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April 4th, 2000

[Editorial] Yes, Rumor Sites Hurt Us: Rebuttal To Charles Moore
by Michael Munger

Last week, Charles W. Moore posted a rebuttal titled Do "Rumor Sites" Really Hurt Apple Or You? at Applelinks.com. His reply was directed at my latest column about rumor sites and their impact on Apple and the people.

In short, my point was to demonstrate the impact of the false hype created by rumors on Apple stock and how this could affect more than Apple itself.

I'm not nearly as rumor-phobic as Michael. His basic argument is that: "Many people refuse to buy a new Mac because rumor sites tell them that a new unit is coming tomorrow. Sometimes, rumor sites write checks that Apple can't cash when promising a product that Apple doesn't even plan to conceive. That hurts Apple's image, stock and profitability."

Yes, we have heard that many times from various rumor site bashers, most recently regarding the non release of the Pismo PowerBook at MACWORLD Expo in January. I would suggest that a perusal of Apple's stock price chart over the past three months blows the theory to smithereens. When Pismo was not introduced at MWSF, did Apple's stock price tank? No. Did it recede significantly? No. Did it climb from the 80s to the 140s over Q1 200? Yes. The rumor sites had egg on their face, but that seems to be the real extent of the damage.

First of all, and if only for the record, I would like to correct something. I never implied that Apple stock was hurt at the moment by the rumor sites. It may have looked like that, but that's not what I intended to do so.

If rumor sites hurt Apple stock but not right now, why did I issue such a statement? It sounds stupid, doesn't it?

The rumor sites are not the biggest factor on Apple's stock and performance, but they do have an influence. An influence that we can't measure concretely, which paves the way for denial. But we cannot dismiss something just because we can't write directly on paper. It has an indirect effect on the public and Apple's image. It's easy to take the present state of AAPL, which surfs on a wave of profits and optimism beyond a rumor site's control, and compare it to my argument about rumor sites since in the situation, it wouldn't hold water. But in more difficult times, it is another story...

Who can deny that people waited because the rumor sites gave information about future releases? I've seen a lot of people saying "well, that new Mac is coming out soon, so I'll wait." That's not just hypothetical thinking, it is reality. Several Observers have demonstrated this to me since I published my column about the issue. They ended up disappointed and wondered why Apple didn't deliver on time. But who set the time? AppleInsider? Mac OS Rumors? Who are they to predict releases? It is one thing to speculate, and it is another to say that you have reliable sources inside Apple assuring you that the new PowerBook is coming next month.

Rumors sites have no grasp on Apple stock at the moment because it's on a roll. But it won't be like that forever. Apple is excellent at doing the "open mouth, insert foot" routine and I am sure it will happen again one day. When it does, I bet you US$10 that the rumor sites will become more influential and that the phenomenon I described earlier this week may take effect. Remember how strong Mac OS Rumors was in 1997, we all went there to get our news because we couldn't get anything interesting from Apple itself. That affected a lot of people's buying habits because they wondered what would happen and kept away from new Macs because of everything they read from informal sources.

Let's continue to examine what Charles said:

Secondly, while I treat new product speculation cautiously, the journalistic hat that fits me most comfortably is that of a consumer advocate. Ergo: my first priority is to help readers get the information they need to make purchase decisions that are in their best interests, not to worry about how those decisions are going to affect Apple's stock prices. I wish Apple well in the corporate arena, and I may even own a bit of Apple stock in one of the mutual funds I hold for retirement savings -- I honestly don't know -- but as a journalist that should not be a concern of mine.

When someone is going to lay out several thousand dollars for a new laptop computer, they deserve to be informed of all the relevant factors, and evaluating whether it is better to buy the currently available model, or whether some feature on the next model is worth waiting for, is perfectly fair game.

No. The journalist is between everybody. Which means that whther or not was are talking about an individual or a company, we shouldn't hurt them on purpose. Both have the right to exist, to prosper and to pursue goals. It's another thing when these companies or individuals are abusing rights, though.

Your responsibility toward the readers doesn't mean that it is suddenly ok for everybody to break Non-Disclosure Agreements (NDA) and inform "the people" about future releases that may or may not make it to the shelves. It doesn't excuse the pure invention of information like Mac OS Rumors and AppleInsider have done in the past (remember the Apple-Disney buyout?).

The problem is that this is what happens right now. Everybody breaks those darn NDA's to be first with a scoop.

An agreement, even verbal, can be declared as a legal contract by a court of law. If you click "agree" when using an installer, it means that you are going to respect the terms imposed upon installation. When you install developer releases of the Mac OS or any piece of software, it means that you agree to refrain from talking about it, except to the company for bug reports or comments about the product. If you are an employee, there is information that you cannot disclose, and the computer world is just an example of this.

As far as I am concerned, the buying interests of the public is not above the law. The journalist is not above the law either. Companies too are not above the law, and when they break those laws, that is when journalists have the right and responsibility to print "secret" information. Period.

If you want to inform readers seriously, use the material that you have the right to publish. It's none of my darn business to know the ins and outs of the next G4 and I am going to wait until Apple announces something. Companies have the right to work like this - we call this strategy - and I would like to know why breaking any kind of NDA (developer or employee) is ok just because the people want to hear the latest gossip.

Just because there is a market for a type of information does not mean that we have the right to publish it. Otherwise, the National Enquirer and other nonsense publications would be right to do the things they do. Ethics exist and I am one who likes to respect them. My freedom stops where yours starts, and this applies to journalism and free press as much as to anybody else. The right and obligation to inform do not make exception to legal agreements and ethics.

All of that said, I respect Charles Moore. This remains an intellectual debate and I do not wish to see anyone thinking that I attack him personally.

I wish that the fresh gossip could just amuse us without consequences. That is not the case, which is why I voiced my opinion against rumor sites. I stand behind what I said.

What do you think about this column? Talk back in the On The Flip Side Forum.

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Michael Munger discovered Macs in 1994 in college during his pursuit of a journalism degree. Since then, he has never looked back at PCs. A former student of history now taking Public Relations at University of Montreal, he is a French Canadian living in Montreal, where he advocates the Macintosh with vigor.

He co-founded MacSoldiers in May 1998, where he was Assistant Editor and Columnist. He contributed to ResExcellence and MacPlaza with resource editing and interface goodies. He also layed a virulent spanking threat on the MacAddict staff! (Sept. 98 issue of MacAddict magazine, page 13). Be very afraid... In addition, he is a boxing columnist for the Montreal Sports Report.

You can learn more about him at www.cyberboss.net, his personal Web site.



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