Yesterday, Sun Microsystems reported their financial results for 2007.
A routine communication activity for a publicly-listed company, with a press release, earnings call and presentation for the financial community, employee communication, interviews with journalists, conversations with shareholders, etc.
Most definitely not routine was the way they did it by making their public announcements on their website and via RSS feeds before any other public communication – before the press release, before the earnings call, before anything else.
The financial results were posted in Sun’s investor relations website and available via RSS feed ten minutes before the press release went out via traditional communication channels.
Sun’s desire to break through the traditional regulatory barriers that have prevented listed companies from using the web as a primary channel for financial communication has been clear for some time.
Last October, Sun’s CEO Jonathan Schwartz kicked off a public discussion with the SEC through a post on his blog in which he called for changes to Regulation Fair Disclosure (otherwise known as Reg FD).
Leading up to yesterday’s breakthrough in financial communication, Schwartz wrote that the upcoming financial results announcement would represent “a small, but exceptionally symbolic change”:
[…] Referencing a dialog we’ve established with the United States Securities and Exchange Commission, and its Chairman Cox, this will place, for the first time, the general investing public – those with a web browser or a cell phone – on the same footing as those with access to private subscription services. In effect, driving an open dialog directly with investors, rather than routing information through proprietary sources. Open is as open does.
I believe this change will increase the transparency of our business, fulfill our desire to disseminate information on a fair and equitable basis, and allow the network to be used for what it’s intended – connecting people and information.
[…] It may not seem like it, but this is a sea change in how Sun communicates with the world – and sets a path for other public companies seeking to drive greater transparency. I wonder how far off we are from ceasing to issue traditional press releases altogether… after all, no news agency could possibly suggest they reach a greater portion of the planet than the internet.
Sun has lowered the bar for other public companies subject to SEC regulation and oversight to follow the trail Sun is blazing.
Look at what’s possible, not what isn’t.
(Related: Shel and I discussed Sun’s financial communication in yesterday’s FIR #262. Our discussion starts at about the 27-minute mark.)
4 responses to “Sun Microsystems lowers the bar on financial communication”
A excellent article Neville,
You pose the question; ‘I wonder how far off we are from ceasing to issue traditional press releases altogether.’ I would say very far…….
I run a small PR agency in Manchester City Centre, although we have some sizable clients who are Sunday Times Fast Track 100, a private equity company and a 6 star rated University Business School – the thought of moving over to RSS distribution for our clients communications would really be a big problem at this stage.
The trickle down effect from large corporations such as ‘Sun’ to SME’s and the way they handle communications is taking some time, it really is a trickle. In my experience most people have still not heard of RSS, those that have aren’t using it – this despite its prominence on such sites ads the BBC.
I agree that the writing is on the wall for the traditional press release, however its probably going to stay on the wall for some time yet!
There is still a lot of work to do, Nathan, in educating our colleagues and our clients. RSS is a great topic to illustrate to clients how much of a productivity tool it is.
One way I do that is to show people how much time they themselves can save by aggregating their favourite content all in one place, they get it automatically, etc. That often produces the “light bulb moment.”
I don’t think the traditional press release will go away. I do believe it will evolve, though, and maybe the social media press release is one of the evolutionary paths.
Hi Neville,
I think it’s important for anyone who might be considering this approach to know that this paragraph in your post is not accurate:
The information was first made public on EDGAR, the SEC’s public disclosure database, and immediately thereafter was distributed via live feed to a variety of intermediaries, including one that posted the news to sites like Yahoo! Finance before Sun released the information on its website or in its RSS feeds.
If Sun hadn’t done this, it might have been on the wrong site of Regulation FD. Only after Sun filed on EDGAR did it add the information to its website. And to be honest, they didn’t execute that part very well.
Nonetheless, the process Sun followed demonstrated that the Web works for disclosure and that PR wire services are not required to ensure fair disclosure. Other companies should seriously consider Sun’s method, possibly with some improvements.
I’ve written extensively about the events and the implications on my blog if you’re interested. There quite a bit of controversy over this, especially from one of the main PR wires.
Thanks for that clarification, Dominic, much appreciated.
I did read your posts and I’m not surprised at all re the outcry from newswires. I agree: pending end of a gravy train.
Not sure I agree with you that Sun didn’t execute their website communication well. From what I saw, it was a great effort, demonstrating indeed that the web is a credible communication channel for regulated financial disclosure.
Perhaps some other things they could have done as well. For instance, I would have liked to have seen a social media press release.
If not Sun, someone will do that sooner or later.