| Turning a new leaf(Reuters)
Philadelphia/New York, Jan. 11 (Reuters): WorldCom by any other name may still be bankrupt, but the company that’s become synonymous with questionable accounting wants to dump its tarnished brand and will likely adopt the name of its MCI residential long-distance unit, sources said on Friday.
Faced with the daunting prospect of rejuvenating the WorldCom brand or the costly option of coining a new name, sources familiar with the situation said the easiest option is expanding the well-known MCI brand, which has been drilled into consumers’ minds by commercials featuring the likes of Michael Jordan.
“If I were them I’d definitely drop the WorldCom name — it’s associated with world-conquest gone wrong ... blubbering (former chief executive) Bernie Ebbers and shady practices,” said Mark DiMassimo, head of DiMassimo Brand Advertising.
WorldCom said no decision has been made on its name.
“It’s certainly something we’re considering, and it’s a process that we’re taking very seriously. There is going to be a lot of research and thought put into it. But at this point no decisions have been made,” said spokesman Brad Burns.
But analysts said a simple renaming is unlikely to erase memories of the Clinton, Mississippi company’s $ 9 billion accounting scandal or TV images of its former financial chief Scott Sullivan being led up courthouse steps for his indictment on seven counts of accounting fraud. He pleaded not guilty.
“There’s a natural tendency to think it couldn’t get worse, and that the damage to the WorldCom brand is over,” DiMassimo said. “But whatever they do, that new name is going to have to sail through some pretty turbulent waters.”
“The name ‘WorldCom’ has no credibility or viability in the financial market. But the brand is just a piece of an overall marketing puzzle. They have to retool the firm, it’s image, advertising and brand,” said Yankee Group analyst Berge Ayvazian.
Next week, WorldCom’s new chairman Michael Capellas is expected to outline for employees his priorities to help the firm emerge from bankruptcy. Capellas will sketch a broad strategic framework to be followed over the next several months with more specific details on job cuts and asset sales, sources said.
Telecom industry analyst Jeffrey Kagan expects WorldCom to start the restructuring and put to rest the financial problems before formally changing the name “so they don’t risk tarnishing the MCI name.”
There is some precedent to changing a name to wipe away bad memories: discount airline ValueJet changed its name to AirTran after its 1996 plane crash in Florida killed 110.
The MCI name — which in the 1960s stood for Microwave Communications Inc and referred to the spectrum towers that lined highways to serve truckers’ radios — may not mesh with the firm’s new strategy of catering to the data and internet needs of large corporations.