How about this?: "Small Firms Use Cunning Ploy To Attract Bigger Audience
By CARRIE LEE
THE WALL STREET JOURNAL INTERACTIVE EDITION
When Consolidated Data Inc. issued a press release announcing that its
software for online banking was free of the year 2000 bug in mid-April, the
obscure technology firm managed to drop in the names of popular
companies like America Online, Yahoo!, Lycos and Excite.
The company, which is based in Mountlake
Terrace, Wash., also included 13 firms from
an electronic-commerce stock index in
another release two weeks later to publicize
that it would be featured in an upcoming television program.
IRT Industries, Inc. of Fort Lauderdale, Fla., mentioned eBay, uBid,
Amazon.com and Onsale -- several high-profile online retailers and auction
sites -- in a press release two months ago announcing that it was getting out
of the casino business to try e-commerce.
A number of relatively unknown companies, such as Consolidated Data
and IRT Industries, have been gratuitously including the names -- and
ticker symbols -- of well-established firms in press releases that they issue
through news wire services such as Business Wire and PR Newswire. And
sometimes the connection is a stretch.
The practice, dubbed "ticker spamming," has allowed the smaller
companies to broaden their audience in cyberspace because many online
sites that pick up the releases automatically code them to appear in the
news area for each company that's mentioned.
But ticker spamming, while not illegal, is causing concern because of the
potential impact on investors. In some cases, the broad publicity received
from passing mention of a popular firm has caused undue excitement
among investors, who have promptly rushed out and bid up shares of the
obscure companies.
Consolidated Data, which helps small banks and credit unions develop
Internet-based banking systems, saw its Nasdaq OTC Bulletin Board
shares surge 85% to $25 on April 12 when the company put out the Y2K
release. It slipped in the names AOL, Yahoo, Lycos, and Excite, saying its
YourBank Online.com technology (www.yourbankonline.com). could be
used to create a similar Internet portal. However, the euphoria died down
and the shares subsequently retreated.
P.V. Pakie Plastino, the company's chief executive, says Consolidated
Data wasn't trying to capitalize on the other firms' names in its releases
issued through Business Wire. "[When] you're trying to explain what your
product does, that's the only way we can describe it," he says. The names
were added so that "people would understand what we are trying to do."
But Arnold Wrobel, the chief executive of IRT Industries acknowledges
that having other companies' ticker symbols in a release can help get it
widely disseminated. He couldn't say whether that was the company's
intent when it included some in its release in mid-April announcing the
creation of Thinkbid.com, its online auction site (www.thinkbid.com).
"These smaller companies are playing tricks,"
says Joe Perna, director of content for the
PointCast, an Internet news service based in
Sunnyvale, Calif. "I don't have the resources to look at every one of their
[news releases] and try to validate each one."
Whether the intent in mentioning other companies names or stock symbols
in press releases is innocent or not, the two leading news wires, PR
Newswire in New York and Business Wire in San Francisco, say ticker
spamming is a problem and they are taking steps to combat it.
PR Newswire, which sends out up to a thousand press releases every day,
says it no longer allows a company to include another company's stock
symbol in a release without permission from the firms, or when, for
example, the other company is a party in a release about a merger.
Ken Dowell, vice president for media and content development at PR
Newswire, says all releases are reviewed by the company for compliance
with the policy before they are distributed. If a company refuses to delete
inappropriate ticker symbols "we won't run the release." He says most
firms have complied.
Business Wire still distributes its clients' press releases with all ticker
symbols intact. Nevertheless, the news wire says it has tried to encourage
several online news sites to alter their indexing policies.
"Business Wire takes a no-edit policy," says Cathy Baron Tamraz,
executive vice president. "We don't hyper-link anyone's ticker, it's the
portals that do it."
The service's no-edit policy helped Consolidated Data to push through its
release in late April, which slipped in the names of 13 companies in the
Nasdaq-Amex e-commerce index. Its shares almost doubled that day
before retreating to close at $14, still up 51%.
For Web portals and other Internet sites that provide news services, the
response to ticker spamming vary. Yahoo! Finance (finance.yahoo.com),
one of the largest purveyors of online financial data, changed it's automated
coding system in late April to curb ticker spamming on its site.
The press releases it receives are now filed under the news area for
companies that have a ticker symbol in the heading of the release only, the
other tickers are ignored. "We work with our news providers to ensure that
the news we associate with a particular stock quote is relevant," says Mike
Riley, producer of Yahoo Finance.
Intuit's Quicken.com (www.quicken.com), based in Mountain View, Calif.,
used to link every ticker symbol in a press release to the corresponding
companies' news sections until two months ago. "What we've done to stop
this is we don't pick up ticker symbols from the text of the story, we pick
up a list of tickers at the end of [it]," says spokeswoman Karen Cleeve.
Not all online news sites have taken an active approach. Web portal Excite
(news.excite.com/business) still codes the stories it receives from Business
Wire and PR Newswire so that every ticker symbol in a story is linked to
the news area for the corresponding company. PointCast says it depends
on news wires to screen the releases.
The bottom line for investors is to be careful about what they read online.
"The issue with the ticker spamming is one that a day trader or individual
investor has to be cautious about," says Micky Long, vice president for
Duffey Communications, an Atlanta consulting firm. "It's indicative of a
bigger problem. The overall content of the Internet has made information
readily available, but how credible is it? An individual has to ask 'Who is
the person I'm getting the information from?' "
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