When Is Three Better Than Four? It's All in the Name

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Few things are more important to your company's image than what you name it. It says a lot about your vision, place in the market, and brand. It can also have a significant impact on your immediate and future success.

The new economy, with its emphasis on business at Internet speeds, has made company names more important than ever. We're all painfully aware of the "e" and "i" prefixes, "net" and "tel" suffixes, and rise and fall of the once-fashionable ".com." An even greater crisis is the dearth of available domain names -- which compels new businesses to thumb through the dictionaries of obscure languages (Akamai? Inktomi? Moai?).

No, enough has been said about these crises already. Instead, we're focusing on another, developing crisis involving names. The new economy has taken a turn: At first, companies proliferated; now, they're consolidating. A rash of mergers and acquisitions has led to unprecedented growth in the length of company names.

"I Just Don't Want to Do the Hyphen Thing."

The company name should reflect the identity of the business. But it's still just a company name -- not a family tree (or even worse, the employee directory). By accumulating names from each transaction, businesses appear incapable of making decisions. How many egos can reasonably fit in a boardroom before they have to be checked into overhead bins? These company names project a schizophrenic image and scream for unity and focus.

Examples such as Salomon Smith Barney and PricewaterhouseCoopers stretch the limits of linguistic tolerance. USWeb/CKS reached a critical mass of SCRABBLE^. pieces when it merged with Whittman-Hart; it wisely opted to start the name game over by adopting "marchFIRST." Meanwhile, all eyes are on the newly formed AOL Time Warner; it at least demonstrated wisdom and restraint by leaving off its respective "Netscape" and "Turner" monikers after its last round of acquisitions.

Still other companies are slower to catch on. Take Credit Suisse First Boston. Just rolls right off the tongue, doesn't it? Comparing this example with PricewaterhouseCoopers, you might note our first two theories concerning company name length:

1. Three is tolerable; four (or more) isn't.
   
   
2. It's not the number of names but the number of words in the name that counts.

We also have a corollary to the second theory: When using an acronym or abbreviation for a name, it's the number of letters that counts.

For example, Credit Suisse First Boston recently acquired Donaldson, Lufkin & Jenrette. In the process the online brokerage DLJdirect became CSFBdirect. Now just how direct is that? Who can honestly remember those four letters in the correct order? Was that "CSFB" or "CFSB"? At least with "DLJ" our prospects of getting it right were reasonably optimistic. Even most combination locks draw the line at three sets of digits.

This example also underscores one of our early rules about choosing domain names: If you think there's cause to worry that users will get it wrong (for example, if you have to spell it out in radio spots), they will get it wrong.

Three Is the Magic Number

So where's the scientific evidence to back up our theories? Unfortunately, we're a little short on that right now. However, we can offer plenty of anecdotal data that speaks for itself.

Take acronyms and abbreviations. It might seem ludicrous to think of the three-letter TLA as having a competitive edge over the five-letter FOMLA. However, evidence of success is squarely in favor of the TLAs:

• ISDN vs. DSL. It's no accident that DSL providers have avoided using the more accurate but longer terms ADSL, IDSL, and so on.
  
  
• USA vs. USSR (or CCCP). Don't believe anyone who tells you that the collapse of the Soviet Union had to do with politics and economics.
  
  
• USFL vs. NFL. The new XFL is showing that it at least learned from the USFL's mistake.
  
  
• KFC vs. IHOP. We'd all be eating pancakes for lunch and dinner if not for that extra "O."

And we're now witnessing the success of DVDs: Is it any wonder that the DIVX format fell flat on its face? Ever wonder why HDTV has been in development over 20 years but has yet to take off? Or why all the three-letter ".com" domain names are taken?

Coincidence? We think not!

So before you go off to acquire Bank of America, think about those lessons before tacking words, acronyms, and abbreviations onto the breadcrumb trail of your company name. Your shareholders just might thank you for it.