Get started
Get the app

Join millions of investors on Stash

Investing, simplified

Start today with as little as $5
Get the app
Money News

Why Do Companies Change Their Names?

May 04, 2018

  • Cambridge Analytica filed for bankruptcy and is changing its name
  • Companies may change their names after negative publicity
  • Companies can also change names if their missions change, or to broaden their appeal


3 min read

It may be gone, but it won’t be forgotten anytime soon.

Cambridge Analytica, the data mining company that came under fire for collecting the names and personal information of an estimated 90 million Facebook users so it could compile voter profiles for the Trump presidential campaign, is shutting down.

The company announced its bankruptcy on Wednesday, in a press release.

But its executives and founders have reportedly launched a new business with another name that may do similar kinds of data collecting.

Members of Cambridge Analytica’s executive team have regrouped, and have launched another company, called Emerdata, which may pick up where Cambridge Analytica left off, according to reports.

Why is Cambridge Analytica changing its name?

The company has seen its name dragged through the headlines.

Companies that are the subject of negative publicity, usually for wrongdoing or some other misfortune, often change their names. Bad publicity can cause a company to lose business and even shut down.

Cambridge Analytica, based in Cambridge, England, began to unravel in March, when former employees leaked that the company had stolen personal information from millions of Facebook’s customers.

Cambridge Analytica cited a decrease in the number of customers as the reason for closing its doors. “Despite  Cambridge Analytica’s unwavering confidence that its employees have acted ethically and lawfully…the siege of media coverage has driven away virtually all of the company’s customers and suppliers,” the release said.

Why is a company’s name important?

A company’s name is a vital aspect of its brand. In fact, companies have something called goodwill associated with their names.

Goodwill is the actual monetary value that can be attached to the name, and that value comes from the company simply having customers willing to buy its products and services. Goodwill, however, is often “intangible,” which means it’s hard to assign a specific dollar amount to it.

When a company’s name is tarnished by wrongdoing or some other serious problem, it sometimes can’t recover, as customers abandon it. As a result, companies will sometimes change their names to get out from under a cloud of bad press, or association with previous wrongdoing.

What are other companies that have change their names?

Phillip Morris, formerly one of biggest manufacturers of cigarettes and tobacco products in the U.S., changed its name to Altria in 2002 following a class action suit against the cigarette industry. The suit left Phillip Morris and other tobacco manufacturers on the hook for nearly $250 billion of damages related to the harmful consequences of smoking.

A company’s name is a vital aspect of its brand.

Security firm Blackwater, renamed itself Xe Services, after some of its workers were convicted of killing Iraqi citizens in 2007. Coincidentally, its founder, Erik Prince, is a board member of Esemerdata, according to reports.

Similarly Andersen Consulting became Accenture, in part to distance itself from its association with the Enron scandal. The company’s tax division had audited Enron’s books, even as Enron hid billions of dollars of debt related to bad deals from its investors, which led to Enron’s collapse in 2001. Enron was one of the leading energy producers in the U.S. at the time of its failure.

Is a name change a good or bad thing?

But it’s not always scandal that leads to a name change.

Google became Alphabet in 2015, to signal to the market that the company is about more than its signature search engine product. Alphabet is a holding company that includes Google, but also an advertising business, Youtube, and the Android operating system, among other business lines.

Similarly, Kentucky Fried Chicken became KFC in 1991 as diners became more health conscious, to downplay the “fried” in its name, according to reports. It may also have changed the name to avoid new licensing fees surrounding use of the word “Kentucky” in its brand name.

And here’s a name change that probably needs no explanation: Jerry and David’s Guide to the World Wide Web became Yahoo! in 1995.

Interesting fact: Yahoo! is an acronym for Yet Another Hierarchical Officious Oracle. At least, according to Yahoo.


By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

Next for you
Why Is Facebook In Trouble Over 2016 Election Data?

Investment Profile

Legal Cannabis Industry

Get all the details on investing in marijuana and the cannabis industry legally.

Learn more
Explore more articlesChoose a topic to learn more about
pop culture politics social media Technology Careers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.