Dot Coms? They're for Losers by Joanna Glasner
If 1999 was the Year of the Dot Com, 2000 might very well be the Year of the Not Com.
A lot of start-ups that stuck a trendy dot com at the end of their names to woo investors in last-year's Net-obsessed market are finding they may have hopped on the wrong bandwagon.
Now that shares of many highly hyped dot-com companies have taken a tumble, executives are reconsidering the all-important process of choosing a company name. As a result, many start-ups are opting not to use those once-ubiquitous i- and e- prefixes and -- gasp! -- even dropping the dot coms from their official names.
Part of the impetus appears to be coming from the investment banking community.
"Companies with a dot com in their name were told: 'There ain't no way your IPO is getting priced soon," said John Swenson, senior vice president at Morgen Walke Associates, a consulting firm that works with public and soon-to-be-public firms.
While it was quite the in thing last year for Swenson's prospective clients to sport a dot-com name, practically no one is doing so now. Having such a name is no longer seen as an easy way to boost stock price or draw attention from the investment community, he said.
Another reason is that, in the final analysis, a dot-com suffix is just a bunch of excess verbiage.
At least that was Stephen George's logic in moving to drop the dot-com suffix from Epylon.com, the online education and government-purchasing firm he co-founded in April 1999, back when Net companies were just about the hippest thing on earth.
"We don't really need the dot com. It's just extra," said George, who is in the process of changing the official corporate name to plain old Epylon, a name derived from Pylon, the ancient Greek word for "gateway." The e for "electronic" at the beginning gives the company name enough of a new economy edge, he said.
Of course, that rationale is a matter of opinion.
Neil Cohen, chief marketing officer for San Francisco start-up incubator Campsix, pretty much hates all the Internet-age prefixes and suffixes. His advice is to pick a name that's original and that stays relevant even if a company makes changes to its business model.
"I always tell people that they are building a business, not a website. So lose the e's, i's, and dots. Five years from now, names with these appendages will sound like dinosaurs," he said.
One of Cohen's biggest beefs is companies with names that consist of a generic noun with a dot com on the end, like drugstore.com or pets.com. A company like Pets.com will have a difficult time positioning itself as anything but a website, he said.
"Take away the dot com and what do you have? Pets," he said. "It's just so generic. It's hard to get an emotional feel for a word like pets, and just putting a dot com on the end of the word doesn't make it sound special."
Still, Cohen points out that there are other savvy people in the industry who disagree with his take on the whole naming issue.
Take for example Santa Monica, California-based eCompanies, another start-up incubator that paid $7.5 million late last year for the domain name business.com. It's using it to launch a company called -- you guessed it -- Business.com.
Or take another example: the online seller of technical books formerly known as Computer Literacy. In March 1999, the publicly traded company changed its name to Fatbrain.com and its stock market ticker symbol to (FATB) in a bid to draw more customers and raise its public profile.
The strategy seemed to work pretty well with investors until late last year, when Fatbrain.com shares started to slide and haven't recovered.
Aside from a few rare cases like Fatbrain, Swenson said it's unusual for a publicly traded company to change its name, either to drop or add a dot com. Generally speaking, it's much easier for a private company to ditch an unfashionable suffix.
"The day you go public is in many cases the first time anyone's heard of you, so they'd never know there was a name change," Swenson said.
Still, even Internet companies that have been in the public eye for a while don't have to refer themselves as dot com. EBay, Yahoo, and a host of other prominent Web companies don't use a dot-com appendage.
Others use the suffix only for early marketing. For example, Steve Peletz, CEO of construction contracting site RedLadder.com, sees the use of a dot-com suffix as a temporary stage in the evolution of the company.
"As contractors start to know us and it becomes a household name, we will drop the dot com because it's just cumbersome," he said.
In addition, there's the question of lasting relevance. With wireless commerce applications and squadrons of other emerging data technologies rapidly gaining ground, a company with a dot-com name runs the risk of looking outdated.
That's part of the rationale Epylon's George offers for keeping the "e" in the company name even as he's ditching the dot com. Although individual technologies may change, it's a virtual certainty that businesses will continue to be conducted electronically.
"My sense is that the 'e' will be around much longer," he said.