Donald Trump’s ageless advice for Mark Zuckerberg

The names of people, things—and businesses—shape how we perceive them. Every parent has had the experience of naming a baby and then exclaiming that the newborn suddenly “is” its new name. Likewise, a company that changes its name changes its image in everyone else’s eyes.

Facebook is far from the first company that has sought to revamp its image this way. History suggests, however, that a corporate re-christening can create a big problem: A new name, catchy and short, can come to embody everything people already disliked about a company but weren’t previously able to articulate.

Look what happened after Tribune Publishing Co. changed its name to tronc Inc. in 2016.

The company variously described its new name as a mashup of “Tribune Online Content” or as the British term for a restaurant-tip box in which money is pooled for later distribution. The idea seemed to be that tronc Inc. would pool the world’s news and parcel it out to consumers online.

Yet, while it called itself “the next media company,” tronc was jettisoning some of its best assets. The name made the company’s travails inescapable. Soon, comedian John Oliver was exclaiming that tronc “sounds like the noise an ejaculating elephant makes.”

Here’s a more serious example of a name change that closed minds instead of opening them.

In early 1987, UAL Inc., the parent of United Airlines, announced it would change its name to Allegis Corp. Seeking to expand its Hertz, Hilton and Westin units, the company wanted to signify that it wasn’t merely an airline, but also a car-rental and hotel-room provider.

Investors didn’t like that concept, which others had already unsuccessfully tried—and the name Allegis quickly came to epitomize the company’s unpopular strategy. The late-night television host Johnny Carson even mocked the name in one of his monologues.

One disgruntled shareholder was an opportunistic real-estate developer named Donald Trump, who had bought nearly 5% of the company’s stock. He said the name Allegis sounded like “the next world-class disease.” It made him “more militant as an investor and more willing to speak out against management, because I thought it was so wrong,” Mr. Trump said in June 1987. “And I think it had an important psychological role. It brought out even more anger at management and made a lot of people say they had finally had it.”

That’s because a name is easier to criticize than a strategy, says Margaret Wolfson, founder of River and Wolf LLC, a naming agency in New York. “To talk about a strategy takes a lot more time and analysis,” she says. “But names are handles: They’re easy to grab onto, and criticizing them can turn into a blood sport.”

When veteran airline executive Stephen Wolf came in as Allegis’ chief executive at the end of 1987, he was “indifferent to the name,” he told me this week, but focused on changing the strategy to shed the non-airline assets. In May 1988, shareholders voted to ditch Allegis and rename the company UAL Corp.—almost exactly the same as its previous identity.

To me, what’s most remarkable about this story is that Allegis doesn’t seem to be such a bad name after all.

Consider a giant staffing and business-services firm founded in 1983 and based in Hanover, Md. With approximately 20,000 employees and more than $12 billion in annual revenue, it ranked 22nd on Forbes’ 2020 list of largest private companies in the U.S.

Launched in 1983 as Aerotek Inc., the firm rebranded itself in 2001. Its new name? Allegis Group.

Plenty of people ridiculed Facebook for changing its name to Meta—joking that it’s short for “metastasizing,” or “I meta girl” who became an antivaxer, and so forth—but the risk isn’t that people won’t like the name. It’s that they’ll like it too well—as a pithy incarnation of everything they dislike about the company.

Mr. Zuckerberg has said that it’s “sort of a ridiculous thing” to suggest that the name change is meant to drown out negative publicity, such as The Wall Street Journal’s revelations earlier this year about Facebook’s marketing and other practices. Instead, the renaming demonstrates the company’s commitment to the metaverse, or the emerging digital world in which people can shop, socialize, work and play almost without limit.

Facebook’s appeal among younger users of its traditional services is fading, so the company is moving into the metaverse.

The Meta name imparts more urgency to that mission. As Mr. Zuckerberg wrote at the end of October, “I hope people around the world come to know the Meta brand and the future we stand for.”

What isn’t clear is how much time and energy everyone will want to commit to that future. Some consumers will love it. To others, it might sound like a dystopia of “living” on a video screen while eating cold pizza alone in a windowless basement, almost never seeing another human face-to-face.

The Latin saying “nomen est omen” can be loosely translated as “your name is your fate.” By renaming itself Meta, Facebook has identified itself inextricably with a metaverse future. In the eyes of the public, the business will become what it is named. That could end up making the company even more of a lightning rod for criticism than it already is.

In his regular Intelligent Investor column, Jason Zweig writes about trends in the investing world, portfolio strategy and financial decision-making. Sign up for his newsletter here.