Google Changing Investor Reporting

Google's announcement last week that it is revamping some of its investor-relations processes may well open the way for other companies to streamline their own.A key feature of the revamp: Google will no longer distribute financial news through newswire services, such as Business Wire and PR Newswire, but instead will post it solely on its own investor-relations Website. "We felt it made a lot of sense, given that we're a technology company and that we announce virtually all of our company news on our blogs," says Google spokesperson Jane Penner.

While this type of change has been legally permissible since August 2008, when the Securities and Exchange Commission (in an update to Regulation FD guidance) approved company Websites as acceptable disclosure vehicles under certain circumstances, few companies have made the switch. Reis, a real estate data firm, and online travel company Expedia are among those that have done so, according to the blog IR Web Report.

Now, though, more companies are likely to at least consider releasing financial news via Website only. "This is another example of where Google is on the leading edge of the marketplace, and I think you're going to see more companies adopt similar practices over time," says Michael Littenberg, a partner with Schulte Roth & Zabel.

What qualifies a company's Website as a "recognized channel of distribution" according to the SEC? A number of factors are involved, including whether a company normally posts news to the site, keeps the site current, and makes the news prominent and easily accessible to a broad audience. Site traffic and media attention are also considerations, as is the use of "push" technology, such as RSS feeds, that can alert the public to the presence of a new posting.

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