When GE announced its intended $45 billion acquisition of Honeywell last week, the morning-after buzz on the Yahoo! Finance message board was frenetic. Comments and
speculations were popping up faster than mushrooms after a heavy rain, given that GE's intervention curtailed Honeywell's prior betrothal to fellow suitor United Technologies.
GE was quick to anticipate the inevitable circus, and juiced up its Web site with an extranet dedicated to the details surrounding its intended merger. Interested parties can
now venture online to view the press announcement, download digital photos, read the announcement transcript, view Webcasts, and click into detailed information about the
financials, leadership, visions and history of both companies.
To the extent that every merger situation is, in essence, a crisis, GE had a cool grip on the best route to meet its constituencies quickly and consistently - abiding by the
SEC's newly-activated Fair Disclosure laws, no less.
And the results of a straw poll conducted at last week's PRSA World Congress in Chicago show that the Web mindset is becoming more mainstream among crisis communicators. The
poll, conducted by the crisis management ASP Firewater.com (PRN, Oct. 23), asked trade show attendees how they would have handled the Bridgestone/Firestone crisis had they been in
the tiremaker's shoes in the initial hours of its recall. Roughly 46% of respondents said they would have leveraged the Web as a primary medium in managing the crisis, although
58% cited TV news coverage as the best route.
Of course there's a distinction between the hypothetical and the actual. Anecdotal findings were more dismal in an informal, show-of hands reading of participants in a seminar
session later the same day tackling the issue of online anti-corporate activism. Fewer than a quarter of participants indicated they were in the practice of even monitoring
online activity for potential hot spots, and even fewer indicated having an online crisis response plan in place.
Which is surprising in light of some of the most recent corporate fiascos involving online attacks. Need we conjure up the watery memory of Emulex's stock dive into the toilet
last August after a bogus release was distributed through InternetWire? Earlier in the summer, Monsanto's brand reputation took a hit when a squatter secured rights to the URL
"Monstantos.com," and reproduced the life sciences company's Web site design impeccably - but with different content. Now, hosts of companies are suffering at the hands of a new
software known as "Third Voice," which allows online activists to attach the equivalent of digital "post-it notes" to corporate Web sites, commenting on the content therein.
In the worst-case scenarios, online activism can falsely increase or decrease a company's market cap, damage its reputation, lower sales, and cast doubt about the company's
viability or trustworthiness among customers and investors, PR Newswire president David Armon warned participants in the online activism seminar. Web-based attacks also can cause
internal morale problems, hinder employee recruitment efforts and even spark a flurry of lawsuits, he added.
And while cases involving trademark or copyright infringements - such as the design banditry of the Monsanto site - are relatively simple to resolve through "cease and desist"
letters, situations involving alleged slander or libel tread a more slippery legal slope.
"Legal retribution can be the worst course of action," in these kinds of situations, said session co-presenter Jim Lukaszewski, because it's a strategy that reinforces the
David and Goliath dynamic that so often typifies corporate battles with small-time hackers.
"Part of the price of being of a top brand is that you exist in this kind of environment," added Lukaszewski, whose eponymous consulting firm specializes in litigation
communication and crisis management. "But libel is a difficult area to litigate." The better response in dealing with online activists is to engage them in one-on-one dialogue.
Often online activists themselves are not well-versed in the specifics of the campaign they are supporting, he said.
Lukaszewski illustrated his point by citing a recent incident in which a California state agency received an email petition supported by more than 10,000 signers. To
facilitate dialogue with its constituents, the state replied to signers individually with a short message, indicating awareness of their concerns and offering three links to URLs
where petitioners could get more information about the subject at hand. Online tracking showed that nearly 90% of petitioners viewed the URL attachments that were sent to them -
and an overwhelming majority later indicated they never would have signed the petition had they known what it was truly about.
The linchpin tactic in the above-mentioned strategy was keeping the email reply brief. Corporations that reply to rogue operators with lengthy emails often realize later that
they've only provided additional fodder (straight from the horse's mouth) for the activist's Web site, thus exacerbating the crisis, Armon said.
Which kinds of online crises are most damaging? Contrary to conventional fears, boycotts actually pose the lowest threat, as most are unsuccessful, Lukaszewski said. "There
are thousands going on at any given time," but very few have impact, because they don't get media coverage, and because Americans are unwilling to change their behavior in support
of the cause.
Nevertheless, online boycott efforts should be monitored closely as they often shed light on problem areas that might erupt in the future. And as for merger scenarios, always
anticipate the worst. Here, the chances are significantly higher that your worst nightmares will manifest themselves.
(Armon, PR Newswire, 212/282-1930; Firewater, 703/365-8900; Lukaszewski, 914/681-0000)