Don't Trust Everything You Read,
Even On The Internet

September 11, 2000

A couple of weeks ago, on an otherwise quiet Friday morning, a man called an Internet-based news service, convinced employees that he was an official spokesman for a Costa Mesa, Calif., technology company and sent a press release that caused the company great damage.

The events that led to this damage involved a string of errors that would be comical if they weren't so serious. They all had one root cause: the fact that many people make major decisions based on information they find on the Internet but don't confirm.

The existence of bogus information on the Internet should be no secret to anyone. After all, this is a utility that regularly passes information without regard to accuracy, timeliness, impact or usefulness.

So how was it that Internet Wire, a news service that distributes press releases for companies, fell for a phony Emulex Corp. release announcing a sweeping SEC investigation, the resignation of its CEO and other actions? Why wasn't there an effort to confirm such an obviously significant release?

Well, it was early in the morning, apparently, and since Emulex is on the West Coast, it couldn't be reached. So the release was distributed without any attempt to verify its accuracy.

And how is it that both Dow Jones and Bloomberg news services ran this story without verifying it?

Apparently, it was still early in the morning, and you can't let the news wait, even if it's wrong.

By the time someone (apparently at CNBC, which refused to run the Emulex story until it was verified) found the CEO, who set things straight, the company had lost more than half its market capitalization, and some investors lost millions of dollars. While Emulex came out of this mess mostly intact, who knows what will happen in the end to the investors.

The critical part about this story, though, is that it has Internet written all over it. Internet Wire received the press release from someone the staff never met, over the Internet. Internet Wire passed the press release over the Internet to the financial press. Apparently, both sets of parties thought that if it came over the Internet, it must be true.

Years ago, when this release would have been delivered on paper by someone from the company, it would have been checked out. If it had arrived in the mail, a phone call would have been made to verify it. Now, because it arrives over the Internet, it just moves through the process, automatically.

Of course, this fiasco could have been prevented if the parties involved had been responsible enough to treat the Internet just like any other unfiltered information repository.

So now that an arrest has been made, it's over with, right? Well, no. Not for companies that use the Internet as a key part of their business. Ask yourself how many decisions you make each day that are based on information you find on the Internet. How many business transactions do you accept for which you don't verify the source? How many times do you do all of your research in one spot and never go anywhere else once you've found what you think you're looking for?

Remarkably few people go to a second source to verify the information they receive over the Internet. Why? Because we're the ones tracking down the information from any number of sources, we think it must be true.

So how was it that two companies whose job it is to distribute accurate information managed to lose sight of that? They were in a hurry. In other words, they felt compelled to operate on Internet time. We all know about Internet time, and we all know that it's frequently an excuse for doing things poorly. This is one instance when doing things poorly had a huge cost.

Learn from their mistake. Make sure you verify the information you use from the Internet or the information others send you over the Internet. In the words of Ronald Reagan: "Trust, but verify."

(Disclosure: Internet Wire is a competitor of PR Newswire, a service owned by InternetWeek's parent company, United News & Media.)

Wayne Rash is managing editor/technology. He can be reached atwrash@cmp.com orwrash@mindspring.co