SeanReadsTheNews

TIME: Silicon Valley's Teflon Wears Off

It's a sad statement that thriving, innovative companies are the targets of bad publicity because of what they don't do. The government, and a healthly slice of the media, expect all companies to be capitalized the same way forever.

So when companies that don't need labor scale up - politicans and reporters as "where are the jobs?" When companies that can't be pinned down to a geography because their products are largely intellectual, they ask "where are the taxes?"

A sane answer would be "we aren't that kind of company, please go do something else," which has been the rule for Apple, Google, Facebook and so on so far.

As Rana Foroohar of TIME reports today, that time is coming to a close as desperately greedy corporations and activists looking for handouts show up where the money is - Silicon Valley. 

There is also an Emmanuel Goldstein quality to Foohar's report - noting that with the banks in retreat they aren't as attractive a target right now for the envy crowd.

Tech is taking over for finance, which is finally being reined in via the Volcker Rule, as the focus of anger over the economic problems of our day. These include, of course, slow growth, high unemployment, flat wages, and corporations that appear to float above the problems of the countries in which they operate.

What's interesting is that while Foroohar in that paragraph attempts to show why it isn't anything the tech companies are doing that's drawing negative attention, she undercuts that notion throughout the rest of the article by decrying, for example, Apple's tax structures or Facebook's lack of job creation as if it made them guilty of something.

Panic in the Streets: NYT on Spies Invading World of Warcraft

When I first launched the category, I reserved the "Panic in the Streets" tag for stories that purported to shock readers with tales of a personal threat - usually from new technology - but lacked any examples of the bad thing actually happening. "The IRS is checking your Facebook posts to decide when to audit you," was the classic of the genre. Of course, since publication, that particular example has become a lot more plausible.

Today's New York Times feature by Mark Mazzetti and Justin Elliott on spies playing online roll-playing games just in case terrorists are using them to pass messages falls more on the ironic side - as in, 'I can't believe my tax dollars paying for this.'

The spies have created make-believe characters to snoop and to try to recruit informers, while also collecting data and contents of communications between players, according to the documents, disclosed by the former National Security Agency contractor Edward J. Snowden. Because militants often rely on features common to video games — fake identities, voice and text chats, a way to conduct financial transactions — American and British intelligence agencies worried that they might be operating there, according to the papers.

Not since the Securities and Exchange Commission exposed attorneys on payroll who did nothing all day but surf porn sites has there been a major media story on how government workers collect money for nothing.

The NYT's scoop (shared with ProPublica, for which Elliott writes) keeps getting better as it goes:

But for all their enthusiasm — so many C.I.A., F.B.I. and Pentagon spies were hunting around in Second Life, the document noted, that a “deconfliction” group was needed to avoid collisions — the intelligence agencies may have inflated the threat.

So we're back to the 1950s, when communist groups in the U.S. had so many FBI informants in them there were no real communists there for them to catch (but it sure beat enforcing civil rights laws or other more dangerous assignments).

When asked, the government basically admits this is all ridiculuous and that they have been paying their spies to play World of Warcraft and similar games for no reason.

The documents, obtained by  The Guardian and shared with The New York Times and ProPublica, do not cite any counterterrorism successes from the effort. Former American intelligence officials, current and former gaming company employees and outside experts said in interviews that they knew of little evidence that terrorist groups viewed the games as havens to communicate and plot operations.

It's so hard not to be an Edward Snowden fan when stuff like this publishes because of his leaks. 

23andMe Blames Public Relations For Capricious Action by FDA

Fortune's Michal Lev-Ram caught my eye this morning with an interview with Anne Wojcicki, founder of 23andMe, in which she blames public relations for the FDA deciding to ban her product.

But here's the thing: did she really, or did the headline writer just get ahead of herself?

In her first media interview since the headline-making letter (and 23andMe's equally terse response to the FDA), Wojcicki told Fortune that her company fell behind schedule and failed to communicate proactively with the FDA and the public. At the same time, she also said she is taking steps to work with the government agency to rectify the situation and move forward.

This isn't really blaming public relations as much as saying "the only thing wrong with my product is that you don't understand what it is for," which I consider slapping back at the critic rather than acknowledging a true failure.

The rest of the interview largely backs this viewpoint. There is no specific communciations tactic or even a strategy mentioned that was deficient, only a bit of genuflecting before the government and promises to do better to make them happy.

It's sad to see such accomplished leaders essentially reduced to telling an abusive spouse they'll try harder to make them happy - but that's the position 23andMe is in with the FDA.

The communications strategy is to argue that a non-operational problem rather than something intrinsic caused the rift with the FDA and therefore it can be fixed without a long-term impact on the company's prospects.

The real story, which the Wojcicki sisters can't put forward due to government relations risk, is that the FDA's leadership woke up on the wrong side of the bed, decided they didn't get the proper tribute from the growing business and found a way to make trouble. With their ties to Google, they probably should have seen that coming.

New York Magazine Goes Biweekly - The Good News

David Carr of The New York Times reports today that New York Magazine, a highly decorated weekly news and arts magazine, is cutting back circulation from weekly to bi-weekly in the new year.

However, unlike the recent decline and fall of Newsweek, the underlying news out of New York is actually tremendous and if it breaks the right way a great sign for the whole industry.

Digital revenues have been growing at a rate of 15 percent year-over-year, and in the coming year will surpass print advertising revenues, according to Mr. Burstein. But part of the reason those lines are crossing is that the print revenues are plummeting.

 Usually, when magazines report their growth in digital revenue, it's on a percentage basis or without the context that it is a fraction of what print advertising used to provide. In this case, we are seeing that New York is actually making more money from digital advertising, enough to bankroll 15 new jobs after the transition to a less-frequent print product, Carr reports.

That's a great sign for all of the magazines who had seen $50,000 full-page ads replaced with digital advertising at a fraction of the cost. As the online audience is proven out, those spreads are starting to converge and it means that journalism as we know it can be funded as we know it.

A few days late - but something for which to be Thankful.

The Verge: How a PR Firm Got Blacklisted by WikiPedia

A semi-recurring theme of this semi-recurring blog is the extent to which public relations practices have become newsworthy parts of corporate management coverage - alongside mainstays human resources, financial management and supply chain management.

Unfortunately, most of the time PR Makes News, it is for the wrong reasons and so we arrive today at Amar Toor's Verge article on how Texas firm Wiki-PR had been engaging in paid editing of the open-source encylcopedia.

With the exception of poorly moderated Yahoo! Finance chat boards, very little makes thin-skinned corporate management teams more upset than critical WikiPedia entries and PRs both well-meaning and nefarious have been fencing with the the site for years to defend their charges.

The firm, Wiki-PR, is believed to have created more than 300 fake accounts used to edit Wikipedia pages — a practice known as "sockpuppeting" — thereby threatening the principles of objectivity and neutrality that the encyclopedia was founded upon.

It seems self-evident but I'll say it anyway: if that's your answer to the public criticizing you via any kind of social media, then you've already lost the skirmish, battle and war for your reputation. 

Engagement is the way to respond to unfair WikiPedia edits, whether you are JP Morgan, Exxon, Wal-Mart or Planned Parenthood, make your case. Use the money you spent on sock-puppeting PR firms to buy key words that place your rebuttal in the same searches as the offending article, or tweet the truth back at critics.

What I find further annoying as a 20+ year agency public relations professional is that Wiki-PR is trying to make money for nothing, and not in the really cool way.

Creating sock-puppet accounts that say what you want them to say isn't working. You aren't convincing anyone to do anything, persuading any skeptics or writing great words of wisdom - all of the stuff PR people do that's actually difficult to accomplish.

This firm has picked the lowest possible aspect of the service, targeting the lowest possible level of client, and specialized in it.

Hopefully, bad publicity will kill them. FYI to WikiPP, comments are moderated and must be approved by me to appear on this page. I'll know if it's you.

 

 

Bloomberg: Israeli Security Forces Revamp of Local Pot Market

David Wainer of Bloomberg News has found a new spin on reporting the impact of the heightened security between Israel and it's surrounding hostile neighbors - it has forced the Israelis to start growing their own weed.

Any long-time readers of this blog will observe that I am a sucker for a business news-style report on otherwise illegal activity for what it reveals about the form as well as for its ability to compel an audience to view a controversial issue objectively.

Wainer achieves that in spades with his report today.

“From a public interest standpoint, this is a positive development,” said Boaz Wachtel, founder of Alei Yarok, or the Green Leaf Party, and a key figure in bringing medicinal cannabis to the country. “The stuff grown inside Israel is of higher quality. Some hash coming in from Lebanon was just clay mixed with sap.” Even better, Wachtel says: Drug money is no longer going to places “that shoot missiles at us.”

We pause to point out that in general, global trade is a positive for increased quality, pricing and availability of goods and services but clearly there are unique circumstances at work here.

The rest of the article is a review of the state of marijuana legalization in Israel, where medical uses are very highly accepted but recreational use is viewed less favorably than in the United States.

Wainer quotes activists, academics, politicians, recounts public controversies in the area and how they impact the ongoing debate. It's a fine example of a well-researched business article.

Wainer notes that the laws of supply and demand are hard at work in the Promised Land.

In the meantime, Israeli growers are sprouting to feed the black market, estimated at $700 million a year, according to the Market Studies institute. A decade ago about 70 percent of Israeli cannabis came through Egypt and Lebanon, Wachtel estimates. These days less than a third comes from those two countries and Jordan, and the rest is local.

The article is not mocking, snide or celebratory. It reports the facts well in an engaging manner. Those facts support my preferred policy outcome of decriminalization.

Render Unto Caesar What is Caesar's: NYT's David Carr on Content Farms

What better way to return after several months of not blogging than the latest thought-provoking column from the media's best media columnist, David Carr of The New York Times.

Carr chips in today with a review of Contently, a high-end content shop that produces sponsored editorial for corporations, often for posting on media sites. He covers it mostly from the perspective of a journalist, evaluating how valuable high-end sponsored content is and how it could fit into a wider universe of reporting.

Contently, which grew out of the TechStars incubator program in New York, developed a roster of writers and journalists for hire and a software application that helps companies tell their own stories as well. Three years later, the company has raised $2.3 million in financing, developed a roster of 27,000 writers, grown to 24 employees and has 40 Fortune 500 companies among its clients. Some of its customers include American Express, Anheuser-Busch and PepsiCo.

My thoughts were more directly toward implications for public relations. Most obviously, there are more opportunities than ever for companies to interact directly with their clients without the filter of media and Contently's ability to raise $2.3 million (at a time when The New York Times corporation was busily writing down almost everything they paid for the stately Boston Globe and Newsweek all but went out of business) to make that interaction polished and meaningful reflects it.

More subtly, the existence of such outlets also means that clients push less hard to get advertorial-type stories in earned media, which definitely allows media relations professionals to spend our time more productively identifying ways to meet both the needs of the client and the journalist.

The reality has always been that some messages need to be in advertising because they don't meet the threshold of being news. Not wasting time trying to turn an advertisement into a news story based on a poor client understanding what will sell means everyone is getting more for their public relations investment.

That is to say, they can render the non-news to Contently's Caesar, and the news to earned media.

It also allows for nice stories - like a corporation publishing something respectful about Martin Luther King, Jr., or on Veteran's day finding an audience if it's worthy.

Both in personal consumption of information and from what I've seen in the workplace, earned media is more important than ever in influencing decisions.

For example, I recently shopped for "dental tourism" providers - low-priced but high quality dental implants provided abroad - to see if they made sense for my family. I ended up walking away from the project because I couldn't find a third party article, such as coverage in The Wall Street Journal or New York Times, that referenced a provider who had been vetted.

Similarly, clients publish more newsletters, alerts, white papers and articles than ever - but the first question they ask is 'can we get this covered?' because they want that validation.

Carr comes back to the idea of where Contently fits by observing that the Columbia student founders spent a lot of time trying to figure out what a sustainable journalism model would look like and determined that sponsored content would have to be part of the mix.

I agree because there has always been a demand for this type of content from clients when they have something to say but it isn't really news meeting that need while respecting the added value that earned media provides is a positive incremental step for corporate communication and media relations both.

Motley Fool: The Last Bubble

My old pals at The Motley Fool are at it again - taking my absolute favorite business hobby horse - reporters who call every appreciating asset class a bubble - and beating it further to death.

Their April 1 story includes all the staples of the genre, an obscure analyst who is trying to make a name for himself with an outlandish call, the rush to the internet, obscure charts you won't read, a branded index that explains the problem, apocalyptic third-party quotes and more!

Also, as someone who reads Zero Hedge every day, this one was perfect:

You'd better take a seat...

A quick Google search confirmed that the VIX is calculated by the Chicago Board Options Exchange, a subsidiary of CBOE Holdings,

And who owns CBOE Holdings? You guessed it: Wall Street.

CBOE's largest shareholders are big names like T. Rowe Price, Blackrock, Vanguard, State Street Global Advisors, Fidelity, and the infamous quantitative hedge fund Renaissance Technologies. A member of CBOE's board of directors even held senior management roles at Morgan Stanley for more than three decades!

In short, the so-called "Wall Street fear index" is just that -- a fear index of, by, and for Wall Street.

And Wall Street has billions of dollars in profits at stake. Do you really think they wouldn't hide an impending catastrophe from Main Street? These guys manipulate the VIX numbers for fun and profit every day -- just like LIBOR and the CPI.

Even though they are shamelessly stealing my bit, I love it. Have a great day guys. Love to the familes.

Panic In the Streets? CNNMoney Gets One Right...

This blog frequently mocks business reporters for announcing crisises that have no victims, such as the non-scourge of people's homes being targeted for burglary based on their social media updates.

My rule is that you need at least one or two victims before you can report a problem like that or you're just making stuff up (probably at the behest of a consultant looking to use the media to build a service line).

That long introduction is to an admirably compact article by Steve Hargreaves of CNNMoney.com who reported today on risks to U.S. infrastructure from hacker attacks. He opens with a screen shot of a phishing e-mail sent to employees of a powerplant, which proves the risk is real.

Targeting third parties is something Petersen has experience with himself: His own firm was the subject of a so-called "spear phishing" attempt last year. In that attack, a crafty cyberthief fashioned an email to Digital Bond employees that seemed to come from Petersen himself (see graphic at top). It contained a link that, if clicked on, could have granted the perpetrator access to sensitive client data held by Digital Bond. The plan was only thwarted when an auto-forward function sent Petersen a copy.

The article is pegged to a security firm survey on Chinese attacks on U.S. systems and does engage in some of the usual listing of what "could" happen as a result instead of reporting what actually has - but at least the attacks are verified and we are seeing actual victims step up to discuss the risk, not just the consultants who stand to benefit from waving the resulting article around.

It was also a nice touch by Hargreaves to note that the only successful hacker attack on infrastructure so far was conducted by the U.S. and Israel on Iran, which is comforting on some level.

To be clear, the report from U.S.-based cybersecurity firm Mandiant did not say the Chinese government has actively tampered with these systems. The only two counties thought to have actually altered industrial processes in another country are the United States and Israel, which are suspected of infecting an Iranian uranium enrichment plant with malicious software that caused the centrifuges to spin out of control and self-destruct.

TIME on Anti-Valentine's Day Pitch

In general, I resent gimicky, holiday-driven opportunistic pitches because they almost always lead to vapid, content-free journalism.

That said, when they work, they are awesome and such is the case with this TIME story by Brad Tuttle on a couple of retail sites pitching anti-romance on Valentines day.

At the specialty resale sites NeverLikedItAnyway and ExBoyfriendJewelry, sellers are encouraged not only to get rid of gifts from their ex-lovers, but also to explain what went wrong with the relationship. “You MUST share your story,” the rules at ExBoyfriendJewelry stipulate. “We want to keep things fun and cathartic so get it off your chest and tell why you’re selling.”

Clearly, the PR teams behind these sites hit just the right notes in reaching out to Tuttle and finding an angle for the "holiday" that breaks out from the crowd with a useful, and funny, approach.

That's worth a salute on a day when every PR pro lacking imagination is jamming the media channels with same-old, same-old pitches.