Why Facebook Changing its Name is not a Big Deal

Roshan Srinivasan
3 min readOct 25, 2021

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If you have been reading the news recently, then you might have seen that Facebook is planning on rebranding as a metaverse company as part of an overall shift in its market strategy. (You can see the Business Insider article here if you don’t know what I’m talking about.) Now, it’s also important to note that this reframing of the company brand is timely given all the negative press about their recent outage that affected 3.5 billions users and the recent senate hearings with testimony from whistleblower Frances Haugen, who used to be a product manager on the civics misinformation team, about the company’s inability to combat fake news.

But fundamentally, the Facebook rebranding seems to be more about becoming a “metaverse company” as opposed to being reactive to negative press — something that company has experienced at every turn when it comes to their core platform. And given this business shift, should people really care about this rebrand? In my opinion, the answer to this question requires us to ask another two questions which I pose below.

Original image for Facebook’s “metaverse for meetings” was provided by Facebook.

Does the rebrand affect any of Facebook’s core products?

The answer is not really. Yes, Oculus is part of Facebook which builds consumer hardware for VR/AR, but nothing is fundamentally changing with the 10,000 employees working on these products. More importantly, the “Facebook” name will still be the name of core services including the main social networking app, Messenger, and Workplace. Instagram and Whatsapp seem to also not be affected directly by this rebrand.

So given that no core product is changing, is there an expectation for a significant change in user engagement or retention as part of growth? Not really if we use Alphabet owning Google as an analogy for the rebranded “Facebook company” owning the Facebook app among other things.

Ultimately, my opinion is that “financial gurus” in the media tend to react to superficial things about tech companies because they don’t understand the core mechanics of how products and features function. If more people spent time understanding products and what customers want, and less on branding and over-optimizing financial portfolios, then we would actually have better services that would likely generate more revenue and increase profit margins for businesses. And in this case, what Facebook is doing by making this announcement incredibly public is antithetical to that principle.

Will this rebranding open more doors for Facebook into other technology areas?

The doors were already there and the company could have chosen to open any of them at any time. Fundamentally, Facebook could have chosen at any point to focus on building metaverse-centric cloud infrastructure (ie. GPUs, DPUs, etc. like what Nvidia is going) or they could build or acquire other social networks or games building application layers for users to interact in a digital world. As I stated above, product should be prioritized over branding, so this feels completely unnecessary.

Conclusion

Does rebranding Facebook help disassociate from any bad press for a single product? Yes. Is it necessary to be a “metaverse company”? Absolutely not. Ultimately, Facebook is a large company and unfortunately, for many large tech companies, they tend to focus on optimizations of their monetization streams and growing business units rather than building new products and services that enter new business segments. From this perspective, using Facebook as an example, I think there definitely needs to be mindshift change in how companies evaluate the health of their business segments.

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