Really simple syndication (RSS) may sound like a fast way to put a bunch of capitalists together in a deal, but it actually falls in the category of communications tools – one that a handful of IR web sites are already using and one that has a lot more horsepower than many realize.
To date, RSS remains underutilized and misunderstood in most IR offices. This situation looks set to change, however, as Microsoft takes action to make sure we all get to know about RSS – more on that later.
An RSS feed skips the clutter of e-mail while still giving investors direct, timely new information from your company without the need for them to visit your web site and search for news.
In the simplest application of RSS, the IRO chooses what stream of information goes into the feed – regular events announcements, financial press releases or even executive blogs – and anyone can then subscribe to it. It’s a good alternative to an e-mail alert because it doesn’t clog up inboxes.
The IR vendor community has latched firmly onto RSS. ‘About 35 percent of our IR or PR web hosting clients offer RSS,’ says Kelly McPartland, director of web hosting at Thomson Financial. Her firm and other vendors such as Shareholder.com, SNL Financial and B2I Technologies offer RSS as part of their IR web package for corporate clients.
As McPartland notes, a number of companies direct only their press releases to the feed. Considering that serious company followers usually get press releases through other means – Reuters Knowledge, for example – this is a poor use of RSS. The feed could also include other regular communications with investors, such as conference call alerts, business sector updates, PowerPoint shows or blogs. IBM, probably the leader in applying RSS to investor relations, provides a series of articles specially catering to investors in a feed called IBM Viewpoint.
Blogs from the top
As for executive blogs available via RSS, one of the most talked about is by Sun Microsystems’ new president, Jonathan Schwartz, who is aware of the legal minefield involved. In an August entry entitled ‘Doesn’t this drive your lawyer nuts?’, his reply was ‘no.’ In fact, he said, Sun’s corporate counsel just started his own blog. Moreover, citing Reg FD as possibly prohibiting what he communicates about through the blog, Schwartz claims to be so passionate about such direct contact with investors that he plans to take the issue directly to the SEC’s chairman, Chris Cox.
Interestingly, of 13 RSS feeds listed on Sun’s web site, none is devoted to IR. When queried, Sun’s IR director, Bret Schaefer, says he was not aware of how RSS might be used in investor communications. Apprised of its function, he says: ‘This is a great tool, with Reg FD implications,’ noting the company’s focus on compliance with Reg FD. Schaefer says he will look more closely at using RSS.
Slow take-up
When it surveyed investors and analysts earlier this year, Thomson found that only about 7 percent used RSS. On the other hand, 45 percent of analysts said they would like to see RSS feeds of company information, including presentations and financial reports. McPartland also cites a recent survey by Nooked.com which found that among ‘key influencers’, comprising analysts, journalists and others, 87 percent now use RSS feeds and 92 percent are aware of them.
This doesn’t surprise Troy Ussery, a former Lehman Brothers securities analyst and ex-IRO who now runs B2I Technologies, which has over 170 corporate clients. ‘We sat down in 1999 to spec out our product,’ he says. ‘RSS was an element even back then, before most of the internet community had heard of it.’
At B2I, RSS is integral to what the company thinks of as a two-way portal for IR professionals: IROs control information outflow while getting information about how users are accessing information and what they think of it.
On the user side of the picture, the fact that RSS readers are already included in the internet browser Mozilla Firefox means the mechanism to receive feeds is easily available. Microsoft plans to put RSS into the next version of Internet Explorer.
One of Microsoft’s top developers, Shanen Boettcher, said in a July 28 meeting with financial analysts that RSS is redefining the internet experience in much the same way as digital video recorders are redefining television. ‘It’s bringing information that is most relevant to you directly to you,’ Boettcher said. He hinted that Explorer with RSS will have hooks that allow other applications to use the feeds directly. One example would allow analysts to take the information provided by RSS and funnel it directly into PowerPoint or a spreadsheet.
Watch and learn
Beyond using basic RSS readers, high-octane buy-side users know a few more tricks. One that gets some attention from stock followers is a so-called watch service. Online services such as Pubsub and Technorati scan RSS feeds and other sources and let you know whether a company or topic of interest you follow is mentioned, or you can set up a constant search that is tailored to your interest. The feed will offer to maintain your search term and will thereafter funnel any relevant news item directly to your feed reader.
Apart from the built-in reader in Firefox and the soon-to-come Explorer version, feed readers come as downloadable software packages, many of which are free. The top names include Feedreader, RSSReader and FeedDemon. Others are web-based and require no downloads, like Bloglines, NewsGator and a facility available through My Yahoo!.
For now, seeking value in the RSS world can be a real mountain trek. As with many search facilities, what you think you will get is not always what turns up. Providers of the content are looking out for their own interests, not necessarily yours.
Thus, if you search Technorati using the term ‘investor relations’, looking for corporate RSS feeds, you will have a tough time working your way through the resulting offerings. They are dominated by vendors who work to ensure they are seen first. PR and IR support companies have quickly learned it is simple to ‘game’ the system by writing blogs that will be captured by Technorati’s sweeps of the net.
Microsoft has already put Explorer 11 into the hands of experts in a beta test program, so in a few months, if all goes as expected, you won’t have to worry about such problems.RSS will be part of everyone’s surfing experience and may emerge as one of the most powerful internet tools yet.
