What’s in a .name? A huge boost in stock price, in the bubble days

By Toby Manhire In The Internaut

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15th August, 2014 1 comment

dotdollarcomSuch was the excitement around the advent of online consumption at the bubbly turn of the century, all you needed to do to boost your company was make it sound internetty.

That’s the evidence from a 2001 study conducted at Purdue University in Indiana, which “published a study of the fates of 95 companies that added ‘.com’, ‘.net’, or ‘Internet’ to their names during the bubble”, writes Joe Pinskeraug for the Atlantic.

“They found that, on average, the stock prices of these companies increased 74 percent over the period of time from five days before the name-change announcement to five days afterward.”

And though very much borne of the bubble, it wasn’t a blip.

“The gains resulting from a name change didn’t disappear over time. In other words, a company that changed its name, and nothing else, got a one-time, permanent increase in its stock price. Perhaps even more striking was the fact that this effect was spread across all the firms studied – even those that didn’t do business on the Internet.”

If only that remained the case today, and Telecom needn’t have rebranded as Spark. It could have just added a dot: Tele.com.

 

See also: The first social media election, just like all the others

Morozov’s reasons to hate Silicon Valley

The Zucks of tomorrow say Facebook will prevail

Morozov on the death of the cyberflâneur and the rise of the sharing fetish

Five-word TED talks – a selection

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One Response to “What’s in a .name? A huge boost in stock price, in the bubble days”

  1. NickR Aug 23 2014, 7:42pm

    Interesting thought. I wonder if this applies to political parties. Not that anyone would be stupid enough to use affixes like .com or Internet in the political arena.
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