January 26, 1999

Investors' Rights

Online Investor Relations

Yi-Hsin Chang (TMF Puck)

The Internet has changed the way we shop, stay informed, and communicate with family and friends. It is also changing the way we as investors keep up with companies we own or would like to own. While many companies don't allow lowly individual investors to listen in on live conference calls they hold with analysts and institutional investors -- or even replays of the conference calls -- some enlightened companies are leading the way in improving investor relations via the Internet.

Not surprisingly, many of the pioneers pushing the technological boundaries on investor relations (IR) are involved in online or other computer-related businesses. Take Microsoft (Nasdaq: MSFT). The company known for its Windows operating system has one of the most comprehensive and informative IR sites around. MSFT Investor Relations not only provides basic offerings such as a stock quote, Frequently Asked Questions (FAQs), annual reports, and press releases, it also has a daily update of the ongoing landmark antitrust trial brought against it by the U.S. Department of Justice, transcripts of speeches by company executives, and, perhaps most importantly, live Internet broadcasts of its conference calls.

Microsoft also provides detailed historical data on its stock -- from trading volumes and prices to annualized returns and investment growth. Plus the company's annual report is available in 11 languages, including Chinese and Portuguese (a version for Brazil and one for Portugal), and its income statements can be viewed in accordance with accounting standards and in the local currencies of Australia, Canada, Germany, France, Japan, and the U.K. It's hardly shocking that in March, Investor Relations magazine named Microsoft as having the "Best World Wide Web Site."

Similarly, Dell Computer (Nasdaq: DELL) offers a site called Dell Direct World that gives a sweeping look at the who, what, where, and how of the PC maker and direct seller. In the IR area, you can view a broadcast of the company's 1998 Stockholders Meeting, and -- here's the really cool part -- there's a Calendar of Events where you can sign up to receive reminders via email of upcoming quarterly earnings releases, analyst meetings, and the next annual meeting of stockholders. You can even set how many days in advance you'd like to be notified.

For companies unable to devote as many resources to developing comprehensive IR websites, there are now several firms specializing in providing cost-effective solutions on the Internet, making online IR communications a business onto itself. Boston-based Corporate Communications Broadcast Network (CCBN), for instance, serves more than 400 companies by enabling investors online to listen to live conference calls ("WebCasts"), view corporate slide shows, and subscribe to an email notification service regarding events such as news announcements and SEC filings.

CCBN, the brainchild of Jeff Parker, who founded the well-regarded earnings estimate source First Call Corp., also converts traditional annual reports into online formats. The company's clients include Oracle (Nasdaq: ORCL), Yahoo! (Nasdaq: YHOO), Polaroid (NYSE: PRD), and BankBoston (NYSE: BKB). Oracle's IR website was named the best investor relations site by independent consulting firm Shelley Taylor & Associates in a study evaluating the sites of 50 Silicon Valley companies.

Another upstart targeting the online IR market is Broadcast.com (Nasdaq: BCST), formerly known as AudioNet, which broadcasts streaming media programming on the Web. Specifically, Broadcast.com produces live and archived shareholder meetings, press conferences, earnings conference calls, investor conferences, trade shows, and product introductions. Its clients include Microsoft, Dell, Intel (Nasdaq: INTC), America Online (NYSE: AOL), AT&T (NYSE: T), Yahoo!, Texas Instruments (NYSE: TXN), and Texaco (NYSE: TX).

A good example of what Broadcast.com can do is a multimedia archive of Intel's Fall 1998 Analyst Meeting in San Francisco (available through May 31, 1999). Here you can view or listen to the entire presentation by company executives, including the slides they used -- from CEO Craig Barrett's opening remarks to the question and answer (Q & A) session featuring Chairman Andy Grove. Similarly, you can listen to a broadcast of a press conference on the latest Internet retailing efforts of Macy's website, macys.com.

Then there's Vcall, launched in the first quarter of 1998, which, like Broadcast.com, provides online live audio simulcasts as well as replays on demand. The Philadelphia-based firm generally focuses its efforts on quarterly earnings releases, though it also broadcasts major corporate announcements, annual meetings, and investor conferences.

Investor relations took a giant step forward in early December, when the Nasdaq Stock Market signed a partnership agreement with Broadcast.com to provide Web broadcasting services for quarterly earnings conference calls to Nasdaq-100 companies as part of a pilot program. Nasdaq President Alfred Berkeley said that the program will give individual investors "access to the same information previously available only to a select few on Wall Street," and that he hopes Internet broadcasting will become a "standard corporate communications tool."

By broadcasting conference calls and other corporate announcements over the Internet, companies can reach a larger audience of existing and potential investors at a much lower cost than by conventional means. Web broadcasts give individual investors equal access to calls and reduce the risk of selective disclosure. So not only has the Internet changed the way we invest with online trading and research, it is also helping to level the playing field between big and small investors.

-- Yi-Hsin Chang (TMFPuck)

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