Wall Street on the Web: The web is a key tool for investor relations. How well are top corporations using it? We asked IR pros to rate the sites of some of the top companies

Call it the next frontier of investing. The number of individuals in the US trading stocks on the Internet has blossomed to 7.5 million and the group is expected to swell to 18 million in the next two years. With an equity trading volume equivalent to dollars 420 billion, it’s an investor class that, in a very short time, has gained Wall Street’s respect.

Call it the next frontier of investing. The number of individuals in the US trading stocks on the Internet has blossomed to 7.5 million and the group is expected to swell to 18 million in the next two years. With an equity trading volume equivalent to dollars 420 billion, it’s an investor class that, in a very short time, has gained Wall Street’s respect.

Call it the next frontier of investing. The number of individuals

in the US trading stocks on the Internet has blossomed to 7.5 million

and the group is expected to swell to 18 million in the next two years.

With an equity trading volume equivalent to dollars 420 billion, it’s an

investor class that, in a very short time, has gained Wall Street’s


Individual investors have driven traditional brokerages like Merrill

Lynch to join the online trading revolution. And the New York Stock

Exchange and Nasdaq have proposed extending trading hours - allowing

individual investors to trade shares when they come home from their day

jobs or want to spend a relaxing evening making even more money.

Before the Internet, investors relied on corporate IR departments to

snail mail shareholder information, news releases, proxy votes and other

information. But, today’s online stockholder can use the Web to download

annual reports, manage complete stock portfolios, execute trades,

perform research, check stock quotes and communicate with IR

departments, all in a matter of minutes. In fact, four out of five

investors now access corporate information through the Internet,

according to industry statistics.

The opportunity to cater to this new investor class hasn’t escaped the

attention of corporate America. A majority of publicly traded companies

maintain web sites with IR components - 87% of The National Investor

Relations Institute’s corporate members (424 companies) contain IR

sections on their sites and 91% of the Nasdaq 100 post earnings news on

their sites.

’The increasing number of investors surfing the web makes it more

important for corporations to maintain comprehensive and useful sites,’

says PR Newswire IR director Michelle Savage. ’Many investors have taken

over their own portfolios because they are able to use the web to

conduct research on companies themselves,’ she explains.

Quality and quantity problems

But recent research indicates that corporate web sites are lacking in IR

firepower. PR Newswire surveyed the Nasdaq’s top 100 companies in


The newswire found the companies’ sites are IR ’content-weak.’ Fifteen

percent lack basic contact information, 13% are without stock quotes,

46% require visitors to clink on a link to access stock quotes and 73%

do not provide dividend information. The multi-media offerings of the

sites were even slimmer - 94% do not offer video and 86% don’t offer


And only 37% of the National Investor Relations Institute’s 500 member

companies offer investors the chance to receive an annual report through

Internet sites.

Corporate size doesn’t appear to make a difference in how investor

information is treated on the web either. CCBN.com, a Boston-based

Internet shareholder communications firm and host of more than 600

publicly traded companies on the Internet, found that Fortune 500

companies fared little better with IR content. The company analyzed 100

of the Fortune 500’s corporate web sites last year using 13 information

categories: stock charts, quotes, SEC filings, corporate profiles,

financial news releases, information request services, analysts

coverage, research reports, event calendars, annual reports, earnings

estimates, financial overviews, and multi-media capabilities.

CCBN.com’s analysis found that only 49% of the companies analyzed

offered more than half of the investor features while none of the

companies offered all 13 components. The most thorough companies in the

survey were Cisco Systems, Intel and Microsoft, which all contained 11

of the 13 features.

The most commonly listed information on surveyed sites were corporate

profiles, financial news releases, financial overview and annual


’A lot of companies haven’t caught up with the fact that for the

individual investor the web site is the single most-important place to

go for information without having to go to brokers, Dow Jones or

newswires,’ explains Bob Amen, partner and director-in-charge of

Ketchum’s global corporate practice.

The question of why companies aren’t filling their sites with

investor-rich content begs to be answered. Corporate officials typically

cite lack of time as a major reason. ’The answer we hear CFOs and CEOs

say most often is that ’we planned to embellish it but never quite seem

to find the time’,’ says Roger Pondel, president of Los Angeles

corporate IR firm Pondel/Wilkinson Group.

Just exactly what are critical components of an IR web site? Jack

Phillips, VP of product development at CCBN.com, says, at the very

minimum, a ’plain, vanilla’ site should include: financial statements

with EPS (earnings-per-share) and PE ratios (price-to-earnings) and

operating margins, analyst coverage, news and earnings releases, events

calendars, stock quote (15-minute delay) as well as historical and

current dividend information.

’One of the biggest things is some button at the home page that says

click here for IR. If investor information is not front and center, then

that company is making a mistake.’

Julie Creed, Financial Relations Board partner and market intelligence

executive, agrees the company’s home page should be designed with an IR

link on the home page, rather than hidden within corporate


In addition, the IR section should include a FAQ (frequently asked

questions) section, information on stock investment programs like DRIPS

(dividend reinvestment plans) and messages from the company chairman or


CCBN.com’s Phillips says a major problem with many corporate web sites

is that visitors are required to link off the company’s home page to an

outside source to get stock quotes or SEC filings. ’When corporate web

sites direct viewers outside their web sites, they (potentially) lose an

important customer.’

Web sites are a powerful tool in the corporate IR arsenal, and have the

potential to be more than a repository of investment information. The

importance of communicating organizational messages to shareholders,

including a corporate profile on the web site outlining the company’s

mission statement and business goals, cannot be underestimated. ’It

plays a crucial role in developing corporate reputation since it cuts

across stakeholder groups that affect public companies,’ says Ketchum’s


One site that is well-designed, chock full of data and does a good job

of communicating the company’s strategic message, Amen says, is


’The home page sets a great tone that says the company is in ’the

science of medicine,’ and ’life is our life’s work’.’

Michael Lissauer, senior VP of marketing at Business Wire, says Intel

and Hewlett-Packard are good examples of media-friendly sites. ’The key

is to communicate effectively and efficiently. The good sites are the

ones that are easy to access and communicate well.’

Online traffic

Recent data indicates that IR web site traffic is skyrocketing. CCBN.com

analyzed investor traffic trends on 130 active IR web sites in the

fourth quarter of 1998. The company discovered that public company sites

averaged 30,000 hits per month, representing a 38% increase over the

21,700 hits per site during the third quarter of 1998 - and individual

investors aren’t the only ones accessing corporate web sites.

When it comes to serving as the principal technology information source

for analysts and portfolio managers, web sites rank second according to

the Association for Investment Management & Research (AIMR). A survey of

355 analysts by AIMR last year found that 95% relied on conference calls

for receiving information. Only 25% rated corporate web sites as

offering valuable information.

However, this is changing. Equity analysts, financial research

departments and portfolio fund managers are increasingly visiting web

sites to access corporate information. A more recent survey by AIMR in

March this year found that 65% of analysts say IR information on

corporate web sites has made it easier to provide accurate company

analyses. You can expect that figure to rise.

’The investor page of a web site is the first page an analyst, as well

as fund manager, is going to use to do their initial (online) research,’

says Rhonda Chiger, managing director of global consulting at Thomson

Financial Investor Relations.

The Web also provides the investment community an opportunity to bridge

the gap between traditional telephone-based conferences and the

Internet. Multimedia video and audio features can be built into web

sites, enabling conference calls to be broadcast online. This method of

’webcasting’ has become an efficient, cost-effective means for publicly

traded companies to release information to a wide audience, experts say.

Many web sites offer investors the chance to view or hear conference

calls either live or archived and it’s a feature that industry observers

say helps companies meet better SEC disclosure standards. ’Enabling it

to be simulcast on the web makes it more broad-based disclosure,’ says

BW’s Lissauer. And NIRI’s Thompson adds, ’It offers public companies a

tremendous opportunity to broadly disseminate information to both

individual and institutional shareholders.’

The Dow Jones Industrial Average continues soaring northward, recently

eclipsing 11,000 in spite of pundits’ predictions. Investor traffic to

corporate IR sites is climbing as well. The Internet is the information

mine of 21st century prospectors. Corporate IR departments need to keep

in mind that if their web sites are dull and lack action - like the gold

diggers in the old frontier, new shareholders will go somewhere



Company: Amazon.com

Address: www.amazon.com

Score: 6

Analysis: Other than having to scroll down the page to see the link to

information about the company on the bottom of the page, it was

relatively easy to access Amazon.com’s investor relations component. The

frequently asked questions page was very text-heavy. We would suggest

incorporating more graphs and tables that would make information easier

to read. That would also make it helpful for investors to quickly

(rather than having to click onto yet another page) send in requests for

information or questions.

Interactive features were lacking but, we loved how easy it was to

download the annual report.

- Roger Pondel, president, Pondel/Wilkinson Group

Company: Johnson & Johnson

Address: www.jnj.com

Score: 8

Analysis: The site offers detailed product information. Users can access

most any financial record or view press releases that gives investors

the ability to clarify direct financial questions. The sample investor

questions and answers are also quite well done with typical questions

that IR professionals encounter. But both professional and private

investors may find this site a bit overwhelming, and somewhat confusing.

Therefore, we suggest a simpler format that may incorporate more

graphics and photos.

This change in format will allow the company to more effectively stress

key corporate themes and concepts.

Michael Porter, president, Porter LeVay & Rose

Company: Starbucks

Address: www.starbucks.com

Score: 4

Analysis: Starbucks’ site was attractive and finding the investor

relations page was very easy. However, there was a dire lack of

information incorporated into the IR section. This site also lacks

interactive features which, at the very least, should include an e-mail

address so that investors can request information and ask questions. A

company with Starbuck’s stature should alsogive on-site access to

financial press releases while providing a means to easily download the

annual report.


Company: Lucent Technologies

Address: www.lucent.com

Score: 9

Analysis: Lucent’s site is alive. The home page gives an immediate

impression of the company’s ’dynamic.’ It is easy to move into sections

like ’news & investor info,’ ’careers’ or ’solutions.’. The investor

site is full of data, which goes back to the company’s IPO. There is an

extensive ’request corner’ with three versions (web, pdf and print) of

the 1998 annual report.

Lucent also has an IR ’hotline’ and a ’shareholder direct’ line that is

open 24 hours a day. Plus, there is a glossary of terms. No matter where

you move on the site, you know this company is committed to ’make

communications work.’

Bob Amen, Partner, Director Ketchum Global Corporate Practice

Company: Bed, Bath & Beyond

Address: www.bedbath.com

Score: 1

Analysis: The Bed Bath & Beyond site definitely needs a lot of help. It

starts with an address that is short but doesn’t describe the


This is a very bare-bones site that is comprised of a home page, links

to a job search engine and how to apply for a job online. No other

information about the company or investor relations was available. Our

basic recommendation would be to incorporate pages to the web site with

information about the company, and certainly, its status as a publicly

traded company. There was also a lack of interactive features.


Company: Pfizer

Address: www.pfizer.com

Score: 9.5

Analysis: Pfizer hasone of the best sites I have seen. The home page has

a powerful layout proclaiming that ’Life is our Life’s Work.’ The

company’s personality and strategy is evident throughout the


The home page lists information from the Mayo clinic on prevention and

wellness, a Fanzine for kids, and news on a stock split and first

quarter earnings. What differentiates the site is the extensive space

allotted to the company’s mission and value statements. The investor

page is well designed and full of data. The section on the 150th

anniversary is outstanding and again, sets the strategic direction of

the company’s future, which is something most portfolio managers want to



Company: General Electric

Address: www.ge.com

Score: 7

Analysis: While the graphics only rudimentary in design, they help you

get information. But GE’s investor site is pretty mundane, with

frequently asked questions, annual reports and press releases, which

aren not that accessible. The information appears designed for the

average investor.

There is no personality in the web site unless you are satisfied with

the old tag line ’We bring good things to life.’ The corporation’s

strategy is buried in the annual reports and the user gets no real sense

of GE’s strategic direction. The clear impression the sites gives is

that the company is data oriented since everything is offered in

column’s, bar charts and chronological order. statement.


Company: General Motors

Address: www.gm.com

Score: 9

Analysis: The site is easy to navigate which lets investors and Wall

Street professionals retrieve information quickly and in full


It also offers a great presentation of products and operations as well

as allowing investors to receive an exciting snapshot of the overall

business and developments. A user can also appreciate the option of

customizing the site, helping investors save time and expedite

decision-making. The sample investor questions and answers are well done

and common questions that IR professionals field from investors. Still,

GM needs to portray itself as more of a global company looking to

continually expand its shareholders on a worldwide basis.


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