UPDATE: Limelight Networks has responded to this article in the comments below.
US INVESTOR relations departments that continue to issue full-text press releases are not only wasting their shareholders’ money, they’re also shooting themselves in the foot by ensuring that their websites will fail to meet “recognized channel” status under the SEC’s new guidance for company websites.
To prove the point, let me give you an example from yesterday involving Limelight Networks, Inc. (Nasdaq: LLNW), a company that — irony of ironies — is actually in the business of making sure companies’ websites are go-to resources by “enabling the next wave of Internet business and entertainment.”
After regular market hours, Limelight issued its second-quarter results in a full-text news release that it paid a PR wire service to distribute. Various journalists and bloggers who follow the company wrote about the results and linked to its earnings release.
But instead of linking to the release on Limelight’s IR website, which they would have done had Limelight taken advantage of a new option the SEC has made available, they linked to the release that the PR wire service distributed to Yahoo!’ s website.
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| Instead of linking to the release on the company’s website, most investment websites and blogs linked to the release on Yahoo! This could impact the company’s ability to meet the “recognized channel” threshold for Reg. FD. |
Among the websites linking to the Yahoo! version of the company’s release included:
- Barron’s Tech Trader Daily, a blog by the Dow Jones owned weekly newspaper.
- Seeking Alpha, one of the top investment sites on the web these days.
- Silicon Alley Insider, which is run in part by former Internet analyst Henry Blodget.
Other publications, such as paidcontent.org, owned by the UK’s Guardian Media, linked to other versions on Limelight’s earnings release on other sites.
In fact, I couldn’t find a single blog or website linking to the version on the company’s own website.
Without “backlinks,” hard to argue your site is a “recognized channel”
So why does this matter? Because if Limelight ever wants to save money by being able to use its website for disclosure under Regulation Fair Disclosure (Reg. FD), the SEC says it will have to show in part that its website is a “recognized channel” for investors and the market.
And if few market participants link to the company’s website, it will be hard for the company to argue that it’s a place investors think to go when they’re looking for information or news.
Backlinks are the accepted measure of authority on the Web. Google’s search algorithm relies on them heavily, as do other search engines and directories.
But if you’re issuing full-text releases, your information appears in numerous locations and much of the authority accrues to the PR wire service and its distribution partners rather than to your company. In Limelight’s case, Yahoo! is clearly the “recognized channel” and not the company website.
Actually, it’s a little worse for Limelight because it’s in the business of delivering web content via their own network. They’re providing technology to support the video and other content for the Olympic Games on NBCOlympics.com.
If any company should be hosting its own press releases and other web content, you’d think it would be Limelight.
Dominic Jones (bio) created IR Web Report in 2001. He is a consultant to leading public companies and investor relations service providers worldwide. You can contact him via the contacts page.
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