Companies Using Blogs to get messaging across

Monday, 12 January 2009

Long the home for mavericks, conspiracy theorists and self-obsessed ranters, the blogosphere looks set to become the first port of call for investors.

Christopher Cox, the Securities and Exchange Commission chairman, has said he is intrigued by the idea of letting companies use blogs to disseminate important corporate information. Mr Cox's thoughts were posted in a comment on the blog of Johnathan Schwartz, chief executive of Sun Microsystems, who argued that the SEC should pay greater heed to the internet as a way of increasing access to corporate information.

He has invited Mr Schwartz to explain his thoughts to the SEC in more depth, as the commission debates the future of a 2000 rule known as Regulation FD, for Fair Disclosure.

That forbids companies from providing significant information to stock analysts and other Wall Street insiders ahead of the public and requires information to be disseminated in a way "reasonably designed to provide broad, non-exclusionary distribution of the information to the public".

Mr Cox said: "Since Regulation FD was adopted in 2000, significant advances in information and telecommunications technology have occurred that have dramatically increased internet use by businesses, consumers, investors, and government agencies. These advances have transformed the internet into a primary means for the rapid dissemination and retrieval of information."

However, he said the rules offered one possible obstacle to blogging as a means to educating shareholders.

"Among the questions that would need to be addressed is whether there exist effective means to guarantee that a corporation uses its website in ways that assure broad non-exclusionary access," Mr Cox said, suggesting that corporate sites that require user registration, passwords and log-ons would not pass the test. In his initial letter to the SEC, Mr Schwartz said that Sun's website, which gets an average of nearly a million hits a day, is "a tremendous vehicle for the broad delivery of timely and robust information about the company".