$2B in Lost Ethics
Jim Forbes posted over the weekend about a bogus report that Apple would delay the release of both the Iphone and it’s next OS code named “Leopard” and how they lost 2b in market cap almost immediately.
The background here is pretty simple, a bogus email appeared around the middle of last week that looked like it may have come from within Apple and reporting that the companies iPhone and next version of its operating system, Leopard, would both be delayed. The ginned up email was forwarded and picked up by EnGadget.com, which ran a piece based on the e-mail. In a matter of hours, Apple’s stock began to fall and by the time anyone had the sense to check the underlying facts, Apple had lost about $2bn in market cap.
Jim then nails the problem down:
But the Apple incident last week speaks volumes about the perils of the new model of citizen journalism and rumor sites. What they should have done was place a due diligence phone call to Apple, in an attempt to verify the story and to fulfill basic news reporting requirements. By the time other Internet sites picked up the story, some writers had thought to call Apple, which quickly denied the rumor, resulting in the arrest of the stock’s brief fall.
With blogs, forums, and citizen journalism taking a more prominent role in news, we’ve created a monster. The basics of journalistic ethics and responsible reporting hasn’t been forgotten on the net, it never really existed. The problem for us is that the newspapers are adopting consumer generated content so quickly, it’s only a matter of time before something like this happens again, and it very well could happen in print someplace like the New York Times, or your local paper.
Of late, the papers have been cutting back. Among the first areas abdicated has been the TV columns. Hardly a week has gone by that we haven’t heard about this paper or that deciding to rely on wire stories and citizen journalism for TV criticism. I expect the next thing to go will be the movie columns. But where will they go from there? If the model works, expect to see high school sports, even coverage of local politics to move to the hands of the untried and untrained.
It’s not going to get better either. Look at David Churbuck’s post about Forbes.com turning their writers into pageview slaves. Writers are judged upon how many page views they generate online. Hence the editors are using pageviews as a major factor in deciding what to cover. I am hearing requests from newspapers as well to import their website content metrics into their print system to help them make editorial decisions. While that may be good for the bottom line, it’s death to news. Instead of editors telling us what they, the ones in the know, think we need to know, they will instead print that which they think we want to know, a fundemental difference, and one that ensures us of more Anna Nicole Smith, Paris Hilton, etc. Honestly, do we really believe that metrics would have told Ben Bradley that the public wanted to read about Watergate? I can just picture some 30 something style editor poo-pooing the story as “Booorrrrriiiiinnnnggg…”
I posted about the impact Viral news has had on the industry in November, and that same post could sum up much of this. We have stopped relying on the news media for our news, and in the process, we now have news on which we cannot rely. Blogging is news with the journalistic ethics filed off.
2 thoughts on “$2B in Lost Ethics”
Mark – This is one of the best things I’ve read about the pros and cons of the “citizen journalists”. Fine if the newspapers forego TV reviews, not so fine if they start ignoring politics. I’m not a big fan of law suits, but maybe if people who were harmed started going after the bloggers doing the harming, it would help matters.
Thanks for a thoughtful post.
Great post. I wonder if this will be the new “pump and dump” stock manipulation play we will see more people attempt? It could work long or short. Certainly a step ahead of spam emails hyping obscure penny stocks.