Within moments of Facebook’s announcement that it’s renaming itself Meta, the world swiftly reacted. The Twittersphere sniped the loudest, pointing out that the new name won’t change any of the company’s problems: It’s still one of the most controversial companies and in the crosshairs of regulators all over the world.

So, is rebranding a mistake? Far from it. As branding experts, we think it’s a smart, strategic decision. Meta is a bold new brand, one with ambitions far broader than its current social-media properties. And it makes it the first company to stake a claim in the much-coveted metaverse, something so large and nebulous that even many tech people still can’t define it.

The name certainly has its strengths. It’s short, simple, and clearly grounded in the frame of reference the business intends to exist within — and redefine. With only a day of storytelling behind it, we’re curious if there’s more to the Meta-metaphor beyond the metaverse. Is it a wink to the alternate reality that’s created through all social media? Is it a self-depreciating nod to Facebook’s size and scale? Is it a reference to the expression of irony or self-parody of “that’s so meta?

It’s a branding direction that makes a great deal of sense for tech companies, especially in clarifying their story for investors. (And it’s not surprising that Facebook shares rose following the announcement.) Just as Alphabet made it possible for the company to grow beyond Google, this new name will pave the way for Meta to broaden its brand portfolio.

We expect that Facebook will still be Facebook to its users. So will Instagram, Messenger and WhatsApp. Each of those brands can–and should–have narrower definitions and fulfill every expectation users and customers have for them.

But other parts of the company will be rebranded. Oculus, its VR division, will become Meta.  And Facebook Portal, its smart display products, will become Meta Portal.

As Meta, the parent company becomes more expansive, and is well-positioned to move into the future. And the new name comes just days after the company announced it would invest $10 billion in developing the metaverse, moving in directions far beyond its social-media roots.

“In the metaverse, you’ll be able to do almost anything you can imagine— get together with friends and family, work, learn, play, shop, create,” CEO Mark Zuckerberg said in the announcement. That includes “completely new experiences that don’t really fit how we think about computers or phones today.”

Gutsy. And Risky.

While there’s a lot to be said for the strategic decision to rebrand, the move is also audacious in terms of timing. Typically, companies make monumental announcements like this when there is a shift in their business model, and they often feel celebratory. Not in this case. The decision to make this change when the company is so publicly under scrutiny is a telling choice.

Cynics may interpret the decision to introduce its new name now as evasive. But it can also be seen as an indication of how deep its commitment to growth and expansion is–even if it seems like the company is poking the regulatory bear.

It’s almost as if Meta is saying, “You think we should be smaller and spin off divisions? Nope. We’re planning on being bigger than you can imagine. ”

Facebook is betting that boldness will lead to bigger opportunities–but that also means bigger risks. If Meta raises the bar: What will it do next? Will the company be able to deliver on the new name? Can it live up to its ambition? And what are the repercussions if it can’t?

For additional insights on how to create successful brand portfolio and naming strategy, talk to our team today.