NetApp Financial Release Debacle Offers Lesson in Protecting Online News

I’m sure it was an honest mistake, and it was one done in an effort to allow the company to be fully prepared for the ensuing onslaught of media queries, commentary and trading that was to come. But the  recent debacle that saw NetApp’s quarterly earnings results slip out earlier than expected offered a timely lesson to all PR pros, whether you’re representing a consumer-focused client or working in-house in the highly-regulated field of financial PR:

Watch what you put online.

Clichéd? Yes. But as this example clearly showed, clichés often exist and perpetuate for a good reason.

Because even when uploading and posting content onto a supposedly secure corporate website,intending to make the content public at a specific time, things can go haywire, or a savvy reporter, can find that news far more easily now than ever before.

For those who aren’t quite up to speed on this story, a quick read of this Wall Street Journal article offers a good overview of the facts. Essentially, Bloomberg News discovered at 3 p.m. EST Nov. 17 (one hour before the close of trading) the Web address where NetApp’s quarterly earnings release was housed. This Web address was to go live just after 4 p.m. EST, but once Bloomberg News flashed out fiscal second-quarter numbers and guidance from NetApp an hour before anyone at the company was ready for that announcement, all hell broke loose in the market, and NetApp shares were halted for about an hour, as reported.

In other words, NetApp thought it was doing everything it could to prepare itself for the sudden crush of media and market attention once its second-quarter results were officially filed with the SEC and had been made public. What it got, instead, was an embarrassing instance of not realizing the Web savviness of today’s media and the public, as well as a lesson in properly protecting a company’s online content.

This situation also reminded me of the desperate need within the PR profession for data-savvy professionals. As PR pros, we may fancy ourselves as Web-savvy professionals who are on the cutting-edge of social media and digital communications. But are we taking the time to learn the back-end intricacies of the Web that are vital to understanding how people find and access online information and news?

I’m not so sure. And that’s a big problem, especially for an industry that prides itself on protecting its clients’ best interests and reputations when it comes to the disclosure and dissemination of information.

Think of it this way: What if this was an announcement from your company that you had uploaded to your corporate site about a big merger that was supposed to be timed to go live on your site exactly when the other company’s announcement was released? And suppose your announcement gets found an hour early — via perfectly legal means (as in the case of Bloomberg News finding the NetApp earnings release early) — by a savvy competitor.

Now, you’ve got a big problem on your hands.

In PR, we’re only as valuable as our level of counsel and the trust others — our employers, clients, the public, customers, etc. — have in us to protect their best interests. Accidents or simple mistakes aside, it’s our responsibility to ensure incidents like this never happen.

We’re in for a wild ride in the decade ahead.

(Note: By no means do I consider myself an expert in financial communications/PR. The thoughts and opinions expressed above are mine and mine alone.)

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  • Anonymous

    Keith I like the example of dotting the “i”s and crossing the “t”s but also wonder if this is more of a cry for better alignment between PR and IR teams. Many financial releases, although they may read press release at the head, are actually the product of the IR teams.

    Sure PR has a hand in the media outreach and editing of the release but the distribution is often done by a separate team or, in some instances, another wire service/hosting company.

    While it is a cautionary tale it also shows a stronger need for corporate communications and how things can’t slip through the cracks.

    • Great point, Jeff. I definitely agree with you that if anything, this example demonstrates a couple of pressing points many of us in the business have been making for some time:

      1. There is still a vital and very important need for a strong, well-resourced and competent corporate comms team at all levels of an organization. I’m not saying this isn’t the case for NetApp, but as you point out, greater integration and alignment between PR, corp comms and IR within organizations would help to alleviate these types of issues.

      2. Integration. Integration. Integration. As the PR/comms world continues to evolve and adapt in the digital age, we are going to have to be far more aware of how other similar departments within our organization are operating.