I’ll be brief. Time is precious, after all, which is why everything moves so fast in the digital age. Why we moved from snail mail to e-mail to instant messaging. Instant. The word itself conveys an adrenalized fervor. But maybe it’s time to give an old aphorism new meaning: speed kills.
We all know what can happen when the e-commerce world starts spinning a little too fast. Dot-coms that launched marketing campaigns before their Web sites were finished or their products were even ready for sale know. (Did someone say “shakeout”?)
Investors who sank money into the next big thing before its business plan was back from the printer know. They bought themselves a first-class cabin only to see their cash go down with the ship.
Now, thanks to a single incident, everyone involved in any aspect of the online game has a stark reminder of just how dangerous it can be when technology outpaces common sense.
One Very Bad Day
The “Emulex Hoax,” as it’s now being called in journalistic shorthand, began last Friday morning when Internet Wire received what was supposedly a press release from a public relations firm. The release carried a rare trifecta of bad business news: resignation of the company’s CEO, a restatement of past earnings, and a sketchy reference to a U.S. Securities and Exchange Commission (SEC) investigation.
Internet Wire promptly posted the release and it wasn’t long before reporters and editors at financial news services around the world spotted the name “Emulex” — which belongs to a high profile, high-tech company with a $3.7 billion (US$) market cap — smelled a story, and began to slam out hasty rewrites.
On the Internet, speed is king. Investors want to be the first to receive news and they’ll take it from the outlet that gets it to them fastest. So the Emulex rewrites buzzed across the wires, with nary a phone call or an e-mail to check out the company’s side of the story.
The result was a breathtakingly steep drop in the Emulex stock price. The chart for the day looks like the monitor readout on a patient whose heart suddenly gave out. The company lost more than half of its market value in a matter of minutes.
The hoax was soon discovered, and the stock price rebounded. But that doesn’t mean all is well. In fact, even the arrest of a 23-year-old student who made himself a cool quarter million dollars by shorting Emulex shares is not the end of this story.
A Time Out
Now is a good time to ask an important question that applies to the e-commerce world as well as the world of online news and information: Just because we have the ability to move at the speed of light, should we?
This isn’t a call for a slower, simpler life. The dog days of summer are about to give way to an all-out sprint toward the holiday season, which may be the greatest test yet for e-commerce in its various forms. There are going to be a lot of sleep-deprived people working the Web in the coming months.
That’s as it should be. But the technology we’ve come to rely upon can be either a blessing or a curse. If crucial decisions must be made at the same speed that information can travel — such decisions as whether to invest in a business, or whether to run a potentially damaging story — then we fallible humans, with our modicum of experience in the conduct of online affairs, are doomed to make some fatal mistakes.
Technology should be an ally in the fight to make solid decisions. It should buy us time to think things out. Time to check out a news report with a phone call or an e-mail, time to measure the response to a competitor’s latest marketing scheme or strategic partnership.
Information may travel in real-time, but good decisions are made by people who take time to reflect.
Does the competitor’s move demand a counteraction or would it be ill-advised to adopt a similar strategy just to keep pace? Is a restatement of earnings for Company Z reason to sell, or is it possible to ride this bump out?
Answering questions that have complex ramifications takes time — more than it takes to click on the “sell” button or to seal a deal with a phone call. Speed kills. Taking the time to get it right could mean the difference between survival and oblivion.