Most corporate naming experts say Google’s decision to reorganize its businesses under a new holding company called “Alphabet” is close to letter perfect.
Because it is part of Google’s corporate structure, Alphabet is not likely to become part of the lexicon like “Googling” did; it will mainly be used on Wall Street.
But the name Alphabet itself is simple and fits with Google’s reputation as being “user friendly and elementary,” says Tom Sepanski, naming and verbal identity director of branding firm Landor.
“Something about it is so fundamental,” adds Sagi Haviv, a partner at identity firm Chermayeff & Geismar & Haviv. “It’s a metaphor, just like any word can be created out of the alphabet, any concept can be realized.”
The move by Google highlights how important corporate names are. Google joins a long line of companies that have created quirky, confusing and sometimes hard-to-pronounce company names.
Creating a corporate name – or changing it – is a delicate balance. A good name must convey what the company stands for. It should be catchy, too.
But sometimes creative names backfire: When Kraft Foods spun off its snack food division and named it Mondelez in 2012, for instance, the reaction was not enthusiastic. The New York Post ran a headline that simply asked: “MONDEWHAAAT?”
Other times, boring names are met with criticism. When HP named its research division Agilent in 1999, some critics deemed it too lackluster.
Most naming experts agree that Google struck the right balance with Alphabet.
“We think about a name as a first word in a story but not the whole story,” said Nikolas Contis, global director of naming and branding firm Siegel+Gale. “In each case, it’s what’s the simple idea expressed through surprising language.”
Nikolas Contis, global director of naming and branding firm Siegel + Gale, said Alphabet ranks up there with Apple and Amazon and more recently, Uber. They infuse a simple word with key brand attributes.
Amazon’s name, for example, helped convey the company’s aggressive growth plans from an online bookseller into an e-commerce powerhouse that could expand into everything from drones to cloud services, Contis said.
“It was utterly simple and very strategic,” he said. More recently, the name of ride-sharing app Uber – which basically means a supreme version of something – helped people understand that the company was trying to reinvent the taxi business, Contis said.
“The best names explode conventions and create new references points,” he said.
Google is staying mum about how they came up with the name, but CEO Larry Page explained key reasoning in a blog post.
“We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search,” he wrote. “We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for.”
Because the word is a commonly used word, Google likely invested heavily in it, i.e. buying licenses or companies with relevant trademarks, said Landor’s Sepanski. Although some companies and brands can exist with the same name (think Dove soap and Dove chocolate), the simpler the name, the more likely that someone owns the trademark.
“It was probably a very expensive name,” he said. “Most real-world names are taken. It’s hard for me to believe they could register the trademark without a lot of money trading hands behind the scenes.”
In the end, the name works because it fits in with Google’s brand, said David Placek, founder of Lexicon Branding in Sausalito, California.
“Something as fun and simple 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 skepticism.”
Google says the new holding company will provide an umbrella for its separate divisions like Nest, which makes Internet-connected home appliances, and Calico, which is conducting cutting-edge health research, more independence. The segmentation of Google divisions under the Alphabet banner helps the name fit too.
“They probably did need a holding company to open things up, and show what they’re doing and where they’re spending money,” Placek said. “So they’re getting a positive reception based on that, and also people just like the name.”