THINKPIECE - Can mass distribution of press releases over the Internet substitute for real company news?

A story in The Wall Street Journal has convinced me that the stuff I’ve been doing to pay my rent all these years really works. ’Stop the press (releases)! Internet firms live to churn them out,’ the headline screamed.

A story in The Wall Street Journal has convinced me that the stuff I’ve been doing to pay my rent all these years really works. ’Stop the press (releases)! Internet firms live to churn them out,’ the headline screamed.

A story in The Wall Street Journal has convinced me that the stuff

I’ve been doing to pay my rent all these years really works. ’Stop the

press (releases)! Internet firms live to churn them out,’ the headline

screamed.



The impact of publicity on stock prices was clear 20 years ago when we

issued press releases announcing a company’s earnings with a phone on

each ear, simultaneously giving news to Dow Jones and Reuters. Also,

puff pieces - profiles in Business Week, Fortune and Forbes - were

considered a home run and were regularly reprinted for distribution to

investors and the guys at the club.



The new thing is really serious. The impact of publicity on the Internet

is fast and global. I first noticed it in action three years ago when a

client called to complain that their competitor was getting tons of

publicity and they weren’t. I was stunned because we had just done a

competitive analysis showing our client had dramatically more publicity

However, this executive was not referring to ’journalism’ but press

releases posted on paid newswire web sites. It took awhile to sink in,

but corporate executives and shareholders were placing almost as much

emphasis on paid postings as in news media, and the paid postings

affected stock price every bit as much as real news. Maybe more.



That was the beginning. When they’ve tasted steak it’s tough to go back

to hamburger. One press release per quarter became one per month and

then one per week.



Right now, as it has for many years, the SEC requires full disclosure to

include at a minimum Dow Jones and Reuters. However, the tremendous

number of companies going public over the last decade has left no room

on those two services to post all of the information in a timely

manner.



Bulletin board stocks don’t even have a chance. And at certain times

even exchange-listed companies can wait hours to see their news cross

the wire.



The Internet actually provides faster, broader distribution of news than

old media and it’s only a matter of time before the SEC begins to allow

some form of distribution over the Internet to qualify as full and

timely disclosure of material news.



The problem, though, is similar to the story about the little boy who

cried ’wolf.’ With so many press releases being distributed by some

companies, it’s hard to tell real news from media advisories or

pre-announcements or road apples. A Mirimba spokesperson told the

Journal, ’We do one a week ... they’re certainly not hype.’



My agency is certainly a lot more profitable than Mirimba. Calling all

investors!



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