Reaching Public Policy Audiences: Choosing the Right Words & Platforms

November 24, 2010

by Danny Selnick, Vice President, Public Policy Services, Business Wire DC

BW VP of Public Policy Services Danny Selnick

November’s mid-term elections are over and voters and pundits can talk ad infinitum about who’s in, who’s out, and why — and even what challenges President Obama and his administration face because of the shift in power in the House and a narrowing of the margin for Democrats in the Senate.

We’re sure to see Republicans (and Tea-Party members) try to overturn sections of the recently passed Healthcare Reform Bill.  There’s also talk of repealing recently passed financial and oil industry regulations.  Then there’s the issue of keeping or repealing the “Bush Era Tax Cuts,” the need to balance the federal budget, and free trade — all against the backdrop of creating jobs and getting the economy working again.  Still on the long list of agenda items for Congress and the Administration are education and energy reform.  One thing’s for sure: there will be no shortage of important issues coming up over the next two years.

With “divided government” the new reality in Washington, organizations need to develop a coherent communications strategy to begin building support for “what’s near and dear to them” in advance of when their issue comes up for discussion.  In some cases (like the expected attempt to dismantle parts of the Healthcare Reform Bill) an issue may be “push-started or stalled” at the state level.  Communicators must get their message out not just to media, but also to decision-makers — and perhaps even more importantly, to the voting public directly in order to engage and mobilize support at a grassroots level.  That’s especially true because, as shown in this last three election cycles, the court of public opinion (and voting behavior) is highly fluid.

Public affairs communicators are faced with a variety of challenges as to how they can effectively get their news into the hands of all their intended audiences.  Engaging online audiences, from journalists to activists, helps boost visibility and credibility.  But, first you have to learn and analyze the most popular terms and keywords used to frame issues in media coverage, social media conversations and online searches.  This information can help guide you in writing press releases and other online communications that improves search engine optimization (SEO).

For example, there aren’t universally agreed upon terms to define many of our nation’s debates (one person’s Obamacare is another person’s landmark healthcare legislation), so knowing and researching those terms and their weighted influence on audiences is critical to communications outreach — affecting how your news is seen and viewed and by whom.  A number of free keyword analysis tools are available, and Business Wire experts have written a number of blog posts that detail SEO tips for press releases.

Once you’ve crafted a well-written press release with relevant keywords (and modified landing pages with matching terms), it’s crucial to get your news widely disseminated by an authoritative source to relevant media, influencers, websites and search engines in addition to the individual outreach to your personal contacts.  That’s where we come in.  Business Wire provides a multi-platform approach to news distribution that goes beyond simply emailing and posting news to your website.  While email is just one distribution tool used by communicators, it is limited in reach to contacts on a particular list … and its accuracy is dependent upon any last updates. The newswire, is designed to reach “desks” of reporters and editors, decision-makers at the federal and/or state level with direct feeds, and to give unparalleled online visibility with advanced SEO capabilities and full-text posting to thousands of news and information web sites and systems.  Plus, Business Wire content is a trusted, authoritative news source by Google and other search engines, as well as major news organizations.

Proper use of keywords in a well-written, engaging press release, issued via Business Wire’s Public Policy Wire is among the most effective ways to reach directly key audiences, while engaging the public in your conversation.


Web Spiders: Enough to Make Investors’ Skin Crawl

November 23, 2010

by Neil Hershberg, Senior Vice President, Global Media

Neil Hershberg

Neil Hershberg, SVP - Global Media

Forget about bedbugs. The real threat to anyone involved in the financial markets these days is spiders – and I’m not talking about the eight-legged variety.

Spiders — sophisticated web-crawling software – are seemingly rampant on Wall Street, wreaking havoc in the financial markets, and yielding big profits for select investors in the know.

There were several incidents recently in which earnings results were leaked to the market in advance of their scheduled release. The predictable result: widespread investor confusion.

Shares of NetApp Inc., one of the affected companies, sank sharply in the subsequent market volatility, leading to a nearly one-hour trading halt.

The use of these advanced search bots is certainly nothing new; what has become apparent is their disruptive impact on fair and orderly capital markets. More ominously, the growing use of these bots threaten to make a mockery of the principle of fair disclosure.

The problem is not uncommon. Ironically, Jeff Morgan, president and CEO of the National Investor Relations Institute, issued a warning to NIRI members about a week ago:

“I recently spoke with a member who told me about a situation where a news organization ran a story on their earnings 45 minutes before the earnings announcement was scheduled for release. The company released their earnings immediately and began an investigation. The company found that the news entity breached an unpublished area of the company’s online newsroom and accessed the confidential draft earnings release by using sophisticated, proprietary web crawlers. The company routinely used this private website area to post and format draft earnings releases prior to publication. Their plan was to do as they had done for many prior quarters and open access to the release once it became public. Unfortunately, the unpublished release was discovered overnight by the media outlet’s proprietary web crawlers. For IR professionals the lesson learned is to be sure your documents are secure on the web wherever they reside. And a word to the wise – the member noted that the news organization pointed out that this type of discovery has happened before.”  [IR Weekly, November 9, 2010 issue]

The major market-moving news services have long relied on spidering technology to ferret out news that hasn’t been disclosed via conventional channels. What has largely remained under the radar is how the wizards of Wall Street are similarly taking advantage of state-of-the-art software to identify hidden trading opportunities. It is a safe bet to assume that the financial news wires aren’t the only ones routinely trolling the Internet in search of actionable information.

While spiders are a major concern, issuers must also deal with another silent but potent threat: Their own lack of imagination in naming their important  news and data files. Due to habit or inertia, many issuers sequentially name their financial files, or use other intuitive names for identification purposes. This scenario potentially allows a skillful web spy to decipher the URL of material information waiting to be released to the market place.

As if all this depressing disclosure news isn’t disturbing enough, there was also the recent revelation that Google might be stacking the deck in favor of  its own properties. According to Harvard Business School assistant professor Ben Edelman, Google’s search results aren’t as objective and unbiased as the search giant has led us to believe. Edelman’s study concludes that “Google has made inaccurate representations to the public including to users, publishers, advertisers, investors and regulators.”  Based on his findings, Google may not be the unbiased arbiter of information exchange that it has successfully portrayed itself to be.

Clearly, “self-publishing” is more complex – and has more associated risks with dire market consequences – than may seem obvious. The costs and complexities of the required security upgrades are likely to far outweigh any perceived cost-savings. And the potential loss in market valuation and credibility in the event things go awry is by far the largest financial liability of all.

So what is the simplest, most effective way to navigate this obstacle course?  More importantly, what is the best way to maximize the reach of your message so that the market is fully informed? Hopefully, it should be obvious that posting the news on your web site won’t get the job done, and also is fraught with hidden dangers and unintended consequences.

A broadly-disseminated news release issued via Business Wire remains the surest way to ensure full and fair disclosure. All market participants have simultaneous, real-time access to price-sensitive information.

We have invested tens of millions of dollars in building the industry’s most advanced and secure systems for processing and distributing news. We are vigilant about security to the point of paranoia: Our databases, workflow systems, and public facing web sites are secured from spiders or anyone trying to gain unauthorized access to clients’ pre-released financial information.

And it isn’t just us saying it – Business Wire is audited annually in multiple jurisdictions where we are sanctioned to operate as a regulatory disclosure service. Additionally, as a proud member of Berkshire Hathaway, we answer to a higher authority and undergo a separate corporate security audit. These rigorous reviews, conducted by the world’s leading independent auditing/management consulting firms, certify that our network systems and operational procedures meet the most demanding global standards.

In a risk/reward analysis, web disclosure simply doesn’t make sense for issuers, and is a major disservice to investors.


Capitol Communicator’s Meet the New Media Event Recap

November 22, 2010

By: Cecile Oreste, Media Relations Specialist, Business Wire/DC

On Tuesday, November 16th, public relations professionals and other members of the communications industry gathered at B. Smith’s in Washington, DC for Capitol Communicator’s “Meet the New Media” event. The media panel, moderated by Mopwater PR founder Amanda Miller Littlejohn, included:

Several attendees were live tweeting the event. To follow the discussion and to add to the conversation, look for tweets with the hashtag #NewMediaDC in Twitter Search.

After providing a brief overview of their respective media outlets, each panelist contributed their thoughts on a variety of topics: social media and journalism, do’s and don’ts of pitching and the impact of mobile devices among others. The main takeaways from the discussion were the importance of building relationships with reporters and knowing the publication you’re pitching.

In regards to relationship building, Jennifer Nycz-Conner of the Washington Business Journal said she has developed professional relationships through Twitter. At times, it’s actually faster to reach her through Twitter rather than traditional forms of communication like e-mail or phone. She also joked that the newsroom has officially started the tally of news releases starting with “It’s that time of year again.” She suggested finding a different lead unless you want to be grouped with the others.

Michael Schaffer of Washington City Paper said that we date ourselves by asking how journalists use social media in their news gathering. He added that reporters will more than likely take advantage of these tools unless they’re not curious at all. When it comes to pitching the Washington City Paper, he suggests reaching out to individual journalists rather than going straight for the editor. “It’s a better percentage game working the reporters,” he said.

According to Erik Wemple of TBD, the media outlet was founded on social media responsiveness. Mandy Jenkins, the site’s Social Media Producer, not only engages the community through Facebook and Twitter, but also monitors these social media networks looking for trends and news tips. Wemple recommends starting your e-mail pitch with a reference to a story the journalist has written. This shows you read the publication and have some knowledge of what the reporter writes about.

Dion Haynes of Capital Business echoed Wemple’s point noting that a reference to one of his stories in a recent pitch caught his attention. For Haynes, it’s not only important to get to know the publication, but also to learn about the person you are pitching. Journalists are people too. They have their own personal lives and interests, he said.

Edwin Warfield of Citybizlist talked about the reciprocal relationship between public relations and journalism. According to Warfield, Citybizlist will take any news release that is local, literate and about business. Gathering information from a multitude of sources is important to carry out Citybizlist’s mission of delivering breaking local news.

Capitol Communicator serves as a resource to the communications community of the Mid-Atlantic region. In addition to providing industry news, Capitol Communicator provides professional development opportunities and educational events. For more information about Capitol Communicator, please visit www.capitolcommunicator.com.


Newport Area Communicators and Media Talk Industry Trends, Pitching Tips

November 19, 2010

by Amy Yen, Marketing Specialist, Business Wire LA

Last week, Business Wire Newport Beach held a media breakfast for more than 70 Orange County area communicators and PR professionals to discuss trends in the media industry and tips for reaching out to Newport area media.

>>Download a full audio recording of this event here.

The panel of Orange County/Inland Empire media members included (left to right, pictured with Business Wire Newport Regional Sales Manager Tasha Huang, far right):

Here are some of the insights provided by the panelists:

Gillian Flaccus, The Associated Press:

  • On trends in the news industry: Social media, interactive and mobile remain on the rise. The AP is active on all three of these fronts. They’ve trained their reporters to get video and also supply footage to broadcast media. Multimedia is very important to them, and while they often have their own photographers in the field, photos with press releases are especially important if they are images the reporters cannot easily get themselves.
  • Mobile has revolutionized the news industry. The AP has been extremely aggressive about adapting to mobile. AP Mobile is a very popular news app for BlackBerry and iPhone.
  • The AP is on Facebook and Twitter and has also been experimenting with blogging. Many of their beat reporters have their own Twitter accounts and that is one way to find them.
  • When pitching to the AP in Southern California, your best bet is usually to send it to the Los Angeles bureau, as the Orange County bureau is very small. Their reporters share information all the time with each other, so if it’s relevant to a specific region, it will be passed along to them.

Lisa Liddane, Coast Magazine & OrangeCounty.com:

  • Reporting is starting to be very personality-driven. The lines in objective reporting are blurring as trends like blogging become more popular.
  • The best way to reach Coast Magazine is email. Be very clear in your subject line. It’s very helpful to you to find a local angle and include it in your pitch.
  • Know who you are pitching to and what their publication schedule is. For example, a print magazine versus daily newspaper or broadcast news.
  • Print publications like Coast Magazine need high res photos at 300 DPI. If you don’t have a high res picture, sometimes they can still use a lower resolution one for online.

Jerry Sullivan, Orange County Business Journal:

  • Do the research to find the right reporter to target. For the OCBJ (and many publications), you can find reporters by the beat they cover on the publication website.
  • Look for trends or a local angel to incorporate your company or news into. For example, the OCBJ is interested in stories about media companies buying smaller companies, or stories involving local executives.
  • Press releases can lead to media coverage in roundabout ways. They might just call attention to your company and cause a reporter to look into them when they otherwise wouldn’t have thought to.
  • When including photos with your release, identify the people in the photo left to right whenever possible.

For more upcoming local Business Wire events or to see what’s coming up in our award-winning webinar series, visit http://www.businesswire.com/portal/site/home/business-wire-events.

Follow Business Wire events on Twitter! Hash tag #bwevents


Disclosure: The Dawning of the Age of Precarious – Let the Sunshine Back In

November 18, 2010

by Cathy Baron Tamraz, Chairman and Chief Executive Officer, Business Wire

Once upon a time, in the Year 2000, a wonderful law was passed that protected the interests of all investors in our great land. You may have heard of it; it was called Regulation Fair Disclosure.  Thanks to the great mind of Arthur Levitt, the “whisper” and good ol’ boy network that had gone on for far too long on Wall Street by those in the know, was finally curtailed.  Good triumphed over evil on October 23, 2000 – and all of our citizens were protected.

Reg FD served to shine a bright light on material information, so that now everyone had equal access to all news that could impact a stock price.  It was a great day for the retail investor, and all was well in our land. The new words of the day were “full and fair for all.”   Transparency and simultaneity were now the gold standards and endorsed and enforced by our nation’s regulators.

To assist in ensuring that all companies now played by these new rules, “neutral” services like Business Wire were touted and recommended as best practice and “valuable” newswires for the purpose of making news ubiquitous and available to all. This made sense because it confirmed the vital role they have played for 50 years in helping to keep “law and order” on the Street. Further, our nation’s regulators relied on Business Wire’s audit trail to help keep our markets honest. Business Wire’s proprietary news delivery platform ensured simultaneous, real-time access to all investors.

Regulation FD flourished, and all was well.

But alas, in August 2008, a seemingly insignificant event led to some unintended consequences – a dark cloud now hovered over full and fair disclosure.

 

Image by Flickr user r8r

 

In an attempt to embrace new technology and encourage more disclosures, not fewer, an interpretation (not a rule change) was added to Reg FD that encouraged the use of company websites as an enhancement.  This certainly made sense because it provided an added venue for material news, thus widening access. Our regulators wanted to appear current and relevant – and that made sense.  All seemed fine in our great land . . . the more, the merrier. Or so it seemed.

But then something strange happened . . . self-anointed experts promoting their own commercial agenda decided that restricting the information flow by limiting it to a company website ONLY, was now good enough.

Let the people figure out when and where the information is available. Let the reporters, analysts and investors troll through thousands of websites to find and report on the information. Let the algo traders, who have the most sophisticated systems, get a jump on the news and perhaps beat out everyone else. In effect, let the retail investor eat cake.

Even worse, questions around system crashes, redundancy, security and simultaneity were not even addressed, because those who were now playing in this arena had no idea of its complexity – and had not even thought it through.  What about those vital security audit trails?  What about protection from insider trading allegations with standalone web disclosure?  What about server crashes? What about redundancy and simultaneity?

Alas, darkness was falling . . . and the proof was in the proverbial pudding. In the few instances where this “standalone methodology” was followed, the truth revealed itself. Confusion now reigned, as investors scrambled to get the news.

THE MORAL OF THE STORY:

Reg FD’s level playing field is in danger of going “POOF”, turning a prince back into a frog.  However, this parable can still have a happy ending.  We can’t let the Holy Grail of full and fair disclosure slip away. The SEC did not intend it to be that way – just read the SEC’s CIFiR report, citizens.

This much we know: Reg FD was meant to protect all investors – and retail investors, in particular, dread a return to the dark days (and Wall Street whisper) of disclosure. Therefore, we ask our nation’s protectors to slay this dragon, to clarify both the spirit and intent of the Interpretive Guidance, and to let the sun continue to shine on our financial markets.


Editor’s Corner – November Edition

November 16, 2010

With 31 bureaus around the world and more newsrooms than all of our competitors combined, Business Wire is proud to provide local expertise and superior service, backed by the most accurate editors in the world. In Editor’s Corner, we ask some of our best to chime in on how to get the most out of your press release, based on their years of experience in the industry.

A Tip from Business Wire: Own Your Headline!

by Christina Jahnke, Editor, Business Wire/Chicago

Think your release will stand out in a crowd? If you don’t own your headline, think again! Hundreds of headlines scroll across the Business Wire website (and the multitude of feeds we reach) on a daily basis. How is it possible to draw crowds to you, when the only tools you have are words? It’s simple, really: Choose words wisely.

Having run the Chicago Marathon over Columbus Day weekend, I was entertained and inspired by the many spectator signs on course. Unfortunately, there were so many signs and only a passing moment to read them. The slogans that took hold were clear, witty and, most importantly, could be read inside three seconds. Anything longer and I missed the punch line en route to the next aid station. This is a great analogy for those scrolling feeds. Eyes are moving fast over those headlines. If you don’t stand out, you may be passed over. Take a tip to own your headline!

Here are three to consider:

1.  Include your organization’s name.
Ownership implies a name, and that is perhaps the most important element. Don’t assume the public knows who you are, no matter how big you are. These press releases are the story of your organization on the Web. Give your company the recognition it deserves! Additionally, those who search by your company’s name will have a way to find your release on the Internet.

2.  Be concise.
The three-second rule fits perfectly. Be brief in summarizing the content of your press release. Longer headlines are less likely to be picked up by search engines. Be concise. Less is more.

3.  Stay on point.
You have something important to say. While it’s good to be concise, don’t let the effort to be succinct overshadow the message. Read and re-read your headline. Are you staying on point or trying to fit too much in too small a space?

The headline is the first appearance of your message to the world. Own it, and help your release go the distance!

-Christina Jahnke, Editor, Business Wire Chicago


When is Disclosure not Disclosure?

November 10, 2010

by Gregg A. Castano, President, Business Wire

Gregg Castano, President, Business Wire

 

Forget about level playing fields, Regulation FD, interpretive guidance and recognized disclosure channels. What about good, old-fashioned EFFECTIVENESS?

Have we entered a bizarro world in which simultaneously making material information available to millions of investors via every conceivable communications method known to modern man has somehow become LESS effective than posting that same information to one, lonely site on the Internet and hoping that whomever wants access to it will come a lookin’?

If that’s the case, then the sky isn’t really blue, death and taxes aren’t sure things and 15 minutes can’t save you 15% on your car insurance.

Why would it be considered MORE effective, or even sane for that matter, to force every investor, private or professional, to have to frantically hop from web site to web site to web site ad infinitum on any given earnings reporting day to gain access to news that is already fully aggregated and uniformly available in real-time to them at no charge in any number ways, including the mobile phones in their pockets?

Is this some kind of plot against investors by corporate mad scientists, or maybe a sick prank being played upon the investment public by the angry and vengeful ghost of Kenneth Lay? Did Foolish suddenly become the New Wise?

Why wouldn’t the SEC, an organization that should be leaping at every opportunity to undo the damage to its credibility caused under previous Chairman Rufus T. Firefly . . . I mean Christopher Cox, step in and put an end to this electronic game of “Where’s Waldo?”.

Questions, questions. The answers to which seem simple enough that my seven year old twins can easily grasp them. But I guess the obvious has turned into the obscure and the direct into the circuitous. The only thing left for me to do is go home and tell my twins that Daddy was wrong; two plus two actually equals five.


Online News Association 2010 Conference Recap

November 8, 2010

By: Cecile Oreste, Media Relations Specialist, Business Wire/DC

Business Wire Media Relations Specialist Cecile Oreste was among the 1,200 media professionals in attendance at the Online News Association (ONA) 2010 Conference in Washington, DC. Online journalists, educators and students from around the country came to the Renaissance Washington, DC Downtown Hotel Thursday, October 28th through Saturday, October 30th to learn from leaders in the industry, including AOL and NPR among others.

The four day conference started on Thursday with a variety of hands-on workshops including photography, video and audio field trips that shared best practices and techniques. ONA also organized a career summit and job fair featuring recruiters from American Public Media, Associated Press, Bloomberg Government, Gannett and Mashable. Yahoo! News sponsored the opening night reception at The Donald W. Reynolds Center for American Art and Portraiture, where attendees took in some local culture in between appetizers and drinks.

TBD, Washington’s hyperlocal news source, started off Friday morning with their keynote session, “Starting from Scratch.” Laura McGann, Assistant Editor at the Nieman Journalism Lab, moderated the discussion between General Manager Jim Brady, Social Media Producer Mandy Jenkins, Director of Community Engagement Steve Buttry and TBD Editor Erik Wemple. During the keynote event, McGann questioned Wemple’s decision to devote prime real estate to TBD.com’s feature “The List.” Wemple’s response generated several tweets and also lots of laughs. He suggested that if you don’t have something terrible on your site, then you’re not trying hard enough. You have to fail many times before you get it right, he said.

Saturday’s sessions began with a keynote discussion about Wikileaks and also featured a lunch with Knight News Challenge winners. Other Saturday sessions included “Turning Bits into Bucks,” which discussed entrepreneurial journalism; and “Ten Tech Trends in ’10″ with Amy Webb, CEO of Webbmedia Group, an international digital media consulting firm that advises companies on emerging technology. In addition, Webb is on the Board of Directors for ONA and will serve as Chair of the association’s new Advisory Board.

Some of the trends Webb discussed during her session included the 2011 tablets coming to market and mobile image scanning (QR codes). According to Webb, these two topics, along with open source technology and design, were major themes throughout the conference. “Lots of journalists are eager to use web tools to enhance the work they do, and there were many opportunities this year to learn all about the latest offerings,” she said.

Tanja Aitamurto, Innovation Journalism Fellow at Stanford and blogger for The Huffington Post, said the conference provided insight on new production and business models in journalism, and also introduced the idea of journalism as only one of many products media organizations offer. She brought up a positive message presented by Evan Smith of the Texas Tribune during the “Fund My Media 2.0″ session on Thursday. According to Smith, there is still need for high-quality journalism; and where there is demand, there will be ways to produce and fund it. Aitamurto also added that in order for journalism to succeed in the future, “innovation, open mindedness and experiments are very much needed.”

The conference concluded Saturday night with the Online Journalism Awards Banquet. Hari Sreenivasan of PBS NewsHour brought the laughs as the master of ceremonies while MSNBC.com, NPR, ProPublica and CNN.com took home top honors.

Overall, the conference was a great opportunity to learn from and network with online journalism professionals. It also maintained a positive outlook on the future of journalism during a time when news organizations face a number of challenges. For more information about the Online News Association, please visit their website at www.journalists.org.


Consider Daylight Savings Time When Sending Press Releases This Weekend

November 5, 2010
Most areas of the United States are “falling back” an hour at 2 a.m. local time on Sunday, November 7.   Please make note should you be distributing  news releases this weekend.
 
Here’s a great reference to see which geographic locations change when.  For those sending press releases to Business Wire this weekend, no worries.   The time zones in our Business Wire interface update automatically to reflect relevant changes on Sunday.
 
Also keep in mind that daylight savings time has already ended in Europe.   As of Sunday London will once again be five hours ahead of eastern standard time and Paris will be six hours ahead.
Enjoy your 25-hour day!
 
 

Microsoft Needs To Get its Head Out of the Cloud When it Comes to Disclosure

November 3, 2010

by Cathy Baron Tamraz, Chairman & Chief Executive Officer, Business Wire

Cathy Baron Tamraz

BW Chairman & CEO Cathy Baron Tamraz

Records are meant to be broken. Rules, on the other hand, aren’t.

And when those rules have a direct impact on both the fairness and workings of our financial markets, then an even higher standard of accountability is in order.

Unfortunately, it is becoming apparent that Regulation Fair Disclosure — which the SEC originally conceived to provide ALL investors with a level playing field — is something of a misnomer. “Request Fair Disclosure” or “Regulation Flex Disclosure” would seem to be more appropriate rubrics, as issuers who fail to meet Reg FD’s compliance standards continue to go unchallenged.

This troubling situation raises the obvious question: If rules aren’t enforced, then what is the purpose of having them in the first place?

The latest disclosure debacle involves Microsoft, which abruptly notified the market of its shift to a web-disclosure model. The company posted its earnings online, without benefit of a corresponding broadly disseminated release.

Microsoft’s ill-fated foray into web-based disclosure provides a textbook example of “worst practices” investor relations.

The company issued an advisory on October 27, 2010, alerting the marketplace that it would post its earnings on its website the next day. No time was specified as to when the results would be posted.

Microsoft’s disclosure strategy is problematic on many substantive levels. The SEC’s 2008 Interpretive Guidance Release states that companies can disclose material information on their web sites provided certain criteria are satisfied; a key requirement is that the corporate website is a “recognized disclosure channel.”  This standard suggests that the issuer must be able to demonstrate that its website is a primary “go-to” site for investor information, over a sustained period of time.

Given the fact that Microsoft literally made the transition to web disclosure overnight, it makes a sham of one of the SEC’s few tangible web-disclosure guidelines. Unfortunately, there aren’t all that many requirements to begin with, which is the crux of the problem.

Clearly, Microsoft has one of the most heavily trafficked sites on the Internet. However, there isn’t necessarily a correlation between a popular consumer site, and a “recognized disclosure channel.”  By my way of thinking, “recognized” suggests a documented and defensible track record over an extended time frame.

Microsoft’s arbitrary disclosure designation has short-circuited the SEC’s intent, giving the clause new meaning. The unwelcome result: Instant disclosure channel. The SEC’s Interpretive Guidance Release, already condemned by its critics for its lack of clarity, has effectively been watered down further by Microsoft’s unanswered actions.

Philosophical arguments aside, Microsoft’s disclosure process was  badly bungled.

Here’s a chronology of the confusion (all times Eastern):

  • Investors were frantically scrambling to get the results at market close; the results weren’t posted until 4:15 pm. That’s 15 minutes of high anxiety, angst and frustration as investors pounded the Microsoft site seeking the company’s results.
  • The 8-K wasn’t filed until 4:28:49 p.m.
  • The advisory press release finally moved almost a half-hour after the posting [4:44 p.m.], thus the Notice came AFTER the Access.
  • The conference call was held at 5:30 p.m.

Without question, it was a disclosure disaster.

As noted, the 8-K was filed 13 minutes after the posting on Microsoft’s website. Our interpretation of Reg FD is that the filing should have preceded, or been filed simultaneously, with the web posting.

In a Dow Jones interview published in The Wall Street Journal, a Microsoft IR team member revealed a basic lack of understanding of what services are available today, as well as a blatant disregard for investor relations’ core mission.

The Microsoft spokesperson asserted that posting onto the company’s website allowed users to “see additional information that they wouldn’t see if they only looked at our press release.”

Definitely not true. Releases today are transmitted in XHTML format, which provides for increased online functionality and flexibility. Business Wire, for example, has all of the rich multimedia capabilities that Microsoft was seeking to accomplish on its own site; e.g., slides detailing the company’s performance, key operating metrics, and links to webcasts and other documents.

The major difference, however, is that Business Wire makes this information available to the entire investment community simultaneously, and in real-time. Business Wire’s patented news delivery platform distributes and posts to the world’s leading portals, financial information platforms, and databases, creating a true level playing field for all market participants. We literally push the information to millions of eyeballs around the globe,  and everyone receives it AT THE SAME TIME.  Yes, it’s ubiquitous.

In rationalizing the company’s decision, the Microsoft executive focused on the benefit of a reduced staff workload, concluding “it’s one less check mark.”

The critical lesson that has been lost here is that when it comes to investor relations, it’s not about the issuer, it’s about the shareholders. It’s unfortunate and inexcusable that the legitimate  information needs of the marketplace are deliberately being sacrificed simply because they require an extra “check mark.”  It’s a small price to pay, in our view, for market fairness.

Web disclosure clearly has major drawbacks; its obvious deficiencies disadvantage investors in multiple ways. Seasoned market observers shudder when imagining the ensuing anarchy if hundreds, or thousands, of issuers choose to follow Microsoft’s misguided example.

At a time when there continues to be a growing global demand for increased transparency and disclosure, Reg FD —  the backbone of America’s disclosure system — is unfortunately being emasculated because of benign neglect and gross misinterpretation. The SEC needs to take decisive action reaffirming the basic tenets of Reg FD; otherwise, the concept of full and fair disclosure will prove to be more of an empty premise rather than an enduring, guiding principle that has proudly come to define our capital markets.

The facts speak for themselves: The SEC should take appropriate action to reverse these disturbing disclosure trends. The evidence supporting such a move is overwhelming.

Authoritative academic research conducted by a professor at the Harvard Business School has conclusively demonstrated that greater news dissemination improves stock liquidity and lowers volatility, while enhancing a firm’s visibility. It can even lower the cost of capital.

Independent surveys confirm that an overwhelming majority of securities attorneys continue to counsel corporate clients to broadly disseminate their news, rather than limiting distribution to a corporate website.

There’s a large investor in Omaha who doesn’t want to be checking hundreds of websites minute-by-minute throughout the day. But then again, who would?


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