"We need a little while to contemplate that and think about it," Mr. Whitacre told analysts. "And we will have an answer to you quickly. But obviously, AT&T is a great name, a worldwide name... one of the premier brands in the world. And that's going to strongly factor into our decision."
AT&T has myriad business problems, and it's fair to ask whether it makes sense to buy a company in rapid decline in a market undergoing rapid change. But SBC is buying AT&T and needs to figure out a name. The AT&T brand has value and potential. AT&T was the No. 1 or No. 2 advertised U.S. brand in each of the past five years, getting nearly $5 billion of measured media ad spending. With the right management and products, AT&T again can be made relevant to consumers.
SBC is an uninspired regional name in the shadow of national brands: AT&T, Verizon, Sprint, Cingular. SBC delivers local phone service to 13 states; it's probably a non-entity to most people in the other 37 states. The name isn't even unique. SBC (sbc.com) offers calling; the Southern Baptist Convention (sbc.net) promotes a higher calling.
Mr. Whitacre, who's been with Southwestern Bell Corp. and predecessors since 1963, may myopically think SBC is golden. He could spend billions to make SBC universally known or create a new name, but neither makes any sense in a deal predicated on cost cutting. He could keep AT&T as a sub-brand, but maintaining multiple names could confuse and diffuse the brands-particularly since SBC already faces the challenge of operating alongside Cingular, its wireless venture with BellSouth.
Mr. Whitacre should nix the market research studies and focus groups. Think. Blink. Make the right call: AT&T.