Sun's Schwartz pushes Net disclosure

Sun CEO Jonathan Schwartz is advocating cutting out the middle man -- in this case, the media -- in disclosing corporate news to the public, preferring to bring that information straight to the people via the Internet.

In his public blog, Schwartz shared a letter to the SEC this week, in which he asks that the blogosphere and RSS be made acceptable means of disclosing to investors and the public "issues that'd be deemed material to Sun's financial performance."

Currently, he says, Sun and other public companies need to "hold anachronistic telephonic conference call, or issue an equivalently anachronistic press release, so that the (not so anachronistic) Wall Street Journal can disseminate the news" so as to be compliant with Regulation Fair Disclosure (Reg FD).

Reg FD, Schwartz notes, "attempts to ensure no one audience gets preferential access to material non-public information. It's a great concept, designed to prevent selective disclosure, or actions that might advantage one investor over another."

However, he contends that those press releases and conference calls aren't as readily accessible to the world as is a posting on a freely accessible Web site. He says in his letter to the SEC that

"My blog is syndicated across the Internet by use of RSS technology; thus, its content is 'pushed' to subscribers. This website is a tremendous vehicle for the broad delivery of timely and robust information about our company. It is our view that proprietary news outlets are insufficiently accessible to the broad majority of Internet users and individual shareholders. It is certainly the case that the Internet represents a broader user base than those able to afford subscriptions to traditional forms of media ... ."

It's an interesting proposal, certainly. As a journalist, I've come to prefer reading about news announcements in blogs instead of in press releases. The tone of the latter tend to be so laden with cliche market-speak (how could every single company out there be a "leading provider"?), they sometimes border on incomprehensible.

Blog posts written by real people, on the other hands, tend to be more engaging and not quite as sickeningly sugar-coated.

But that's more a style issue than a dissemination issue, isn't it? The question at hand is, would investors and the public be better served if they could get company information immediately, from the source?

Well, in some ways, I'd say yes. It would make perfect sense for people interested in getting news of "issues that'd be deemed material to Sun's financial performance" -- or whatever company interests them -- to have that information show up in their e-mail boxes or RSS readers at the same time it reaches journalists. There's really no reason that shouldn't be an option right now.

But I don't know that Schwartz would be successful in cutting out the media middle man entirely, if that's his aim. For one thing, if I want to keep abreast of Sun news and suddenly can't expect a formal press release, for some reason, I'd just subscribe to whatever RSS feed was appropriate.

The risk there is, if a company is running a bunch of different blogs and 10 percent of the news in those various blogs is worth reporting, there's a good chance I -- as well as the members of the public at large -- will miss it amid the hundreds of messages showing in your mailbox or RSS reader. Especially if you're an investor or a journalist or a technophile trying to track the goings-on at many, many different companies.

Also, I imagine that at least some readers out there might not be fully content with a company's spin on whatever news it has to share and will still seek some analysis from their news source of choice.

Moreover, his argument that all the press releases Sun sends out are somehow rendered inaccessible by media outlets is, frankly, bogus. Yes, some news sites do require a paid subscription. Some are free but require only a login. And some are freely accessible (such as InfoWorld.com).

Corporate press releases are also freely available via the BizWire, PR Newswire, and various other means.

One of the interesting points raised in comments responding to Schwartz's entry is that blogs, RSS, and e-mail may not be the most secure means to sharing important information, either. What happens when someone convincingly spoofs an announcement from Sun (e.g. "Sun finds Solaris causes impotence in lab rats"), and it ends up in thousands of e-mail-boxes simultaneously without going through that dreaded media filter? It may suddenly be up to the media to help undo the damage.

Another commenter writes, "The one question that I have relates to archiving the blog info. It is one thing to publish information. It is another to be able to find it at a later date. "

Bottom line, though: I truly applaud Schwartz's desire to keep investors, customers, and the public apprised of important news. By all means, post them in your blog and make them available by RSS and e-mail as soon as you can.

But there's really no harm in CCing the press in the process. In fact, you could benefit from it. Sometimes, we might write something good about you.

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