In a major announcement yesterday, the U.S. Securities and Exchange Commission (SEC) provided new guidance to public companies stating that corporate Web sites and blogs are a suitable means for official information dissemination to investors, provided those sites are a “recognized channel for distribution.”
This apparently means that if the corporation has an openly available and accessible Web site and/or blog, that posting information to that blog satisfies legal disclosure requirements. WOW.
Entire industries (including financial services PR and wire services) have been built at least in part on the SEC’s long-standing requirement for public companies to proactively “push” information to investors via press release distribution.
This new guidance changes the game, and creates clear winners and losers.
Public Company Corporate Blogs – 4 Winners
If companies are not required to push information, then any type of alert or notification system that would make investors away of new data posted to a blog is a huge winner.
- RSS systems like Feedburner (which is really Google)
- Possibly enterprise email service providers like ExactTarget
- Blog software entities like WordPress, and especially enterprise blog systems like Compendium Blogware
- PR firms that understand blogging, blog management, and social media
Public Company Corporate Blogs – 3 Losers
The new SEC decision will put a serious squeeze on some, as the distribution of official press releases is an expensive and lucrative business. Losers in this new scenario include:
- Any sort of wire distribution service like PRWeb, Marketwire (which we’ve used at Convince & Convert for social media release distribution), and BusinessWire (which is a Berkshire Hathaway subsidiary
- PR firms whose current service mix includes a healthy dose of financial disclosure releases
Any other winners and losers? Add a comment!
Great Catch!
I’ve got this on my alerts, and I think you might be the first blogger in the country to actually understand and appreciate the ramifications implied in this decision.
Good Work.
Chris Baggott
CEO
Compendium Blogware
http://www.compendiumblogware.com
Thanks Chris. I too am amazed by the lack of coverage on this, even among the “PR 2.0″ blogging community. When can I invest in Compendium?
So can someone explain why Berkshire Hathaway bought BusinessWire?
I have plenty of friends at the wire services, but I’ve said to their faces that the social media world will not pay the towering prices for distribution when close to free sounds fair. A friend at a wire service said the SEC updates would help her company but that’s whistling in the graveyard unless you can convince big companies that they should host their IR sites (like Nasdaq’s Shareholder.com ) or pump out webcasts and podcasts (like VCall or Thomson Financial or On24).
Jason Baer nails it above and on TechCrunch comments (Brian Solis post) that RSS is the big winner and continues to be more important than a company’s standard Web site.
For my PR clients, cost was always key and I guess compliance and communicating to stakeholders were there too. I always laughed at the Wire claims of connections to journalists who subscribe to feeds – well, OK, but that’s what my clients paid me and PR agencies to pitch (not blast). Oh yeah, “getting social media” is probably a selling point in my industry these days
I really like Tom Foremski’s take on the news – especially since he ran with my Utterz post http://www.utterz.com/u/utt/u-NTExODAwMQ#utt-NTExODAwMQ and then published: http://www.siliconvalleywatcher.com/mt/archives/2008/07/sec_likely_to_c.php
Thanks Adam. I’m loving the Utterz post. Nice job. Wire services will be the travel agents and yellow pages salespeople of the next two years. Disintermediated by the Web.
Since PRWeb has never been used to fulfill Reg FD in the traditional sense, I’m not sure why you would consider PRWeb a loser in this light. There’s need for press releases beyond providing proper disclosure as indicated by the tens of thousands of PRWeb users who are not using PRWeb to accomplish disclosure but instead to gain increased and long-lasting visibility to their news.
Hi Joe. Thanks for the clarification. If PRWeb is not used to fulfill Reg FD, then I may be mistaken in including you. In general, my point is not that PRWeb and other distribution services are going away, but that a segment of their market may erode based on this decision. Which is the definition of a loser in the context of this post. It’s similar to how TV and print are eroding due to the movement of ad dollars online. Is TV going away? Of course not. But they are having to reengineer their business model due to online pressures (product placement and sponsored shows being their first foray in that regard). I think this decision hurting distribution companies to some degree (proportionate to how much of their business is comprised by that type of work) is a reasonable conclusion at this point, but of course things change fast on the Web (and sometimes in government) so we’ll see what happens.
Here is a link to Business Wire’s preliminary statement on this issue:
http://www.businesswire.com/news/home/20080801005612/en
-Tom Becktold, SVP, Marketing, Business Wire
Hi Tom. Thanks very much for the link. I agree with Business Wire’s statement. As an investor, I do not believe that Web or blog posts are sufficient disclosure. It puts too much onus on the investor to seek information, set up RSS feeds, etc. But I do maintain that it’s going to cause a big mess for you and a lot of other folks if the SEC stands by its decision (and if that decision is interpreted to mean that Web/blog disclosure is satisfactory).