Mark Hynes - thoughts on corporate disclosure

Opinions on changing rules, changing best practices, and their effect on investor relations officers.

Wednesday, September 05, 2007

Power to the people ….Web 2.0 and IRO’s

Last week we saw a community stand up and demand change. The students who rebelled against the bank charges at HSBC using their Facebook connections showed how web communities can influence even mighty forces.

And web 2.0 is all about communities, and increasingly communities of investors. For example, there is an emerging breed of investor trading platforms which allow the users to share trading experiences. Some of these online brokers are using social networking as a building block of their services.

Even though they differ in many ways, platforms like TradeKing, Zecco (Zero Commission Costs) and thinkorswim are all developing their businesses in ways that offer more than just trading. Members – who are carefully screened before they join – can share their investment strategies, key stocks they track, and recent transactions. Some platforms allow blogs about trading conditions, and chat rooms.

A key to this is that investors no longer want to be just on the receiving end of news and materials, rather they want to expand their reach as communities, as web 2.0 encourages, and to influence share prices.

So of course the challenge – especially for those companies with substantial numbers of retail investors – is how to keep track of what’s being said, and in how to counter it where necessary.

Few investor relations officers ‘get’ the phenomenon, although there are events out there that aim to share with PR and IR professionals, the different types of communities that are springing up.

Yet another skill set for the beleaguered IRO’s to master.


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