Ryan Block has formally responded to what is now being referred to as “AppleGate” in Silicon Valley. Yesterday Engadget posted that the iPhone was going to be delayed several months, relying on what turned out to be a bogus email for the story. Four billion dollars in market cap was wiped off of Apple’s stock price in six minutes as the “news” hit the market. Engadget quickly corrected the story and the stock recovered within twenty minutes, but many investors had lost a staggering amount of money in the amount of time it takes to brush your teeth.
I have to say that I, too, would have posted this news based on the source. The email was in fact sent from Apple’s email server to Apple employees and was then forwarded to Engadget from a trusted source. Ryan says “For a reporter, this kind of thing — an internal memo to a company’s employees — is solid gold” and I agree. This was almost as good as a formally issued press release. Block says he contacted Apple PR and received no immediate response (it took Apple two hours to deal with the situation). That, too, is standard practice. When stories are breaking, internal PR is the least useful source of information. The fact that they didn’t respond looked more like a confirmation of the news than a red flag that the story was bogus. Apple made two critical mistakes - allowing their internal email system to be hacked, and then not responding immediately to Engadget to tell them the story was incorrect.
Whether Engadget screwed up or not will be debated endlessly by the blogosphere, and some mainstream media will pick up the story to gleefully report the inadequacies of fact checking procedures at blogs. The next time Engadget breaks a rumor people will speculate on their credibility, and it will be a long time before they fully recover from this.
But the fact is that big blogs now have an incredible amount of power to move information quickly, and influence people more broadly than ever before. I’m not sure we (bloggers) understood quite how much influence we really had until yesterday. “AppleGate” will become an important historical footnote for the development of blogs and the evolution of the news and editorial business more generally. With power comes responsibility. And I think Engadget handled the situation with an appropriate degree of professionalism.
If Apple were in fact targetted and Engadget were suckered into taking part in a calculated sting I’d expect the professional industry bloggers to be more worried about the potential fallout from this than Apple .
I just don’t get it. The fake mail specifically talks about an already issued press release. Well, if several hours pass before the mail is first relayed and there is still no public press release… then guess what?
Apple Gate –
- Please someone explain the “Gate” in all the names … waterGate etc…
In the media world, Engadget - high traffic or not - is still considered a blog.
In the PR world, it’s the PR team/firm’s job to get back to reporters. When I used to write for the Today show, it would take WEEKS for Target to get back to me. I don’t think any PR department is so busy it can’t get back to people. It’s all about priority.
@pallet jack,
The infamous Watergate reference originated from the Watergate Hotel, where the break-in by Nixon people occurred.
http://en.wikipedia.org/wiki/Watergate
Tony
for pallet jack: http://en.wikipedia.org/wiki/L.....%22_suffix
It was irresponsible of Engadget. Ryan’s explanation doesn’t make sense. He mentioned that even after he found out, less than two hours later, that the email was bogus he didn’t edit his post. Why?
Some people mentioned that not much was lost. I’m long on Apple so it didn’t matter much to me. But, did you see the exchange volume? That’s a huge exchange of money there.
what’s $4B, really, in the big scheme of things?
It’s time to ENDGadget, b/c Endgadget sucks. Economic terrorists is all they are.
Happy Friday!
i guess it’s true what they say - the most edumacated people are the most indoctrinated. sheeple. no critical analysis.
and endgadget’s excuse is hilarious - this was a ‘big’ and ‘urgent’ story, dontcha know?
those are the true determinants of whether a story should run or not on Endgadget.com, right? the bigger and more urgent, the faster they publish it. seems like a sure-fire way to guarantee themselves some face time with a judge.
i mean, what would the tech world have done if they actually had to wait, say, another hour or two, for news that the Apple iPhone would be delayed for several months. how would people manage to go on with their daily routines, really, without this critical piece of information? two hours is a _long_ time. in two hours, do you know how many of your friends you could tell that the iPhone was going to be delayed, and therefore you’d have to wait several more months until you could spend entire days doing nothing productive at all?
and the blame rests with Apple, of course. who do they think they are by not responding to a rumour within two hours, outside business hours? don’t they know that they have to respond to _every_ ridiculous rumour that _every_ ridiculous blog can conjure up - all within two hours - preferably much faster? where did Apple get its PR people, anyways? they’re horrible. purely incompetent. fire them all, i say.
the reason EndGadget published this rumor was because they could - they could do it, make heaps of money, and there would be very little if any outfall b/c their readers are uncritical - they just accept as gospel any nonsense they hear.
someone should lose their job over this - preferably the editor who decided to run with this rumor - which has not only destroyed the credibility of Endgadget and other tech blogs, but put a significant dent in the credibility of the blogosphere as a whole.
and please don’t compare the blogosphere to the mainstream media - yet. we’ve a long way to go before the internets are run by the publish-whatever-rumors-you-want-and-let-dead-civilians-and-soldiers-sort-it-out people.
the faster EndGadget goes under, the better off we’ll all be. it’s time for the free market to sort this out - any good libertarian would support such an outcome.
I thought Ryan’s comments / response were a bit too defensive. Hindsight is 20-20, but in the business they are in its clear that you need to have better foresight when it comes to public companies and stock altering news. Did you see what happened when Jobs was on stage and announced the iPhone? The stock increased 10% and has continued to rise based on that news alone. It obvious investors are very concerned / interested in the iPhone. I don’t think we’ve heard the last of this situation by far. I predict another follow up post from either Ryan or Peter.
What I think is more interesting is the lesson that Apple (and all of us) learned about the fragility of the stock. No wonder they are so secretive about the product pipeline. I’m an investor, long, so this whole thing is of great interest.
Agree witth #59 - Peter. I read TechCrunch for the topics and analysis - not how fast they break news. There are lots of ways to deliver valuable news.
““I’m not sure we (bloggers) understood quite how much influence we really had until yesterday…”
You must not invest or trade in the market.
You don’t really think a Money Manager saw a posting on a blog and sold millions of AAPL on a whim do you?
This was done to help bring the stock to the $108 rage, and what do you know.. someone stood to lose MILLIONS that day… the calls @ $108 where about to expire.
Whomever is behind this needs to be brought to justice, fined and jailed a long LONG time.
A crime was committed in front of thousands.
“But the fact is that big blogs now have an incredible amount of power to move information quickly, and influence people more broadly than ever before”
And with power comes responsibility. If “old media” had of made this huge mistake all the self-righteous bloggers would have been all over them. But when the shoe is on the other foot you don’t lay in to people just as much.
So what if the source was reliable before? You don’t just get their side of things. Engadget should have waited to hear back from Apple. Plain and simple. If the original source was duped, and subsequently Engadget was duped, then Apple may have just cleared this up. If someone says, “Oh Mike Arrington this and that.” Am I just going to post what this someone said without hearing from you first? If I do then it’s irresponsible to not give you a right of reply. It’s that simple. I think that old media is laughing right now.
Mike, out of curiosity, why does this post say “67 comments” and there’s only 63 listed?
I am long AAPL and I did not know about the rumor until the market was closed. And, I am happy about that. I did see the stock get weak during the day and then recover, but I did nothing since I am long term. I don’t have any stop losses in place, since I know that high tech stocks are volatile and can hit it and then recover, and you would be sold out. Maybe, it is a lesson learned for the people that put too much trust in what they read on these internet sites and on the yahoo stock boards.
You only lost money that day, if you sold blindly. You are still the one controlling your buy and sell orders.