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False Google Story Triggers Massive Stock Sell Off
By Daya Baran at September 09, 2008 18 Comments
A massive sell-off in United Airlines (UAL) shares resulted after a false report about the company declaring bankruptcy appeared on Google.
Shares of UAL lost 75% of its value in seconds plummeting as low as $3 from $12.30 prior to the story appearing on Google. Some investors in UAL stock lost a ton of money. The stock hit an all time low on heavy volume.
The shares bounced back after the market realized it was a 6-year old story on the company’s 2002 bankruptcy filing that appeared on Google. The Nasdaq Stock Market, where UAL shares are listed, said trades triggered by the erroneous report wouldn’t be rescinded. Investors who sold on the news were stuck.
As UAL’s stock crumbled and the company saw the headline on Bloomberg, a UAL spokesman told the news service that the report was inaccurate. Trading was quickly halted — but not before some investors dumped shares for as little as $3 apiece.
The Tribune said that Google highlighted the story from Sentinel’s website archives over the weekend, which generated traffic and caused the newspaper’s computer to move the story to a page of most-viewed articles.
But Google said the only reason its search engine “crawler” bothered with the story was that it was listed on the Sentinel page of most-viewed stories. ”It was a new item that said, ‘Hey, look here,’ ” Google spokesman Gabriel Stricker said.
So what can you do if false information about you or your company appeared on Google? Is Google liable? Case in point, the search query miserable failure was linked to President Bush for two years. What if this was you, what recourse do you have? Who pays for damage caused to you? Tell us what you think.
18 Comments
Hi Daya, really interesting article. I have 2 comments if if I may: 1) I think this is truly indicative of the problem with trying to develop one solution to satisfy all; things invariably go wrong somewhere. Microsoft demonstrates this every time it sends an update or a patch and even that requires a critical mass for MS to dedicate the people to find a solution. 2) But really I would be more likely to consider groups like the Income Securities Advisors and Bloomberg who didn’t do more research before running with this story. They just had to do a search on Google to see find that the story originally came out in 2002!!!!!
would be interesting to see how people will rate this kind of article in the StockNewsGame.com community…
Hard to blame Google here. They are not the source/author of the news itself. They crawl news sources, and provide links to those sources stories. It’s the source of the news that must be accountable for their content. I see old news repackaged as new news every day on hundreds of sites. This case is only different because it was a public company and the news touched off a sell-off. If this had been a three year old story about racoons, nobody cares. This isn’t about Google. It’s about what can happen when sites looking for content get lazy and repackage old as new.
Using the “miserable failure” search to illustrate the problem of false data has no bearing on the issue in question. In the UAL story, there was an actual error which caused totally inaccurate information to reach the public. In the failure example, a public figure who is the legitimate target of negative commentatry was affected. In fact, most objective analysis would say that Bush has been a miserable failure.
This is kind of an idiotic article. Google does not publish anything. Google doesn’t have a content page ANYWHERE for this to “appear” on Google. If Google simply points search results to an article that is written with falsehoods or is deemed undesireable or whatever, it is a blatant lack of understanding just how search engines work to write that something “appeared on Google.”
Silly. I thought Webguild would have more seasoned writers?
Daya, come on, you know better than that! Google does not publish anything, they simply point you to results that correspond to your search term.
You know better, but you probably got a huge bump in your blog simply by putting “Google” in the title!
Wow, sounds to me like Google’s “hard problem”, as Marissa Mayer likes to call search, is made harder by trying to make algorithms that classify content as more important if it says “Hey, look here”.
That’s why I use Yahoo! search.
And to John’s comment, certainly the Bush presidency could be classified as a miserable failure, but that might be opinion rather than fact I’m afraid, but one that I believe in as well. But in 2002 it would appear that someone defined United Airlines as a miserable failure too. It’s a legitimate search result based on an opinion. The problem is that the Tribune posted it recently to their archives, and Google’s crawler reads it as recent, even though it might be 6 years old. I’m of the opinion that both the Tribune and Google are liable, Google can afford it, but it’s likely that any settlement for damages could end the Tribune.
@ Paul, Daya is simply reporting the incident. Clearly the story appear on Google. That is what triggered the sell off.
The problem was not Google but the fact that the source was unreliable. These are different times where everyone is an ‘expert’ and we all know what that means: mostly speculations without solid knowledge of the topic.
It’s always a struggle to find reliable sources in this world of blogs, rss, etc. And Google’s search is a mere aggregator of what’s out there…too bad that some people just live and die by it.
The decentralization of information is a much bigger topic triggered by, among the reasons, the useless (government) biased newspapers and TV stations.
Bloomberg carries Google feeds as other news sources. Professional traders rely on that info to make to make critical decisions. Bloomberg should not be carrying Google news.
Thank God no one got hurt. What if something bad had happened. What if this happened to you. You will all be saying it was Google’s fault. It is Google’s fault they should bear more responsibility. Time to break them up.
Make Google pay for their sins. They have become a dictator.
This shows that Google cannot be trusted as a reliable source. Hence why we need more competition. I switched to MSN and it is perfect.
To everyone scratching their head over this story: it makes sense once you understand the history. Google used to be a sponsor of WebGuild, but they aren’t anymore (see Daya’s story here: http://www.webguild.org/2008/04/shame-on-you-tim-oreilly.php). Ever since Google withdrew its support, WebGuild has turned into a steady stream of anti-Google hatchet jobs. I don’t know if these are just the immature tantrums of a jilted lover or some sort of ploy to get Google to pay protection money to stop the assault. Either way, it has become embarrassing to watch. WebGuild has lost credibility by continuing to grind this axe.
Google never paid WebGuild any money. We sponsored Searchnomics and we were committed to sponsoring their Web 2.0 conference when the O’Reilly farts stepped in. Google is full of these old O’Reilly farts channeling the funds into their conferences. We screwed up big with WebGuild now Google is partnering with all the mediocre organizations in the hopes that it will find another WebGuild. We even sponsor crap like techcrunch which has no value to Google or anyone for that matter. Google needs to be engaged with web savvy, young and forward thing organizations like WebGuild not old farts like O’Reilly.
@ Offpanel - I am hiding my identity because I need to work to feed my family. I don’t want Google penalizing me. Why are you hiding your identity? Are you from O’Reilly or Google?
Nope. I’m with neither Google nor O’Reilly (and in fact, I pretty much agree with you on the O’Reilly front). I don’t really have a dog in the Google/WebGuild snit. However, as a subscriber to the WebGuild newsletter, I don’t really remember any anti-Google stories back in the day when you guys were hosting WebGuild events. Conversely, there has been this continual stream of Google-bashing stories since Daya’s “Shame on You” piece. When a site’s agenda becomes this transparent, it causes one to doubt every piece of information it publishes. Perhaps Daya doesn’t realize just how petty and childish this comes across, and so, as a public service, I’m representing the readership and saying, “Daya, eat a pint of Ben and Jerry’s, have a good cry, and get over it. Google’s not worth it. See, even their own employees don’t stick up for them. Just move on and go back to reporting the tech news. No more smear campaigns. You’ll like yourself better.”
As for hiding my identity, do you think that “OffPanel” is less identifiable than “Paul” or “Grey J” or “Schmidt” or “Edu” or the majority of the other posters here? If so, then you, google employee, may call me “Edward.”
Read that O’Reilly bit too and I really enjoy Webguild, but you can’t get ahead while you’re trying to get even.
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