The Power Of The Press Release: For Better Or For Worse...Much Worse.

MARK: A couple of months ago, we talked about the power of the press--

HAL: I think it was the power of the press release!

MARK: Right. I used to work in public relations and I must have written hundreds of press releases, but I don't think I ever appreciated how press releases inundate reporters and editors--not until I crossed the street and started working as a reporter and editor myself.

HAL: I've never worked in PR, but I'm glad to hear that your eyes are open. What happened?

MARK: During my last editorial tour of storage vendors' headquarters, I came to realize a couple of things. First, press releases aren't necessarily "news"

HAL: That's not news! Every time somebody gets a minor promotion or the company adds a distributor, the news release is as big as it would be for an acquisition or a breakthrough in technology.

MARK: Apparently, some high-tech companies use press releases not only to inform the trade press but also to impress Wall Street analysts and business reporters and--through them--to impress investors who have no other way to get news because they don't read the trade press.

HAL: That's why editors sometimes roll their eyes when they see an envelope that says "Important News Inside."

MARK: It's also why every news release from a publicly-traded company has a paragraph at the end saying that the news contains "forward-looking" statements and that the reader shouldn't necessarily take them at face value.

HAL: Of course, we editors are to blame if we don't either include that paragraph or put our own version of the disclaimer into the story, like attributing quotes to the source. That's why Computer Technology Review adds parenthetical explanations like: "The company claimed," "The president hoped," "according to the spec sheet," and so on.

MARK: Labeled that way, it's clearly our insertion. Most trade press editors understand what's news and what's hype, but what's printed as "information" in the trade press might be "dis-information" in the general press or in a financial analyst's report.

HAL: Maybe you better explain that.

MARK: I'll have to give you a hypothetical. Suppose a company approaches a potential partner and both of them are publicly held. Their executives decide to announce a joint venture. So they draft an announcement arid disseminate it as a press release. Whether the deal ever actually comes off as announced doesn't matter. What's important is that Wall Street takes notice, investors are impressed, and the stock price of one or both companies rises. So both companies make money without actually doing anything except talking. No technical assets have to change hands or be shared.

HAL: This has a parallel, of course, in the entire "dot-com" phenomenon, where the only thing that some companies are able to sell at a profit is their stock certificates.

MARK: I long for the good old days when people had to work for a living.

HAL: You said you learned more than just that on your last tour. What was it?

MARK: I visited several companies, but when I asked to meet their top executives, I learned that those people were on the road. Apparently, they were in meetings with prospective investors or with prospective OEM partners. The PR and product managers at these companies insisted that business was not merely "good," it was "healthy" or "robust," or some other superlative, but if that were true and the company were really doing well, why weren't those executives at their desks managing things? Why were they out hustling up new business or fresh capital?

HAL: They may feel that, if things are going well, they can start looking to the future.

MARK: If I were in their shoes, I'd make sure that the present was really working before I'd head out to infinity and beyond.

HAL: Let's see what our readers would do. If you think planning and developing new business trumps day-to-day decision-making, email me at [e-mail].

MARK: Yet if you think building a strong foundation at home comes before everything else, email me at [e-mail].

Editor's Note: This discussion between Hal and Mark took place before Emulex Corporation was impacted with a false news release that adversely affected its share value. The coincidence is just that; it is only sad that the point was illustrated so sharply and to the cost of so many.