altria has since spun off both Kraft and its Philip Morris International (NYSE:PM) global tobacco divisions, leaving Altria holding the old core Philip Morris USA division.
Fortunately, this name change never actually took place, but for the short period that Netflix (NASDAQ:NFLX) considered it, Qwikster caused both an uproar among customers and a crisis of confidence for Netflix investors. The idea was to separate out Netflix's legacy DVD business from its faster-growing, higher-potential video streaming business and rename the DVD-delivery company Qwikster, with the streaming business keeping the Netflix name.
But coming on the heels of a bungled rate-increase announcement that sent costs up as much as 60% for users who wanted to keep both services, the proposed Qwikster name became closely affiliated with the misstep. The stock also plunged, losing half its value -- more than $100 per share -- in less than a month from the time of the rate increase to the time Netflix backed away from the proposal.
2012: Mondelez International
Kraft has been associated with two different name-change controversies. Last year, the company broke into two parts, with its North American grocery division keeping the legacy Kraft name while its global snack-food business changed its name to Mondelez International (NASDAQ:MDLZ). In explaining the change, the company said that Mondelez "is a newly coined word that evokes the idea of a world of 'delicious products.'"
The company helped come up with the idea by having an internal naming contest, in which more than 1,000 workers submitted ideas. Testing among groups of consumers didn't come up with any obvious negative associations, although some noted a similarity to a Russian word with undesirable associations.
Will Coinstar be No. 4?
Many investors have thought that Coinstar should change its name, but most expected Redbox to be the obvious choice for a new moniker, given the company's evolution beyond coin-counting to its DVD kiosks and its Redbox Instant streaming service. Coinstar CEO Scott Di Valerio said that Outerwall "unifies our growing portfolio of products and services under one name and reflects the company's ongoing commitment to think beyond the limits to make a better everyday possible for everyone." Whether shareholders end up agreeing at their annual meeting in June remains to be seen, but it's far from clear how the name reflects "future vision and limitless possibilities" -- and could end up leading to less brand-name awareness for the company.