Company Outsider: Zomato's Eternal bet and the risks of a name change
Subscribe to enjoy similar stories. Company Outsider is a weekly newsletter by Sundeep Khanna. Ordinarily, a name change isn't a big deal. Just recently, one gentleman announced, through a notice in the newspapers, that henceforth, he would answer to James Bond and not to his earlier name, Giridhar.
Companies, too, are well within their rights to do the same. Get approval from the board and sundry regulators and you can choose to rename yourself whatever you please. It’s a fairly common occurrence in India as well as abroad.
In India, the BSE lists 2,500 companies that have changed their names over the years. In the US too, more than 30% of the firms listed on the various exchanges have changed their names at least once. Zomato’s decision to change the name of its parent entity to Eternal is, therefore, neither unusual nor unprecedented.
The company’s big boss Deepinder Goyal has linked the name to the changing paradigm of the company in terms of its future. It seems as a good enough reason, given that going forward it will be expanding into multiple businesses. The move is part of a clear trend of startups changing their names en route to adulthood.
What started as Backrub in 1996 became Google in 1997 and split into Alphabet in 2015. In July 2023, Elon Musk bought Twitter and proceeded to rechristen it X. The difference in the two renaming exercises is that Google continued as the name customers associate the company with, while users still struggle with saying “I Xed" instead of the more familiar “I tweeted".
Therein lies the danger for companies that go in for such a rechristening. Zomato has wisely chosen to retain the name of the brand that’s now synonymous with food delivery. But since Eternal will also be the
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