The Impact of Internet Misinformation on Corporations

Jerry Sheehan — Tue, 07 Oct 2008 09:21:23 -0700

Description

On October 3 at 9:15 am CNN iReport (user reported news featured by CNN ) ran the following story:

"Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack. I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath. My source has opted to remain anonymous, but he is quite reliable. I haven't seen anything about this anywhere else yet, and as of right now, I have no further information, so I thought this would be a good place to start. If anyone else has more information, please share it."[1]

News of the heart attack of Steve Jobs, CEO of Apple, quickly circulated through other formal media sources, the blogsphere, and became a major topic on social networking sites such as Twitter. [2]

The impact on Apple stock was dramatic with a decrease in value within minutes by almost $11 dollars per share. This drop destroyed more then $7 billion dollars from Apple's market capitalization. [3]

The only problem with this CNN iReport was it was completely FALSE. Denial from Apple happened moments (9:57 am) after they were made aware and yet the story continued to run on iReport for at least ten more minutes, being removed by CNN at around 10:20am.[1] By the end of the day Apple stock had recovered to $104 per share.[4]

Concern has arisen that the hoax may have been an attempt to purposely drive down Apple stock value prompting an investigation by the U.S. Securities and Exchange Commission. CNN has emphasized that it "makes no guarantee about the content" of the iReport site, removed the fraudulent post as soon as they were aware it was untrue, suspended the user account, and are cooperating withe the SEC investigation. [5]

While it is easy to focus on the lack of reliability in so called "citizen journalism" it is interesting to note that just about a month prior an error in publication by Bloomberg caused United Airlines stocks to temporarily drop by 75%. In that case, Bloomberg rebroadcast a report from Income Securities Advisors (financial news company) which had inadvertently reported a six-year old story about United Airlines filing for bankruptcy as being new breaking new due to confusion about the date returned from a Google search on bankruptcies.[6]

Wired summarizes how Internet republishing has changed the nature of fact checking: "Prior to the internet, if a news outlet like Bloomberg picked up information that another news publication broke, Bloomberg would have made phone calls to vet the information -- as much as that was possible -- before publishing its own story about the subject. That still happens in the case of articles that are published in the print versions of newspapers. But that happens much less with information that's picked up on blogs, and it almost never happens with information that's picked up by online mailing lists and newsletters."[6]

[1] "Apple Denies Steve Jobs Heart Attack Report: It Is Not True", Henry Blodget, Silicon Valley Insider, October 3, 2008, http://www.alleyinsider.com/2008/10/apple-s-steve-jobs-rushed-to-er-after-heart-attack-says-cnn-citizen-journalist
[2] Image from Twist, see http://twist.flaptor.com
[3] "Report: SEC Investigating False Steve Jobs Heart Attack Rumor", Jordan Golson, The Industry Standard, October 3, 2008, http://www.thestandard.com/news/2008/10/03/report-sec-investigating-false-steve-jobs-heart-attack-rumor
[4] "Apple Denies Report of Steve Jobs Heart Attack" Reuters, October 3, 2008, http://biz.yahoo.com/rb/081003/business_us_apple_jobs.html
[5] "SEC Examining False Report on Apple Chief Jobs", Connie Guglielmo, Bloomberg.Com, October 3, 2008, http://www.bloomberg.com/apps/news?pid=20601087&sid=a0NPvJx.wJoo&refer=home
[6]"Six-Year-Old News Story Causes United Airlines Stock to Plummet -- UPDATE Google Placed Wrong Date on Story", Kim Zetter, September 8, 2008, Wired, http://blog.wired.com/27bstroke6/2008/09/six-year-old-st.html

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Could This Be the 'Droid Your Looking For?

Jerry Sheehan — Tue, 23 Sep 2008 09:33:43 -0700

Description

Google and T-Mobile will unveil their first smart-phone today powered by the new Android Operating System (AOS). Android was announced by Google as they formed the Open Handset Alliance on November 12, 2007. It is quite impressive that less then one year later there is hardware on the street.

What's so special about Android? From a software standpoint there are a number of things that distinguish the operating system. First, and most importantly, this mobile operating system is open source allowing anyone in the community access to the underlying code for review, additions, extensions, etc. Think of Android as being the Linux of the mobile phone world. Second, unlike the iPhone which limits access given to third party developers to phone hardware AOS allows developers full access to any Android smart-phone hardware.[1] Android is also an important social phenomena. Thus far the focus of the mobile phone ecosystem has been primarily on hardware, with an open source foundation Android allows potentially million of new users to create their own cell phone experience based on their ability to write software. The other critical change in the Android business model is that applications for the phones will not be approved by anyone before being made available to the community. Apple created the App Store approach where users can download applications developed for the iPhone but first these must be approved by the company. Google is taking a hands-off approach regarding review which will allow anyone to post their AOS applications for the world to download on Google's Android Marketplace.[2]

Android is clearly a challenge to Apple, but not only in the mobile handset arena but also interestingly in their music service, iTunes. Amazon released their MP3 music download service in September 2007, while it has been moderately successful (7.3% of the music download market) it doesn't have nearly the market share of iTunes (sold more albums online in Jan/Feb of last year than any other U.S retailer). [3][4]

The first Android phone, the HTC G1, will come pre-loaded with the Amazon music service. With millions of new HTC G1 phones and Amazon's MP3 service offering slightly cheaper prices then iTunes and no digital rights management (DRM) handicap the mobile phone music battle should certainly heat up.[5] There are also interesting rumors that Android may grow beyond just the mobile phone marketplace and become the underlying foundation for a number of Internet aware devices. John Bruggerman, the Chief Marketing Officer at Wind River who has helped Google develop Android for the phone noted, ""We're starting to see Android get designed in on devices that extend way beyond the phone--things that might go in the automobile or things that might go in the home..."[6]

Computer & Information Science

Source

[1]"Android", Open Handset Alliance, Open Handset Alliance
[2] "Google Android: Can it Take on the Iphone?", The U.K. Telegraph, September 23, 2008, Google Android: Can it take on the iPhone? - Telegraph
[3] "Another Amazon MPS3 Sales Estimate: 8-10% of Download Market", Peter Kafka, Silicon Valley Insider, July 21, 2008, Another Amazon MP3 Sales Estimate: 8-10% Of Digital Download Market*
[4]"Top Music Seller's Store Has no Door", Michelle Quinn and Dawn Chmielewski, Los Angeles Times, April 4, 2008, http://articles.latimes.com/2008/apr/04/business/fi-itunes4
[5]"AndroidTunes? Amazon launching a mobile music/movie store for Google’s platform"MG Siegler, VentureBeat, September 22, 2008, http://venturebeat.com/2008/09/22/androidtunes-amazon-launching-a-mobile-musicmovie-store-for-googles-platform/
[6]"Google's Android: It's Not Just for Phones", Stephen Shankland, CNET, September 22, 2008.
http://news.cnet.com/8301-17938_105-10047551-1.html