ONLINE REPUTATION

"A lie can travel halfway around the world while the truth is still putting on its shoes" (quote is commonly attributed to Mark Twain). According to The New York Times (October 13, 2008), today the saying might read as: "False reports manage to gain great purchase across the globe while the truth is still logging on." Examples of the speed of online impacting company reputation (or "reputational short-selling," coined in The New York Times article) include:

• Apple stock falling as much as 5% after a CNN-sponsored citizen-journalism site, ireport.com, published a false item from a user reporting that CEO Steve Jobs has been rushed to a hospital.
• Apple stock experiencing a $4.50-per-share drop and a $4 billion loss in market capitalization in just 6 minutes when the popular blog Engadget published a leaked, but fake, internal email from Apple Inc. that claimed the release of the iPhone and the company's Leopard server project would be delayed.
• United Airlines parent, UAL, losing more than $1 billion in market capitalization when traders treated an outdated bankruptcy announcement as a new development.

According to a paper published by ORMA (Online Reputation Management Association), the Internet is full of reputational vulnerabilities. Consider...

• 35% of hiring managers use Google to do online background checks on job candidates
• 16 million Americans consider the Internet a crucial tool in making investment and business decisions
• 47% of Internet users have searched online for information about themselves or their companies, yet just 3% of that group monitor their online presence with any regularity or careful thought.

"Google is not a search engine. It's a reputation management system. Online your rep is quantifiable, findable and totally unavoidable." -- Wired magazine, April 2007

"Social media's real power lies in its ability to function as a recommendation engine in which real people praise or pillory products." -- SearchInsider, August 11, 2008

Research conducted by IT security and control firm Sophos revealed that 70% of businesses are concerned about sensitive material falling into the wrong hands as a result of data leakage via email. A further 50% of employees admit to having accidentally sent an embarrassing or sensitive email to the wrong person from the workplace. Sophos experts note that email leakage can potentially cause corporate embarrassment, compliance breaches and the loss of business critical information.

"A business's reputation will be based on an almost infinite amount of information sources. The Internet is a huge database of unstructured information. So when opinions start to butt up against each other, you get a bad-news petri dish. -- Toby Bell, Gartner Inc.