SEC Looks Into UAL Stock Scare; Implications For Online News?
Thursday, September 11, 2008; 10:07 PM
A ton of digits have been devoted to this in other spots but the SEC's decision to investigate takes it to another level. The backstory: a six-year-old news story about UAL declaring bankruptcy made it into the Tribune-ownedSun-Sentinel's current news flow, was picked up by a Google ( NSDQ: GOOG) News bot and, via a reporter for a newsletter, made it onto Bloomberg News. After a lot of buck passing, Tribune finally admitted that the story did appear in its news flow while Google continues to insist its bot was just doing its job. That leaves us with the human who read the story after it came up during a routine Google News search on the term "bankruptcy" and shoveled it onto Bloomberg News, where the stock proceeded to plummet before anyone realized what was happening.
Now, the WSJ reports, the SEC has opened a preliminary investigation into how the story resurfaced. It may not turn into a full investigation but a lot of investors felt the impact Monday and those trades aren't being reversed. However it came about, the incident is the latest in a series of false market rumors. We experienced one effort a while back when someone sent out a faked press release about IAC; similarly, in May, Barry Diller expressed concerns about rumors targeting Expedia and moving the stock. This one is different, though, because it calls into question the systems used for archiving news and making it instantly available online. The Tribune says the story made it into the current news flow because of one person visiting the article at 1 a.m. Sunday morning and that pushed the story into the business section's "most viewed" list, which is where Google News found it Sunday afternoon after someone else clicked on the link. In an interesting insight into Google News, the first inbound link came in three minutes later. But the major trouble began when Income Securities Advisors put it on Bloomberg News?and getting it there had nothing to do with bots.
So are there implications for online news? Back when I taught other journalists how to use the internet, I usually started by reminding them that what you put on the internet has the half-life of radioactive waste. Since then, the ability to find and deliver information has increased beyond anything I could have imagined. The power is only enhanced by automation, algorithms and the like. Those of us trying to make information as accessible as possible will have to be even more careful but it's hard to predict all of the pitfalls.
SIIA's Ed Keating told MarketWatch: "While the technology is there, it's just an algorithm, and the algorithm did not go to journalism school." Not all of us went to j school, either. (For the record, I didn't; Rafat did.) The IDC's Crawford Del Prete sees it as a "black eye for Google"?"Just because the information came from a newspaper site does not make it current news." I routinely get Google Alerts for stories that are months old but show up because a link farm has glommed on. But, as Google spokesman Gabriel Strickler explains: "Our mission is to organize the information and make it accessible and usable. Their mission is to create that information. The onus is on the publishers to make sure that the information is accurate." Or, to quote my favorite line from Dorothy Parker, "You can lead a horticulture but you can't make her think." Google's bot didn't have a tripwire that went off when only one publication had the story or when it it was identical to an earlier story from years earlier. Maybe it should. And maybe journalists and publishers need to be more careful using the results of searches.