CMGI's Wetherell Spreads The Gospel of Online Chat
By AARON ELSTEIN
THE WALL STREET JOURNAL INTERACTIVE EDITION
January 14, 2000
When it comes to the Internet, David Wetherell of CMGI is putting his
mouth where his money is.
Mr. Wetherell, chief executive officer of the
Andover, Mass., Internet highflier, says he
decided to join in the discussion on a
message board on Raging Bull, the
stock-chat Web site owned by CMGI, in order to answer questions from
shareholders.
Using the alias "dwether," Mr. Wetherell made his first post to the CMGI
board on Dec. 24, and made additional postings on Jan. 2, 3, and 5. In his
postings, Mr. Wetherell plainly identifies himself as the company's CEO.
He says he expects to join in the online discussion at least once every two
weeks.
Mr. Wetherell says message boards are valuable because they can "foster
a sense of community" between shareholders and companies. Executives,
he adds, can learn a lot about the market perception of their companies by
venturing online.
In fact, he's so convinced about the value of participating in these forums
that now he's prodding CEOs at many of the 60 companies that CMGI
invests in to follow his lead and become a part of Raging Bull's sometimes
rambunctious community -- where message board participants have been
known to attack companies and executives, and even each other, when
opinions conflict.
His appearances also are a marketing opportunity for Raging Bull.
Spokeswoman Tara Burgess says the site hopes to gain the reputation for
being the place where online investors can go to hear directly from CEOs.
Just don't expect to hear from back from these top executives immediately.
It took message board participants 10 days to receive a response from
Jeremy Barbera, CEO of Marketing Services Group, a New York
Internet-services company in which CMGI owns a 10% stake. He said the
reason for the delay was that it took some time for company lawyers to
review his answers.
Mr. Wetherell says that he hopes his appearances on the CMGI message
board will help "clear up misconceptions" about his company. For instance,
an investor posted a question on Dec. 24, asking whether CMGI was
considering investing in a company that handles online health-care bill
presentment. Mr. Wetherell responded on the board: "We are not
considering any significant investments in the health-care area at this time. It
seems to me others are doing a fine job in that space."
That kind of insider glimpse at a company's investment strategy is
something that once was reserved only for the ears of Wall Street analysts
and deep-pocketed investors. But Mr. Wetherell says he believes it's just
as important to provide this kind of information to small investors to foster
shareholder loyalty.
"I think it's important that we do this," Mr. Wetherell says. "It's good
shareholder relations. I hope it becomes a trend."
While it's not unusual for the heads of small companies to participate on
Internet message boards, it's almost unheard of for top executives at larger
companies to make themselves available on the boards. Many small
companies have embraced online discussion forums as a way to
communicate with shareholders, because they often lack their own
in-house investor relations and can't afford to hire an outside firm.
But at larger companies, top executives usually avoid participating in online
stock discussions, in large part because their own investor-relations staffs
discourage the idea. Public-relations experts say doing so could send the
wrong message to institutional shareholders, who may perceive that
company executives are spending more time surfing the Internet than
running the company, says Holland Carney, executive vice president at
Alexander Ogilvy, a San Francisco public-relations firm.
Another potential danger is that CEOs might get caught up in the often
heated atmosphere of Net message boards, says Louis Thompson,
president of the National Investor Relations Institute, a professional
association of investor-relations officials, based in Vienna, Va.
"I doubt you'll see a lot CEOs going on the boards because of the risk they
might say something they shouldn't," he says.
But CMGI's Mr. Wetherell says going on message boards to answer
questions from individuals serves the same purpose as meeting with
institutional investors at a conference sponsored by an investment bank.
And, Mr. Wetherell says, it's unlikely he'd get into a shouting match with
any online investor: A Raging Bull employee screens his questions before
Mr. Wetherell answers them. He also says he refuses to make
forward-looking statements in his messages, in order to avoid potential
legal problems.
Regulators would likely welcome CEOs
appearing on the boards to address
shareholders, so long as the executives
manage to avoid slipups or inappropriate
comments, said Richard Phillips, a partner at
the Washington law firm of Kirkpatrick &
Lockhart and former assistant counsel at the Securities and Exchange
Commission. "A CEO would have to be careful about how they say things,
not just what they say," he says.
For example, if an executive indicates on the boards that quarterly earnings
are going to be good, he also should disclose whether that's a one-time
blip or represents a fundamental improvement in the company's business.
Otherwise, Mr. Phillips says, he could risk misleading shareholders.
Even though participation on message boards is meant primarily to
promote goodwill with shareholders, most CEOs remain reluctant to take
part. Ms. Burgess, the Raging Bull spokeswoman, says the site has
approached companies in and out of the CMGI universe, as well as public
and investor-relations firms, about having executives join in the site's
message board discussions, but "there's been some reluctance," she says,
because of concerns that executives might blurt out something they didn't
intend to.
Public-relations executives add that CEOs risk inviting impostors, who
may disseminate false information, Ms. Carney of Alexander Ogilvy says.
So far, only one executive of a CMGI-owned company has followed Mr.
Wetherell's lead. Using the alias "MSGICEO," Mr. Barbera of Marketing
Services Group posted a message on Jan. 3 on Raging Bull saying he
would take questions in the hopes of "improving the flow of accurate
communication."
On Jan. 13, he posted answers to 15 questions, and said more will follow
next week. He says there's been a "180-degree" change in tone on the
board, which he feels was full of ill-informed opinion and rumors. "The
mood seems have gone from 'We're nothing to the company,' to 'Hey,
they're listening to us,'" he says.
Bob Dilenschneider, chief executive officer of Dilenschneider Group, a
New York public-relations firm, says the boards have become so
important to individual investors that CEOs should make it a point to
appear on them from time to time. "They are a rough-and-tumble
environment where anyone can ask anything, but if you can't handle that
you shouldn't be a CEO," he says.
So far, Raging Bull participants appear grateful for the attention from
Messrs. Wetherell and Barbera.
After Mr. Barbera posted his answers, one poster responded: "We
appreciate your time!!! JB, it is great to hear from you and your responses
to our questions. We look forward to your continuing communication with
us, MSGI faithful!"
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