The news is out that Google missed its quarterly earnings estimates today. As soon as I heard about this, I launched Google Chrome (my choice of web browser), typed in Y-A-H-O-O-.-C-O-M-/-F-I-N-A-N-C-E and then looked for the press release. It was nowhere to be found. Then I came to learn that the reason was that Google doesn’t issue quarterly earnings press releases through a traditional newswire. Rather, they attach their press release to a Form-8K that is then posted to the SEC’s EDGAR database. In addition, they post the press release to the investor relations section of their corporate website and then host a conference call.
But this time there was a glitch. The company that ordinarily is responsible for doing this task (what would otherwise be considered administrative) did so prematurely. And, what was posted to the SEC’s website contained a draft press release that said “Pending Larry quote” on top. Obviously, this was referring to CEO Larry Page.
What’s up with these behemoth of technology companies? (I am referring to Facebook whose investor relations practices I have been criticizing since before their IPO – and now Google.) What has happened to IR best practices?
While new technologies and best practices in IR communications are evolving (i.e. social media and mobile), there is something to say about traditional methods of communications such as the dissemination of press releases through newswire services. When a company issues a press release, investors are accustomed to going to their preferred source for financial information and looking for letters such as “PRN” signifying the internationally recognized newswire service, PR Newswire. Seeing these initials, one immediately knows that what follows is a press release issued and condoned by the company itself. And, these services have editorial desks responsible for working with the companies to ensure the accuracy of the news about to be disseminated and that dissemination and filing with the SEC happens correctly.
But, Google decided to go the non-traditional route by filing with the SEC and then posting its press release to its website. Maybe best practices will be back in favor following today’s mishap.