Welcome to the machine

Andrew Flynn

The Internet has turned the common business journalist into a kind information commando — the pressure to seek, obtain and quickly disseminate news demands a nimble expert who must adapt to a rapidly changeable environment and, with minimal resources, beat the competition to get it online.

If that’s true for all of newsgathering in the Internet age, it goes double for business journalism and quadruple for coverage of stock markets. Readers have changed, the markets have changed and there is no mercy when it comes to covering money.

Newspapers might as well have already lumbered off into the prehistoric mists as far as the new business consumer is concerned. By the time a story that affects a company’s stock has hit the sidewalk in a morning edition, another day’s trading has already begun and the landscape has already shifted.

The best-connected have the information they need within minutes, if not seconds, of its initial release — often from the source. Stockbrokers and other traders are so dialed-in to corporate developments through Thomson and Bloomberg terminals that they’ve long dispatched older, slower technologies to the dustbin. They certainly don’t need a newspaper or CNN to fill them in on the day’s business news.

To make matters worse, anyone with a keen interest in a business story now has virtually the same access to many primary sources as the average business reporter.
Twenty-five years ago, it would have been difficult to imagine news outlets going head-to-head with press release services, but that’s what’s going on, especially with the landslide of corporate disclosure that sprang from the accounting implosions of companies like Enron and Tyco.
New, stricter accounting standards demand more disclosure, and many companies, leery of falling afoul of either jittery investors or scowling securities enforcement officials, leap to publicize even the most trivial of corporate developments.

That disclosure is disseminated publicly via news release services like Marketwire, CNW and Businesswire — regulators demand that corporate news be made widely available and these are the conduits, which is pretty handy for business reporters since they bundle the deluge into streams that can be monitored relatively easily.

It must be noted, though, that some bigger companies, such as Sun Microsystems, have mused recently that they might just be able to achieve adequate disclosure by releasing corporate news online via their own transmission channels, bypassing the bulk distributors.
And here’s where the new business journalist earns his or her stripes. In that mountain of disclosure lie nuggets of gold, facts that can change perceptions about a company and affect its fate — who wouldn’t dump stock in a company that revealed on page three of a 3,000-word document that the walls of their gold mine collapsed? The challenge is to find the nuggets, accurately explain their impact in simple terms and publish first, updating on the fly with an accurate detailed explanation of what’s important and why. Be the first to do that, do it consistently and do it comprehensively, and you win the battle.

And it is a war. The Internet has leveled the playing field for all combatants — newspaper, wire service and broadcaster alike. Great aggregators like Google have ensured that the audience will find your news, as long as it is published for the wider online community to find. If it’s out there, if it’s informative and tells the story thoroughly and nobody else has caught up yet, yours is what the reader will find. And they will come back to you looking for more.

In this war, beating the traditional competition just gets you landed on the beachhead.
Until the advent of the Internet, detailed market and economic information was available to a select few — brokers and banks and high-powered investors. Reporters quickly learned how they too could access this information and made themselves useful translating it for the average investor.

Now, not only are the data available in real time, they’re available to anyone with an Internet connection. Business reporters compete not only with the disclosure services that disseminate corporate information, but also with the source information itself. If you’re an investor, even an ordinary retail trader with an online brokerage account, why would you need to visit a newspaper — or even its website — to find coverage of, say, Google’s stock? If you want to know what’s happening on any given day, use the company’s own products to provide you with the latest news.

Here’s how: just visit Google Finance at http://finance.google.com/finance and input Google’s Nasdaq symbol, GOOG. On one page you now have a scalable one-year stock chart, detailed financial performance metrics, archived press releases, corporate information and financials, a list of similar companies with hyperlinks to their Google Finance, a discussion forum, blogs on the company, links to news coverage, analysis and more.

That’s a massive amount of information made public, all contained in one humble Web page — far more information than you could cram into an entire newspaper, let alone one story.

It’s all the average investor really needs to make a decision whether to buy or sell Google shares.

And if that doesn’t put enough pressure on the business journalist in the quest to stay relevant, all of that information is available to anyone with a BlackBerry or Web-enabled cell phone, just about anywhere, anytime.

Is that bad news for the profession of business reporting? Hardly. It might be if there were only a handful of companies in the world. The average reader doesn’t have time to individually research each and every stock, digest every economic report released by every government, day after day. The task of reporting on business may have become more challenging, but it hasn’t lost relevance. If anything, it’s more necessary than ever.

Stock markets are sensitive entities, and they’re bigger and more sophisticated than ever before. They react quickly to corporate developments and to changes in fundamentals such as currency trading and economic news. Traders don’t cram market floors shouting bids to one another at most of the world’s biggest markets any more, the real nuts and bolts work is done over computer networks. Sometimes humans are barely involved in the process, replaced by mathematical algorithms designed to squeeze out maximum gains as fast as electrons can carry them.

The new business landscape is more than just complicated — it’s mind-boggling. The New York Stock Exchange and its Arca electronic trading platform are home to more than 2,800 traded stock with a combined value well above $25 trillion. The Toronto Stock Exchange has more than 1,500 listed companies with a combined value of about $1.9 trillion. They’re just two of the dozens of exchanges around the world, many of which cross-list equities from one to the next. Hoary old stocks and bonds are still big players, but there are also thousands of new maverick investment structures from mutual funds to complex derivatives. Some of the most obscure, arcane and generally uninteresting investments can turn out to be rather important — who but the extremely initiated would have known a year ago that asset-backed commercial paper, heretofore ho-hum and staid, would sit on the tip of the subprime mortgage meltdown? In fact, who had heard of them?

Business reporters ferret through the murk and mire to hopefully translate this chaotic, brutally changeable cosmos into meaningful prose. Sure, there’s more competition than ever before, from within the craft and without, but the resources at our fingertips — also thanks in large part to the Internet — give us the tools to get at the information we know will count.

Maybe the commando metaphor is a bit overly romantic (finding the hidden write-down in a quarterly report isn’t exactly rappelling from a helicopter), but the successful business journalist needs to at least have some of the mentality of an SAS strike team — identify the target, deal with it efficiently and accurately, get out quickly and move on to the next. That’s what the competitive landscape demands. The value of telling a business story as fully and insightfully as possible hasn’t diminished — but if you can’t find a way to do it as fast as possible, you will be left behind.

Andrew Flynn is Assistant Business Editor at The Canadian Press in Toronto.