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Full text of "Managing Reputation in Cyberspace"

MANAGING REPUTATION IN CYBERSPACE 



Increasingly this broth threatens brands and corporate reputation and needs 
professionalism to immunise or doctor the effects of the brew. 



INDEX 



INDEX 1 
SYNOPSIS 3 

INTRODUCTION 10 

THE INTERNET INFT UENCE 1 

REPUTATION 11 

THE INTERNET SOCIETY 1 1 

HOW PEOPLE USE THE INTERNET 14 

THE OPINION FORMERS 16 

A STAKEHOTDER SOCIETY 1 7 
ITS FAST 19 

TECHNOTOGY FOR THE PEOPTE 21 
A REPUTATION FOR RESPONDING 24 
NEWSGROUPS, CHAT AND CYBERCAST 25 
THE NA TURE OF NEWSGRO UPS 26 
CHAT 34 
CYBERCASTING 35 

THE INTERNET COMMUNITIES 37 

The Art of Hosting Good Conversations Online By Howard Rheingold 103 
NEIGHBOURHOOD COMMUNITIES 39 
COMPANY COMMUNITIES 40 
COMMUNITY CURRENCY 42 

THE EFFECT OF VIRTUAL COMMUNITIES ON THE BOTTOM LINE 43 
POLITICAL COMMUNITIES 45 

CYBER MARKETERS 46 

GLOBAL BRANDING 47 

ACCESSIBILITY 50 

CYBERBRAND OUTREACH ACCESSIBILITY 52 

INFORMATION 53 

INTERACTIVITY 54 

BRAND PERFORMANCE 56 

© David Phillips July 1999 Pa ge 1 of 104 



MANAGING REPUTATION IN CYBERSPACE 



PROMOTION 57 

AMBASSADORS 57 

ONLINE PR 58 

SPONSORSHIP MARKETING 59 

BRAND ATTACKS 61 

CYBER COUNTERFEIT SALES 63 

INTERNAL COMMUNICATIONS 63 

POROUS ORGANISATIONS 63 
CYBERSA WY STAKEHOLDERS 64 
CYBERSTALKERS 64 
PROTECTION FROM CYBERSTALKERS 68 

INVESTOR RELATIONS 70 

SHARE SCAMS 71 
GULLIBLE INVESTORS 72 
DISGRUNTLED EMPLOYEES 76 
PROTECTING INVESTORS 77 
THE INVESTOR SITES 77 

VERY PUBLIC AFFAIRS 79 

CREA TING CYBER LOBBY SITES 80 

THE LAW FOR THE INTERNET 81 

WHERE ARE THE NATIONAL BOUNDARIES? 82 

SERVICE PROVIDERS AS POLICEMEN 83 

THE COPYRIGHT ISSUE 84 

THE WORLD POLICEMAN HAS NO WHISTLE TO BLOW 85 

PASSING OFF 87 

BEING YOUR OWN POLICEMAN 90 

CYBER WAR 91 

ACTIVISM 93 

THE DO UBLE PARADOX 93 
REAL WORLD OF CYBERSCARE 95 
ANATOMY OF INTERNET ACTIVISM 97 
MANAGEMENT 98 

CONCLUSION 100 
ABOUT THE AUTHOR 101 



David Phillips July 1 999 Pa ge 2 of 1 04 



MANAGING REPUTATION IN CYBERSPACE 



SYNOPSIS 

THE INTERNET INFLUENCE 

The Internet is driving a knowledge explosion. More knowledge has been accumulated by the Internet in the last 
five years than in the previous 50 years. 

REPUTATION 

The nature of reputation. Reputation, derived from experience and third party commendation, needs to be nurtured 
in order for trust to develop. 

THE INTERNET SOCIETY 

There are and have been many forms of society. Religious, capitalist, communist, royalist, democratic and, now 
there is the Internet society. It has unique characteristics. Is about information, knowledge and communication. Is 
global, encourages activity and exchange and involvement round the clock. 

Anyone can say and do almost anything without restraint. An uncanny knack of circumventing restraint attempted 
by conventional societies and a staggering ability to accept and use new technologies. Expectations of Internet 
users run ahead of those who stand between them and the Internet Society. Among members of the Internet 
Society, traditional companies have to be able to react as quickly. Creating an Internet reputation is hard for most 
directors of companies. 

HOW PEOPLE USE THE INTERNET 

Most of Britain's 10 million Internet Society spend 20 hours a week on the Internet. As in all societies, everyone is 
different. Activities include education, entertainment, shopping and communication are all applications for use of 
the Internet. One third of Internet surfing at work is not work related. Interaction and communication, (excluding 
e-mail ) are already significant aspects of Internet behaviour and are the fastest growing applications. 

Subjects people look for are very much about life interest. Only 31% of UK executives feel comfortable using the 
Internet. 

THE OPINION FORMERS 

Netzines using newsgroups and chat, sound (music), shopping and much more. Half the Internet population taking 
on-line news feeds. Big Internet brands are also opinion forming. Internet users like and seek its interactivity. 

A STAKEHOLDER SOCIETY 

Individuals can be signed up to many different stakeholder groups. The component of the Internet that acts as 
silent lubricant is e-mail. Combined with newsgroups, discussion lists. Bulletin Boards and chat, e-mail provides a 
the means by which any person or group of people can influence events as never before. Every organisation is now 
porous in that its every activity can be and is exposed to public scrutiny. Once companies had control of what was 
said and believed about their activities. Now every stakeholder has, can and does provide knowledge and opinion 
freely. Anyone can create a Web site. 

Unacceptable practice attracts comment, criticism and active opposition. At the same time the Internet has become 
the key to commercial success. It is a place to buy and sell. Organisations now have to fight for a presence in 
Internet Society. 

ITS FAST 

The reputation of a company that is slow in Cyber Society must inevitably slide. Growth from 98 million on line in 
1997 there will be 350 million by 2005. Over 4,000 new Web sites appear each day. Consumer on-line spending 
at UK sites grew from $15 in 1997 to $400 milUon at the end of 1999 and it is predicted to reach $1940 by 2002. 
Web advertising started at $500 million in 1997 and two years later was over £1750 million. 

Uptake of technologies. It took 38 years for the telephone to achieve 50 million users and 2.5 years for AOL chat 
services to achieve the same number. Technophobe reputation managers are now a corporate liability. At stake is 
reputation among 1 7 million on-line people queuing to buy Christmas presents on line at the end of the second 
millennium. 

TECHNOLOGY FOR THE PEOPLE 



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From a position of absolutely no knowledge people now capable of many applications. Eight hundred million 
pages of the Web are now searchable. In 1997 that figure as 320 million. 

Finding information is getting faster and smarter but less comprehensive. Clever 'thinking' technologies are 
coming forward. Conversations with robots. Some commercial Web sites have become interactive using 
humanoid robots interacting with prospects and customers. Full functioning broadcast sound and video is with us, 
virtual reality is near, cell phones with Internet access will be a great millennium Christmas present. 

And, with the advent of interactive TV, the range of opportunities grow. 

Being late into the Internet means we can't catch up, the technology is moving away from us fast. 

A REPUTATION FOR RESPONDING 

Maintaining customer loyalty and building a reputation for service with Internet users is dependant on being able 
to interact with people. 40% of e-mail questions to company sites are left un-answered. Companies loose 
customers because they do not respond. Creating and re-creating the value of intellectual properties and brands is 
an issue. Dynamic Internet reputation management is becoming significant. 

NEWSGROUPS, CHAT AND CYBERCAST 

Internet newsgroups, chat and Newscasts are nice places for ordinary people talk about ordinary things. It is a 
place where anyone can ask if there is a kindred spirit with the same interests and because the Internet is so big, 
there always is. Over 30% of netzines use the Internet for communication excluding e-mail. 

The reputation of products and brands are much maligned in newsgroups. Consumers go to newsgroups to find out 
about products and service from other customers. Most users learn this at an early stage, come to rely on trusted 
sites. 

Newsgroups can be damaging and malicious comment can spread like wild fire. Interjecting a posting into a 
newsgroup is akin to interrupting a conversation in a pub. People dislike getting unsolicited e-mails. To be 
effective, you have to use the right netiquette. 

THE NATURE OF NEWSGROUPS 

Most major companies are mentioned in Web pages or on newsgroups every day. Postings of this nature take a 
number of forms. Newsgroups are noted for the speed with which they can spread information. Fake Web sites, 
newsgroups and chat rooms frequented by activists. 

Newsgroups are an audience with a common interest .Debate migrates from one newsgroup to another. People use 
the Internet to solve a specific problem. 

Whether a company should react and how are important questions. This is a form of consumer polling. The 
consumer issue is time critical. Newsgroups are virtual communities and each one is different. 

Some companies spend a great deal of time and effort 'seeding' newsgroups. A number of companies are 
transparent about their activities in newsgroups. Stakeholder, need to be aware of the potential difficulties they can 
meet and the effect they may have. Companies sponsor their own newsgroups. 

CHAT 

Rapidly overtaking newsgroup exchanges. Users can exchange information in public in real time and the downside 
is that there is no opportunity to leave a message one day and see responses to it later. Its faster than e-mail! Chat 
sites regularly feature in the top 25 most visited sites in the home. The relationship between people in chat rooms 
is quite close and personal. The range of chat sites is enormous and monitoring them all, all the time is not 
possible without the appropriate technology. Chat users often multi-task. 

CYBERCASTING 

The BBC broadcasts its mid day current affairs programme. There are indications that it will be even more 
interactive. Telecasts and soundcasting over the Internet brings people on-line to Web pages (and buy products) 
when prompted by broadcasters. 

The active Internet PR person getting coverage in on-line broadcasts. 



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For Webcast users tuned to television and radio stations streaming live programming, advertising provides an 
immediate opportunity to buy product on-line. It also provides an opportunity to interact with the programmers 
and Webcast provider and to react to news, events and opinion. 

THE INTERNET COMMUNITIES 

The Internet Society is made up of many thousands of communities. They take many forms. Most people are 
active in a variety of groups. There are Web site based communities such as the company Web site. The Internet 
has inverted the few -to-many architecture of the broadcast age. There is a commercial opportunity to be gained 
from virtual communities. An Internet community may have a loose, permanent or, frequently, temporary coalition 
with virtual communities with different agendas. Frequently, members of one group will carry information from 
group to group. The nature of Internet communities is change with groups forming and fading. 
The relative anonymity of communities (chat, newsgroup, bulletin board etc) means people tend to say things they 
would normally not articulate. 

NEIGHBOURHOOD COMMUNITIES 

A Local company needs a local virtual presence. Maintaining a link with local communities through local 
stakeholders is a very helpful means of enhancing virtual presence. If the local retailer can enhance its presence. 

There is a growing number of local Internet gateway. The relevance of these local communities and the local 
gateways is the element of trust. 

COMPANY COMMUNITIES 

There are Internet communities in most companies. Some of them operate inside and, additionally, outside the 
organisation. Companies should take reasonable precautions so in the event of a problem they can say they have 
tried to prevent misuse of their system. The key for managing these communities is within the corporate culture. 
Managers have to make clear what behaviours are not acceptable and those that can be damaging to company, 
colleagues and future prospects. The company must have a reputation (and ethics) policy. There are precedents for 
ethical use. 

Internal staff communities can be good, helpful and healthy. 

COMMUNITY CURRENCY 

Internet communities have a sense of monetary value. A portion of the perceived consumer value is based on a 
time element as well as the cash value. 

One of the most dynamic parts of the Internet is the growth of on-line auctions. The perceived value of goods and 
services fall within the traditional area of marketing. However, the 'second hand' or more properly the 'second 
transfer' of value often has an element of reputation attached to it. 

THE EFFECT OF VIRTUAL COMMUNITIES ON THE BOTTOM LINE 

Most companies also need a view as to how their on-line marketing is affecting the business. Some of the biggest 
brand names in the world have withstood a barrage of Internet criticism for years. Favourable comment is 
effective. Coalition between the Internet Society with another and powerful form of society before a significant 
reaction takes place. Getting a person to return too a site manifests itself in new or added sales. Identifying where 
in the buying cycle the visitors looses interest, seeks more information or leaves the site. Harm to reputation as 
manifest in the Internet Sociefy, is quite specific. Equally, the range of company activities under scrutiny, affects 
the company. 

POLITICAL COMMUNITIES 

Have demonstrated a sense of solidarity, "they have nevertheless contributed to the fragmented cultural and 
political landscape of the United States..." Communications do not offer a Utopia, but they do offer a unique 
channel for publishing and communicating. Do voters simply "feel involved" or actually participate? 

The American political parties will not dare ignore the Internet in the Presidential election. 

On-line communication can bring about off-line activity is well proven. There are significant political communities 
evident in Internet Sociefy. 

CYBER MARKETERS 



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Most companies have a Web site. Most people don't visit it. It is important that Web sites are well designed, have 
rich content, are a gateway to information, and are interactive. A three month old Web site is like a year old shop 
window. 

Marketing Web sites on and off-line is imperative. The Internet Community has its own branding concepts for 
commercial presence. There is no doubt that branding is important and that it is needed to create a symbiosis 
between consumer and company on the Internet. 

GLOBAL BRANDING 

Traditional brand building has depended on visibility. There are not many opportunities for this kind of brand 
promotion among the many and disparate communities in the Internet Society. Interactive consumers are focused 
on a specific information goal, with the effect of blocking brand images. Companies have to respond effectively. 
Brand impressions are built on-line in smaller numbers on the Internet. On-line promotion has to be a combination 
of many activities aimed at a variety of communities. Ensure that each interaction with a potential customer 
impresses. A question of building and securing trust. Internet users demand excellent service. Brand equity is 
important. Good Internet brands have a number of common attributes. 

The way a company markets offline does affect its ability to market products on-line. Commonality of branding 
across the world is now important because of the global nature of the Internet. 

ACCESSIBILITY 

Search for a product or service on a 'site perceived as legitimate'. Using a search engines first. Banner 
advertisement an hyperlinks and mini-sites. On-line entities have to go offline to other media for promotion. 
Customers like to know what to expect when they go to a site and want to feel part of a community. Consumers are 
more likely to return to a site if it's identified with a brand they recognise and trust. 

Internet users access URL's they see advertised on TV. Reasons for offline promotion are the ability to foster 
brand awareness among those who are new to the Internet and those who intend to go on-line in the near future. 

CYBERBRAND OUTREACH ACCESSIBILITY 

Extend the company's Internet presence both for the company Web sites and, significantly, beyond it. Providing 
stakeholders such as retailers, dealers, distributors with the means and incentive to add to presence. 

INFORMATION 

Across the many genre of Internet presence, there is recognition that netzines appreciate access to information. 
Many sites in the commercial and not-for-profit areas of interest have a tiered approach to the provision of 
information. This process is effectively used in a progressive approach to make sites 'sticky' and to effect a 
behavioural change. Sites with rich content and a lot of information like can keep people on their sites for a long 
time. Some hyperlinks can and should offer opportunities to build and enhance the company Internet Brand 
presence. Site navigation is a big problem. 

INTERACTIVITY 

The advent of technologies has made Web sites exciting places to visit. These technologies be used to bring added 
information and content to the visitor. Inclusion of chat and discussion groups requires investment in a moderator. 
Web site needs ability to take the visitor through to the information needed and for there to be trust in the 
information provided. Well constructed and interesting sites attract an almost cult following. Websites must 
provide a contact person for customers. Important to be able to download information and contact specialists in 
company. 

BRAND PERFORMANCE 

Few provisions have been made for real-time on-line customer service and support. 

The reputation of companies on-line is being tarnished by lack of responsiveness. The Internet society is well 
aware that these mistakes need not be made. Brand values on the Internet will stay at a low ebb until these simple 
processes are properly managed. There are exceptions to the general rule of poor delivery. The top sites for the 
number of different people visiting them have substantial brand equity because they deliver. 

ONLINE PR 

On-line public relations is a boom area for the Internet. The reach of on-line news is now huge. Half of all users of 
the Internet take some form of on-line news every day. 

Most publications publish an on-line version of the printed edition. In some instances, this is a synopsis, in others 
it is a straight reproduction but, in a very significant number of cases, the on-line version is very different. The 



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MANAGING REPUTATION IN CYBERSPACE 

news vendors in cyberspace are often the big entry Portals and ISP's. Some of these publications break stories as 
they happen and do not wait until the print version hits the streets. 

Immediate response to stories is now open for all and letters to the editor come in the shape of e-mails by the hard 
disc full. 

The PR virtues of knowing the journalist and building an effective PR relationship is as important as ever. 

SPONSORSHIP MARKETING 

The Internet Society is ready made for enthusiasts. Sponsors can target an audience with great precision. Events 
and activities of the sponsored activity provide every reason for the netzine to return to the site on a regular basis. 
There would seem to be less resistance to advertising on sponsored sites than for other forms of internet 
advertising. Ability to build large databases of customer information. Provides constant data about the audience. 
Sport and cultural sponsorship on-line can be very creative. Internet tools that can be deployed. 

BRAND ATTACKS 

Brands commonly associated with pornography without the brand owners' knowledge. Use of metatags. Some 
companies have used the same device to attract consumers from competitors! Company used competitor 
comparisons to seduce search engines to bring competitor enquiries to its site. Some companies have used front 
organisations to attack brands. Software is being distributed which allows users to change the contents of a web 
site. 

CYBER COUNTERFEIT SALES 

"The Internet has become a hotbed for the sale of counterfeit luxury items". Increasing risk of losing significant 
market share due to brand confusion and devaluation of image. 

INTERNAL COMMUNICATIONS 

Every company has employees with access to the Internet. Many employees have personal access to the Internet. 

Every aspect of the company is open to comment by anyone. Need for a completely new way of thinking about 
mission, strategy, internal motivation and communication. Internet adds the dimension that the company will need 
to protect its stakeholders from the effects of the disaffected. 

Need to implement company wide belief in corporate mission, standards and objectives. To have an effective 
outward presence, managers need to look inside their organisation to secure commitment among their own 
stakeholders. Internet provides its own solution. Companies can creates their own defences and the virtual 
communities within the company become substantially self regulating. 

CYBERSTALKERS 

Information in the public domain but not ordinarily available to citizens who don't know how or where to look. 
By combining information with a network that distributes the information, it becomes possible to provide a 
citizen's guide financial inducements of politicians. This is a legitimate activity and especially so for people in 
public life. 

If it was applied to the non-executive chairmen of companies or even the corporate affairs directors of 
corporations, would it be an infringement of their civil liberties? 

This kind of behaviour falls within the realm of cyber stalking. Where to draw the line is an issue. It is not difficult 
to find out information about people. Information about employees can appear in web sites. The protection of 
employees, and in particular employees whose reputation is valuable to the company is a matter of reputation 
management. 

PROTECTION FROM CYBERSTALKERS 

Email is a favoured medium for cyber tormentors. Employees do not have to take any direct action to put 
themselves at risk. There are a lot of helpful tools and support groups. Finding out who is the perpetrator of 
malicious content is usually not too difficult. 

INVESTOR RELATIONS 

World Wide Web has arrived as a viable investment tool. Four out of five investors report that they now access 
corporate information via the Web. In a period of 24-hour, global trading, and corporations must be complete in 
any statement they issue. Global brokers, traders, analysts and fraudsters are now active in every form of 



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information provision and communication channel on the Internet. A high proportion of investing netzines already 
have a full service broker, a significant number use on-line brokerage services to read the research reports. The 
conventional rules apply very lightly. Investor Relations managers now need to be of the Internet Society. Closer 
attention is needed to the promotion of capitalism, investing , information, and interactivity, on financial pages. 

SHARE SCAMS 

There is a host of scams. Not all such sites are so safe to visit. Multi-national response needed. Some companies 
are formed and have Internet names that look very familiar and can damage reputation. 

GULLIBLE INVESTORS 

An invitation to invest comes in many guises. Unsolicited offerings abound. Some reputation influencing Internet 
citations are not to be believed. In a few hours, the share value of a company can change for no apparent reason. 
The range of frauds, from selling bogus investments, manipulating stocks, setting up pyramid and Ponzi schemes, 
operating without a broker's license is quite significant. The Internet is clearly the marketing vehicle of choice for 
con artists. 

PROTECTING INVESTORS 

The UK authorities have very little offer British citizens. One big UK company has been hit quite hard. 

THE INVESTOR SITES 

The internet has been a boon to corporate America and has brought millions of people investment opportunities 
unheard of two or three years ago. All financial institutions and Investor relations experts are in an information 
race. There will have to be a change to be globally competitive for the Internet Society. Investors seek information 
about companies and their shares using the Internet. The rules for attracting people to the financial pages. By 
creating a virtual community with an interest in the company and its shares, share values can be sustained and 
enhanced. Institutional investors like to see well designed and welcoming financial pages. The return for a 
company is measurable. 

LOBBYING 

Influencing the democratic process and government is an area where the Internet is gaining considerable force. All 
over the world lobbyists and the lobbied use the Internet. The Internet provides the complete resource. Lobbying 
groups have smart, informative, interactive sites. 

CREATING CYBER LOBBY SITES 

The UK lobbyists will be one of the great beneficiaries in Cyber Society. Creating a well informed brief is easier. 
Creating a campaign Web site is a matter of hours away. Effective lobbyists can prepare in advance. 

THE LAW FOR THE INTERNET 

There is the law and the Internet and there is an emergent Internet law. Multinational corporations attempting to 
unify national regulations relating to global electronic commerce. Reputation managers need to ensure that where 
protection is offered off-line it is applied to on-line activities. 

SERVICE PROVIDERS AS POLICEMEN 

A major industry-led initiative to reassure the public and business that the Internet can be a safe and secure place 
to work, learn and play. Consumers should have the technological means to tailor the nature of their, or their 
family's, experience. Service providers need to implement reasonable, practicable and proportionate measures to 
hinder the use of the Internet for illegal purposes. 

THE COPYRIGHT ISSUE 

Copyright is something that seems to be frequently abused on the Internet. Usually copyright is owned by the 
creator of the work, the Universal Copyright Convention. Intellectual property covers much more than copyright. 
Trademarks and Patents are also important as are Registered names (in some countries). 

OTHER INTELLECTUAL PROPERTIES 

The World Intellectual Property Organisation is responsible for the promotion of the protection of intellectual 
property throughout the world. WIPO has convened a meeting with ICANN-Accredited Registrars on Domain 
Name Dispute-Resolution Procedures. Most managers are dependant on bilateral arrangements and European 
Directives. 



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MANAGING REPUTATION IN CYBERSPACE 

PASSING OFF 

The Financial Services Authority has now alerted unwary investors. 

The Web site graphics, including your company logo to be registered where appropriate and watermarked. IP legal 
advisors and Webmasters. In some countries it is illegal to use a URL without permission. 

BEING YOUR OWN POLICEMAN 

In many ways the Internet is a combination of the Wild West and the Industrial Revolution. Every company has to 
protect itself because the rules are sketchy and policemen are few. Domain names, trademarks, unfair competition, 
copyright, making contracts over the Internet, jurisdiction, data protection, advertising, payment systems on the 
Internet, digital signatures, tax implications of the Internet, and best practice for companies in the use of e-mail, 
Internet communications and access to Web sites. 

CYBER WAR 

Internet reputation management extends beyond the commercial sphere. 

Inspired by hate and malice. Internet war is a two way street. The range of attack tools used has grown and needs 
careful monitoring. 

Have to develop the means by which we can counter violations. Many companies are now putting in place crisis 
management capability. The global Internet security software market. The Internet Society, much has yet to 
develop for us to have a clear picture. 

ACTIVISM 

Impact on management. Ability to react as fast. Criticism in the Internet Society is mostly open honest and without 
malicious intent. 

Winning the court case may not mean winning the battle. Criticism does not always adversely affect ability to 
trade. Smaller brands in a virtual community may not be so lucky. 

REAL WORLD OF CYBERSCARE 

Surge in Web sites dedicated to damaging the reputation of companies is becoming a problem for many 
companies. Is a corporate cost to rogue sites. If there is wrong doing and it is revealed through the Internet, then it 
will have a devastating effect. 

Extent to which Internet criticism damages the company. Web crawlers presenting sites that are adverse. Business 
to business buyer may prudently decide not to award a contract to a company with adverse reputation baggage. 

Mystery shopping for your site. Communities coalesce and create larger entities but in themselves have a limited 
effect. Management re-action, has cost implication. Reputation managers needs strong nerves. 

There is a dynamics of struggles between competing groups to establish their perspective as absolute truth. For 
this reason it is important to look at the actions and motivations of actors who seek to halt the progress of 
environmental groups. ' 

Internet should not be viewed as a "menace", but rather as a "challenge" for corporates. As more companies are 
exposed in Cyberspace, the more effect its on-line reputation has on corporate drivers. 

The first manifestations. When the Internet issue hops charmels. The anatomy of issues that have an effect are 
theme based. The very successful campaigns add several 'themes' together and several 'external publics'. At the 
lunatic end of the spectrum. 

MANAGEMENT 

The rules for managing Internet critics are the same as for any other form of management. Having the right attitude 
is helpful. Anticipate, master the detail of the Internet and practice. That your company will be criticised through 
the Internet is not in doubt. Investing time reading about accepted behaviour on the Internet. Recommend 
managers take note. Start monitoring Web sites and newsgroups and on-line media. Plan responses and practice. 
Simple routines and protocols. A trusted internet research firm. Managing Internet reputation is mostly about 
preparation. The demographics suggest explosion of critical comment over the next three years. 



David Phillips July 1 999 Pa ge 9 of 1 04 



MANAGING REPUTATION IN CYBERSPACE 

INTRODUCTION 

THE INTERNET INFLUENCE 

We now understand the importance of the many forms of communication that have 
been expanded into a global form by the Internet: 

One-to-one (e-mail is the fastest growing form of one to one communication 7.3 

billion US e-mails per day) 

One-to-many (Internet newsgroups and personal Web sites include over a billion 

exchanges per day) 

Many -to-many (Internet chat, Usenet exchanges and a wide variety of exchanges on 

the Internet are now usual for 50 million people every day). 

It seems strange to imagine that it was only five years ago that there was any doubt 
that 'the new media will enfranchise the individual with more one-to-one 
communication which will be easy by personal 'phones, E-mail and video 
conferencing. Or that 'person-to-person-to-machine/database communication will be 
more important, electronically managed and more global. 

This paper, taking relevant experience from round the world (and particularly the 
USA, where experience is much greater), is written from a UK perspective. Here we 
see the explosion of access evident in northern Europe and the USA two years ago. At 
the beginning of 1999, NOP research suggested 10 million people had become regular 
users of the Internet. Current projections are that, as the new millennium opens this 
number will have grown to 17 million. 

Just two years ago the Netcraft survey counted 1 million Web sites, by April 1999 it 
was 5 million Web sites. 

It is driving a knowledge explosion. More knowledge has been accumulated by the 
Internet in the last five years than in the previous 50 years. 



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MANAGING REPUTATION IN CYBERSPACE 

Source BT. 
REPUTATION 

In its most perfect form, reputation management sustains relationships with publics in 
a state of equilibrium during both evolution and in crisis. This enhances corporate 
goodwill (a tradable asset). 

The big change is that many-to-many global communication brings with it loss of 
'ownership' of language, culture and knowledge and that there is a breakdown in 
intellectual property rights, copyright and much plagiarism. This is already a major 
problem. 

News now travels further and faster and is mixed with history, fantasy and technology. 
Reputation in crisis is even more vulnerable. At a growing rate, the new media uses 
reputation as 'merchandise', 'stripped from the foundations which created it, then 
traded for pieces of silver - and at a discount' . 

Increasingly this broth threatens brands and corporate reputation and needs 
professionalism to immunise (our organisations) or doctor the effects of the brew. 

Reputation, derived from experience and third party commendation, needs to be 
nurtured in order for trust to develop. A trusting relationship, which in some instances 
can be called 'brand equity', is both a tangible asset and a corporate responsibility. 



THE INTERNET SOCIETY 

There are and have been many forms of society. Religious, capitalist, communist, 
royalist, democratic and, now there is the Internet society. 

This is a tough idea for people who see the Internet as an information resource, a 
gateway or communication medium. 

It has unique characteristics in that it is about information and knowledge and 
communication but is also global, encourages activity and exchange and involvement 
round the clock. Anyone can say and do almost anything without restraint. The extent 
that so many people use the Internet (some addicted and others on an occasion) and 
behave differently in their Internet 'life' is what makes it so interesting and different. 
There is two other characteristic. The members of this society have an uncanny knack 
of circumventing restraint attempted by conventional societies and a staggering ability 
to accept and use new technologies. 

As in any society, there are hierarchies, people who contribute and people who operate 
outside its accepted laws. The Internet Society hierarchies and laws are not the same 
leaders, laws or law makers that exist in other societies. Many Internet users have not 
heard of the Archbishop of Canterbury, the prime minister of France or the head of the 
Bundesbank. Few could name the incumbents. Their relevance to the Internet Society 
is at best marginal. Mention AOL, offering access to this society's gods, Yahoo, 
which makes and applies rules for access or Bill Gates, who has economic clout to 
affect all, and there will be immediate opinion, if not reaction. 

© David Phillips July 1999 Pa ge 1 1 of 

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MANAGING REPUTATION IN CYBERSPACE 



Established institutions are quickly marginalised by the Internet Society. But it can 
make reputations and fortunes for its own. When it works in concert with capitalism 
or democracy, it is very powerful. These issues are discussed in greater depth in the 
marketing and activism chapters. One topical case study will suffice for now. 

There are many stories about extraordinary things about the Internet. Certainly it is 
fast moving. It is said that a year in the Internet is equivalent to five years in other 
forms of commerce. 

In July 1999, BT, the British telecommunications company with a telephone line into 
almost every home in the country, said that it was going to continue to charge people 
for access to the Internet (in addition to charging for the associated telephone line 
rental and line time). Ten month old and loss making Freeserve, a subsidiary of 
electrical retailer Dixons offering Internet access for free was valued at over £2billion 
when it floated on the UK stock exchange. BT had 1 15,000 Internet subscribers and 
Freeserve 1.2 million. 

In every other form of commerce, a company has difficulty coming to the market in 
under five years. This flotation happened in less than a year. In every other form of 
commerce it is difficult achieving a share premium when you are a loss making 
corporation. Freeserve created a brand presence and market penetration of millions in 
a fifth of the time it takes most companies to achieve a 43% share price premium. 

Freeserve did use its influence in the Internet Society. It offered users of its services 
shares in the company on flotation. It informed a large proportion of the 4.63 million 
share owning Internet Society members aged 25 to 34 in the UK. They all have a 
computer at home, predominantly accept on-line news. They have a penchant for 
regular exchanges of views and opinions with local and international members of the 
Internet Society. Of course Freesrve's Internet Society influence stretched to other UK 
demographic groups and, this is the Internet after all, to every country in the world. 

The difference in thinking is between BT^ supplier of access to information and 
Freeserve giving access to a fashionable, global, free wheeling, fast changing and 
dynamic society. 

Expectations of Internet users run ahead of those who stand between them and the 
Internet Society. They also help, aid and support those people and companies who 
help them enjoy their lifestyle. 

Being of the Internet Society was dramatically important for Freeserve. Its Internet 
reputation and its promotion was masterly and offered high cash returns in its parallel 
capitalist society. 

This one small example serves to show the speed at which the Internet operates and 
that Internet reputation is important. This different form of reputation, seems to defy 
the laws of other established societies and operates in a different culture. Like religion 
and capitalism, the Internet can operate as a parallel society. Because the Internet is 
hugely driven by change, Freeserve has to work five times faster than its traditional 
commercial competitors to sustain its reputation. 



David Phillips July 1999 Pa ge 12 of 

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MANAGING REPUTATION IN CYBERSPACE 



Equally, among members of the Internet Society, traditional companies have to be 
able to react as quickly. They start at a disadvantage. They are not of the Internet 
Society. They started life in the slow, old, parallel, commercial market place. The 
reputation manager of every company now has a duty to point out and facilitate rapid 
reaction to the demands of the Internet Society. Both on-line and offline reputation 
depends on it. 

Creating an Internet reputation is harder for most directors of companies. Many of 
them have yet to find the 'on' button. They have no choice. The Internet Society is 
growing very fast. UK access to the Internet in March 1999 was growing at the rate of 
10,600 people a day according to NOP. It also reported four in ten children were 
already on-line by July 1999. 



David Phillips July 1999 Pa ge 13 of 

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MANAGING REPUTATION IN CYBERSPACE 



HOW PEOPLE USE THE INTERNET 

Most of Britain's 10 million Internet Society members, commonly called Netzines, 
spend 20 hours a week on the Internet. 

Hours spent on-line (% of users) 



9.3 1.1 8.2 



17.9 




' 14.6 



38.1 



10-1 ^2-4 n5-6 n7-9 ■ 10-20 ■ 21 -40 ■ Over 40 



(Source IRS Surveys) 

It is not all searching for information. As research by Georgia Tech Research 
Corporation^ (GVU Survey) shows. 

As in all societies, everyone is different. Some use it mostly as a work tool, more use 
it for personal information. Education, entertainment, shopping and communication 
are all applications for use of the Internet. 

Applying the GVU Survey to the UK, the primary use for the Internet is different for 
different people. 



Primary use - men 



Primary use - women 



1.40 
1.20 

„ 1™ 

I 0.80 

= 0.60 

0.40 

0.20 

0.00 



0.90 

0.80 

0.70 
m 0.60 
§ 0.50 ^ 
= 0.40 
2 0.30 ^ 

0.20 

0.10 

0.00 






<!P \<?" <i 









K.^^^ 



Activity 



Activity 



(statistics and graphs by IRS Surveys) 



Additional information about how people use the Internet at work comes from the 
Spyglass Inc^ using its Surfwatch software. It seems that one third of Internet surfing 
at work is not work related. Non work related visits to sites include news at 8.8%, 
investments at 6.7%, sexually explicate 2.9%), travel 2.5%, entertainment 2% . Time 
will tell, but the pressure to use the Internet more at work and for work will grow as 
business to business transactions escalate. 

The number of page being viewed at work is increasing dramatically. This requires 
good Internet skills. 



David Phillips July 1999 



Page 14 of 



104 



MANAGING REPUTATION IN CYBERSPACE 



Of Britain's' 10 million Internet users over 1.5 million men and 600,000 women enjoy 
interaction within newsgroups every day. Half of UK Internet society take daily 
newsfeeds"* 

In searching for information, the most common method is the use of information on 
existing Web sites and newsgroups which are already favourites for the Netzine. To 
find new information, people use Search engines. 

Research by Danny Sullivan^ shows that most people only use one or two words in a 
search (65%). Sex is the most sought subject (but is now in decline) but his report of 
searches in 1998 also identified tools to aid Internet interaction (mp3 and chat, ) as 
being important and, at the time the film Titanic was all the rage and was much 
searched for. 

Interaction and communication, (excluding e-mail ) are already significant aspects of 
Internet behaviour and are the fastest growing applications. 

This is most evident among younger women 

Women under 18 year old Hours p/w spent on the Internet 



0.030 - 
0.025 - 
0.020 - 
0.016 - 
0.010 - 
0.005 - 
0.000 - 
no-1 



d 



^V.rk 



0.02 0.04 

Shopping Entertainmf 

0.001 0.003 



^j^ 



Ii_ 



0.04 0.01 

ne-wasting Other 

0.002 0.006 



(source IRS Surveys) 

It comes as no surprise therefor, at the time of writing (August 1999) to find mp3, chat 
and ICQ continuing for the second year among the top twenty most looked for 
subjects in www. searchterms. com . This suggests that netzines are looking for tools to 
make their life in Internet Society even more interactive and they seek a wider range 
of communication facilities. Most people are conservative in their buying habits 
compared to Internet users. As part of the learning curve, Internet users become adept 
at buying and downloading new technologies. 

Newsgroup, chat, the exchange of music clips, photos and all manner of gossip and 
information is now exchanged one to one, one to many and many to many all the time. 
In the UK in mid 1999, it was the primary use for the Internet for over 2 million 
people every day. Newsgroups , e-mail discussion lists and Internet chat are very 
important. They allow anyone to seek anyone with a common interest or view among, 
currently 190 million people. These groupings can become consumer groups, pressure 
groups, opinion forming groups and political activists. 



David Phillips July 1999 



Page 15 of 



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MANAGING REPUTATION IN CYBERSPACE 

Internet shopping sites are now emerging at the top of search listings and it is no great 
surprise to find that Internet auctions such as www.ebav.com are much sought after in 
this interactive society. 

On closer examination we find the subjects people look for are very much about life 
interest. Different search engines have different search profiles. GoTo listed: games, 
travel, music, sport, jobs, software, map, chat and casino at the most sought for 
subjects. It may come as a surprise to find that these are hardly nerdish interests but 
are about ordinary daily life. And sex searches are proportionately on the decline, 
perhaps as a result of the changing demographics of the new wave of Internet users 
(18-35 women, children and older men). 

Among demographic groups with the highest access are Corporate executives. 
According to Anderson Consulting, senior executives have become wired. 99% of 
Canadian Executives have access to the Web while only 97 have access in the UK. In 
the UK 71% of executives use the Internet at least once per week (up from 51% in 
1998) but only 31% feel comfortable using it. Here is a group that has joined the 
Internet Society but does not seem to be part of it when compared to the weekly 20 
hours of mostNetzines. 

When looking at Internet behaviour, we should not forget its breadth. Search engines 
are aimed at different Netzines. www.disinfo.com . for example, offers a 'different 
spin on news stories and searches. Yahoo may be big but there is a host of alternatives 
for the 190 million on-line world-wide. 

As in all societies, different people expect and do different things. Keeping up with 
new ideas and trends is hard. The BBC announced that its 'News at One' current 
affairs programme was to be Webcast in 1999, Web enabled telephony is beginning to 
take off already. Yes, a year in the Internet Society is a very long time. 



THE OPINION FORMERS 

One in five people in the UK belongs to the Internet Society. As people become more 
experienced, they become more adepts in using Internet applications. From searching 
for sites to using newsgroups and chat, sound (music), shopping and much more. 

Most people have experienced the Internet for three years or so. People between the 
ages of 21 to 25 tend to have the most experience with a major serge of young people, 
women, children and older men coming through and a real change in the ratio between 
men and women. The only people who seem not to join the Internet Society are 
women over 45. 

Most people believe themselves experienced after two to three years and expert after 
four years^. 

This means that they are active communicators in the Internet Society. The GUV 
surveys suggest that with experience comes increased confidence in expressing 
opinion and interaction. As a result, they are shaping opinion. Already there are 
900,000 UK Netzines primarily using the Internet for communications (excluding e- 



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MANAGING REPUTATION IN CYBERSPACE 

mail). This represents 8% of all users. We can expect both an increase in numbers 
communicating and an increase in the proportion of netzines using communication. 

Who else shapes opinion? With half the Internet population taking on-line news feeds, 
it seems that on-line publications are disseminating news and the big portals such as 
Altavista and Yahoo are gateways to added information and have news and features to 
provide extra on-line content. 

Newsfeeds come in many forms. They include e-mailed news 'Alerts', streamed 
information appearing automatically on the screen (often in a 'ticker' form) as well as 
news windows and because people actively seek on-line publications. Just about every 
search engine has a news feature. 

Big Internet brands such as the BBC are also opinion forming. 

In addition, a number of corporate sites offer news about specific subject areas. 

By comparison, commercial users of the Internet are babes in arms. Their ability to 
provide news is hampered because they do not have enough Web sites and many of 
these sites are static (a brochure on the Web). Datamonitor^ reported in mid 1999 that 
2.2 million businesses were using the Internet in Europe. By 2004, they say 5.4 
million will use the .net or about two thirds of all businesses. In the UK just 34% were 
using the Internet. (Finland 45%). With 20% of the population already signed up 
members of the Internet Society, many companies seem to be leaving entry into this 
market place quite late. 

To be an opinion former, there is a need to provide up-to-date information and to 
present it quickly. In addition. Webmasters need to show how up to date their 
information is. I for one will not accept information without being able to reference 
the date it was provided. Last years' information is as old as mid '80's pop football 
results in Internet terms. 

Internet users like and seek its interactivity and yet many commercial sites take an age 
to download. Zona Research, In the USA suggest that 'merchants will loose $34 
billion in sales each year if Web sites do not maintain an average download time of 
eight seconds'. For the interactive Internet citizen, there must have been a wry smile 
when Fletcher Research announced that only 35% of commercial sites changed their 
content daily and 17% actively encourage interaction and 'feedback'. 

As in all societies, some aspire to influence more than others. They are very active and 
can be very influential with very little by way of resources. 



A STAKEHOLDER SOCIETY 

If you are not part of the Internet Society, its freedoms and access to people and 
information is frightening. Its freedoms compared to most normal society is as great as 
between the old communist states and the West. 



David Phillips July 1 999 Pa ge 1 7 of 

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MANAGING REPUTATION IN CYBERSPACE 

In repressive societies there is a form of whispered communication to pass on news 
and information. There is a parallel in Internet Society. 

I will expand on the idea that the Internet Society is made up from many communities 
but this structure means that these communities represent a variety of stakeholders. 

Individuals can be signed up to many different stakeholder groups. An employee may 
be a shareholder and local neighbourhood citizen as well as a consumer. 

In each guise, the Internet facilitates stakeholder communication. 

The component of the Internet that acts as silent lubricant is e-mail. There are an 
estimated 7.3 billion commercial e-mail messages per day. Many of them are for 
personal messages. This represents 40 e-mails for every person on-line per day. 

By any standard, this is a tidal wave of information flowing round the world all the 
time. 

Most netzines have and use e-mail access. Many people have more than one e-mail 
address (a home and a work address and sometimes more). To flash information round 
the world is simple and inexpensive. It can be sent, in the same time to dozens or even 
hundreds of recipients. 

Combined with newsgroups, discussion lists. Bulletin Boards and chat, e-mail 
provides a the means by which any person or group of people can influence events as 
never before. 

With access to information from millions of sources and the search engines able to 
find it, every organisation is now porous in that its every activity can be and is 
exposed to public scrutiny. 

Once companies had control of what was said and believed about their activities. The 
marketing and PR departments and a few directors were the mouthpiece of the 
company. No longer. Now every stakeholder has, can and does provide knowledge 
and opinion freely. 

In addition anyone can create a Web site, they can have it hosted for free, can add 
discussion lists and chat to it, include campaigning banners at the click of a mouse 
and they do. 



David Phillips July 1 999 Pa ge 1 8 of 

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MANAGING REPUTATION IN CYBERSPACE 



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The alternative site for Charterhouse school represents a group of stakeholders 

Here is where traditional corporate culture and the Internet clash. Once managers were 
gatekeepers of information. Today they have to be facilitators of information 
dissemination. There is no defence mechanism behind which an organisation can 
protect itself from the influence of the Internet. No bulwark and no bunker protects the 
unprepared or ignorant. Today, one in five employees, suppliers' employees, 
customers, shareholders, local citizen, politician and priest is available to comment 
and to act. Soon it will be two in five and then more. 

The Internet is so pervasive that it offers organisation a franchise to go about its 
business unmolested for as long as the Internet Society finds its practices acceptable. 
Indeed, if its practices are to be applauded, the Internet Society will say so. 
Unacceptable practice attracts comment, criticism, active opposition, boycott and, 
without addressing the problem, disaster. Every decision and every action is now 
debated as though it is transparent and, if it cannot be transparently defended, then it 
will be attacked. This is true for big companies and small ones. The Internet is a 
global Hyde Park Corner, 24 hours a day, every day inside the factory and office. 

At the same time the Internet has become the key to commercial success. It is a place 
to buy and sell. Organisations now have to fight for a presence in Internet Society. 
Like a sales monger in a mediaeval market, every company has to shout load and 
strong above the hubbub of a million other individuals and companies all clamouring 
for the attentions of Netzines. Every company needs a place where its stakeholders 
can find it. It needs to be distinguishable from millions like it. It needs strong 
branding and strong brand values. Internet brand equity is a goal to be sought, 
nurtured and maintained. 



ITS FAST 

Fast, interactive, open, responsive global competitive and hungry for information, 
opinion and channels 

Its such fun. Cast your eye round the public relations industry and find young, 
attractive, intelligent and successful people re-inventing their industry. In seedy 



David Phillips July 1 999 Pa ge 1 9 of 

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MANAGING REPUTATION IN CYBERSPACE 

offices filled with top of the range computers above even seedier shops, informally 
dressed entrepreneurs create the latest on the Web. Nerds are out netzines are in. 

They look to the Internet for a fast track future and they expect the Internet to be fast 
too. 

The reputation of a company that is slow in Cyber Society must inevitably slide. 
Every organisation has to use the Internet and an inadequate presence will tell its own 
tail. Who wants to be associated with company that is doomed? 



Everything about the Internet is fast. Newsgroups and chat sites talk about which gigs 
are on, where to meet and what is fun and frantic tonight. AOL and ICQ report that 
430 million Buddy List and Instant Messenger service messages and a further 330 
million ICQ messages per day. Four years ago, these facilities did not even exist! It's 
bigger than all the telephone calls in the world! As for watching television, forget it. 
Nielson data tells us that on average households with on-line access spend 13% less 
time watching TV. As for videos. . . 

In every dimension, the Internet, and faster. 

With all this fast communication, being part of it seems essential. It shapes opinion 
and makes reputations. 

The number of users is growing fast. NUA^ ,a source of much research, estimate that 
from 98 million on line in 1997 there will be 350 million by 2005. The dream is to be 
part of this potential market. To have an Internet brand presence that offers rewards 
beyond dreams. The reputation manager has to be aware that their presence is there 
and international enough and in time. 

Over 4,000 new Web sites appear each day. Per head of population, more people use 
the Internet in Finland and Norway than in the US. The UK has the 12* highest 
penetration of the population. Ten per cent population penetration was achieved by 1 1 
countries last year and will have reached 14 countries when you read this. Waiting to 
develop and Internet strategy against this rise and rise in coverage means that catching 
up becomes ever more difficult. The reputation of a company falling behind will 
suffer. 

It took 38 years for the telephone to achieve 50 million users and 2.5 years for AOL 
chat services to achieve the same number. So where is the 24 hour manned sales chat 
site? A capability no more difficult to set up than a tele-sales operation (and using the 
same computers too!). 

Consumer on-line spending at UK sites grew from $15 in 1997 to $400 million at the 
end of 1999 and it is predicted to reach $1940 by 2002 (Datamonitor). Standing 
behind a shop counter is out, being a hit counter is in. 

Web advertising started at $500 million in 1997 and two years later was over £1750 
million. Who wants to be in newspaper advertising when you can be big on the 
Internet. The speed and frenetic activity of the net forms and shapes attitudes. 



David Phillips July 1 999 Pa ge 20 of 

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MANAGING REPUTATION IN CYBERSPACE 



Successful Internet companies grow at a pace that is beyond belief compared to 
traditional organisation and become very big like Freeserve and Amazon. So no one 
makes money on the Internet. Wrong. From lingerie to wine, there is case study after 
case study of profitable e-commerce. In fact many companies now derive most of their 
revenue from on-line transactions. Hewlett Packard was one of the first to say it did! 
Their reputation soared. 

The uptake of technology by Internet users is bewilderingly fast. 

However dynamic an organisation may have been in 1998, it is fuddy-duddy to 
netzines waiting for year 2000 Web sites to download. 

One sure way to adversely affect reputation is to be seen to be slow compared to other 
users of the Web site. 

Technophobe reputation managers are now a corporate liability. The PR industry 
should be leading the charge, bullying the clients and pushing managers to get really 
confident and relevant to the Internet. 

At stake is reputation among 17 million on-line people queuing to buy Christmas 
presents on line at the end of the second millennium. 



TECHNOLOGY FOR THE PEOPLE 



From a position of absolutely no knowledge two years ago, the numbers of people 
now capable of building a Web site, taking, mixing and re-broadcasting music on-line 
not to mention applying artificial intelligent robots to search for information runs to 
many millions. 

Over a thousands of people created Freeserve discussion groups in the first three 
months of its existence. 

According to a study by NEC Research Institute in Princeton, New Jersey*^. The extent 
of the Internet which is indexed by search engines is diminishing rapidly. They found 
that only one sixth of the Web is covered. Northernlights had the largest proportion of 
the Web indexed. However this was found to be only 16 percent of the Web. Last year 
Hotbot were the largest search engine and they had 34 percent of the Net covered. 

The study found that on average it takes a new site 6 months to be indexed on a search 
engine and suggests that the cost of maintaining ever larger databases was the reason 
why search engines had relatively low amounts of content indexed. 

According to Steve Lawrence and C. Lee Giles, authors of the study, 800 million 
pages of the Web are now searchable. In 1997 that figure as 320 million. 



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MANAGING REPUTATION IN CYBERSPACE 

Finding information is getting faster and smarter. The fastest way of finding strange 
things on the Internet is to use a 'hot'. Netzines don't care that this is an artificial 
intelligent robot. They deliver the goods. These robots power a number of search 
engines and are quite intelligent. They are a boon and make information available fast. 
These intelligent engines are needs. The old form of indexing sites is finding Internet 
Growth hard to manage. 

Bots can also be used to provide information, misinformation and even damn your 
name. Members of the Internet Society can handle this. They are not scared by 
technology and they know its is capable of good and bad. 

Fast information retrieval and the ability to communicate is at the heart of the Internet. 
The reputation of engines incapable of mastering the Internet sinks in days. They now 
use multiple technologies and will quickly be on top of the problem of dead. 

In many companies and for a growing number of Internet research organisation the 
amount of information available is so big the need clever 'thinking' technologies are 
coming forward. 

Some are quite simple and are used all the time. For example natural language 
searching (as opposed to application of sense interpretations - more later) is used by 
many search engine and filters out common language such as 'and, if or etc'. This is 
automatic on most search engines (Hot Bot advanced search gives you a glimpse at 
how it works) 

Boolean is simple and in wide use (AND, NOT etc). Using it to search for specifics in 
newsgroups and listserve is very productive. 

'Agents' are the way we all 'open up' all the web pages on a web site and why the 
process needs so much band width. 

Fuzzy logic has been around for a long time. This is a form of approximation 
algorithm. It is dynamic. For a number of Internet applications it is used at the front 
end of the search process to capture near likeness expressions before it is refined by 
the next phase (see below). I like it. 

The key technology is Neural Nets. A product I am trying to get the PR industry to use 
to identify outcomes from PR activities (as well as other forms of communication) on 
corporate drivers such as sales price, volume, margins etc). An example is Cognos' 
4Thought. 

Neural Nets identify to what extent a number of factors influence each other. They 
were invented to test the outcome of nuclear explosions without really exploding one. 

Then there are applications for Baynsian logic which asks if the logical answer does 
not make sense, to what extent does it not make sense and is thereby true/untrue. 

It is these latter two processes that are used most effectively in advanced knowledge 
management software. In this way the computer 'learns' from the behaviour of the 



David Phillips July 1 999 Pa ge 22 of 

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MANAGING REPUTATION IN CYBERSPACE 

operator and readjusts the words that are to be used next time a search is made. It is an 
iterative process and ideal for big volumes of research. 

The continual refinement of the search takes the engine off down ever-narrower 
searched and is great if you don't want people to spend hours on trivia but not much 
good if you are looking for the incidence of a subject across the whole Internet. 

These Baynsian processes are an excellent product for managing large amounts of 
information such as searching the Internet for everything to do with a subject i.e. 'the 
applications of motor car engines'. It will quickly refine the search down to 'in a Ford 
Escort MKIir if that is the direction of the researcher. It will narrow knowledge 
acquired from terabits of information to manageable proportions. 



These technologies have other applications. Software like 'Electra' provide semi- 
intelligent interactive responses. You can hold conversations with this robot 
masquerading behind a graphic of a pretty girl, ask question and make statements in 
plain language and get a plain language response, (try talking to Electra 
http://robitron.dynip.com: 200 1 1 These bots are clever with language too. 54% of 
Internet users speak English^*^ (92 million) but by 2005 57% of Internet traffic will be 
in other languages. Bots can speak in many languages and some offer translation as 
well. 

Some commercial Web sites have become very interactive with humanoid bots 
answering question from prospects and customers. Responsiveness to enquirers 
through using a person accessing a database is now common place. The new 
programmes are even more helpful in collating data, (including intelligent data 
mining). The artificial but humanoid bots are becoming essential for good Web 
presence and an effective Internet reputation because that can put a 'human' face to the 
acquisition of much information and, in addition can interpret what the netzine is 
asking for. Now robots are shaping opinion too with all that may entail for the 
reputation manager. 

Full functioning broadcast sound and video is with us, virtual reality is near, cell 
phones with Internet access will be a great millennium Christmas present. Voice-mail 
(a spoken message sent like e-mail) is available. Dynamic Web pages, with moving 
pictures and pages browsing netzines can make themselves and fully Web enabled 
applications (even writing press releases without a word processing package on your 
computer) is now becoming usual. I use a fully Web enabled package every day for 
monitoring and knowledge management. 

And, with the advent of interactive TV, the range of opportunities grow. 

Cable and Wireless announced in August 1999 that it is to launch a new TV based 
Internet service for its customers in the UK and is very much of the new genre. The 
new service will allow users to access Internet, email and on-line shopping facilities 
via remote control while simultaneously interacting with television broadcasts. 
The new cable-based service offers access to 15 major UK Web sites including 
Tesco's, Barclays, British Airways and Teletext. Plans are to provide access to 100 of 
the Net's top sites by the end of the month. The company already have a subscriber 



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MANAGING REPUTATION IN CYBERSPACE 

base of 10,000 from a pilot Digital TV campaign in Manchester. As we shall see this 
is an on-line marketers dream. 

The amount of technology now deployed on the Internet is mind bending in its volume 
and capability. Being late into the Internet means we all have to catch up, but the 
technology is moving away from us fast. 



A REPUTATION FOR RESPONDING 

Maintaining customer loyalty and building a reputation for service with Internet users 
is dependant on being able to interact with people. Once having attracted a customer 
(or enquirer), many companies just fail to follow up. The Internet.com (an on-line 
publication) report of a study by Rubic Inc reported that 40% of e-mail questions to 
company sites were left un-answered. Companies loose customers because they do not 
respond^ ^ 

A further study by Neteffect shows that inability to respond actively makes consumers 
abandon purchases. Its like two thirds out of hundreds of people being halfway round 
a supermarket with a trolley full of shopping, then abandoning their purchases in mid 
aisle. 

Imagine if this were to happen in a real supermarket. Not only would it be 
commercially silly, it would have a direct impact on the reputation of the company. 

Which supermarket CEO would be allowed to survive such a scandal? How soon 
before investors ask why customers abandon on-line shopping trolleys and never 
bother to go to the check-out. 

Reputation managers must ask the question about an ability to follow up. 

Which reminds me, e-mails to Government Ministers get lost in the post'. 

I can't quite imagine John Prescott saying 'let them eat cakes' but the government does 
not seem to be in-touch with Internet reality. Its sites are slow, boring and difficult to 
navigate and never answer e-mails. What do they want? Letters! 

Creating and re-creating the value of intellectual properties and brands in a shape and 
form that is acceptable to the Internet Society must now be a major issue for all 
company managers. Abandonment of a site where the visitor has committed to be 
interactive (even collect products to buy), is seriously damaging to reputation. 

It leaves visitors frustrated and they act out of character and criticise the company (or 
government in my case). 

Dynamic Internet reputation management in these fast moving media, is rapidly 
becoming significant. Up to now, companies have been busy getting their Web sites 
up. Now they have to be able to respond to the interest they create. In addition, as 
people use interactive Internet, the response to advertising and to consumer enquiries 
has to improve, be swift, and customer focused. If not consumers will go away and 



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MANAGING REPUTATION IN CYBERSPACE 

will be less inclined to come back in the future. In some cases they will become 
consumer activists in newsgroups and chat sites. 

NEWSGROUPS, CHAT AND CYBERCAST 

Internet newsgroups, chat and Newscasts are nice places. They are form of opinion 
forming communication in cyberspace. This is where ordinary people talk about 
ordinary things. It is a place where anyone can ask if there is a kindred spirit with the 
same interests and because the Internet is so big, there always is. 

Jim, an American who lives in Minnesota, watches the UK TV Soap East Enders. Last 
May, he was baffled by Huw's accent. His on-line friends John and Jacqui told him it 
was Welsh, and in the conversation the two of them discovered they lived near each 
other, one in Didcot and the other in Oxford. 

An every day tale of the Internet. 

The conversation occurred in a newsgroup (rec.arts.tv.uk.eastenders). It was one of 
many millions of such conversations each day. 

According to research by the Georgia State University, one of the primary uses of the 
Internet is for communicating with others. Over 30% of netzines use the Internet for 
communication excluding e-mail. Importantly, the higher proportion using the Internet 
this way are among the under 25's. This includes uses such as newsgroups and Internet 
chat. 

With 10 million active Internet users in the UK, something like 3 million people use it 
primarily for communication and many more use it for communication as a tertiary 
application. Imagine what this represents among the millions already on line in the 
world! 

Significantly for corporate reputation managers, not all Internet communication is as 
cosy as the John and Jacqui story. Indeed, a high proportion of use is to find 
information about products and services and to use the experience of other consumers. 

It is here too, where reputations are made and marred. 

The reputation of products and brands are much maligned in newsgroups. 

Consumers go to newsgroups to find out about products and service from other 
customers. They soon find out which companies and which products to avoid. 

This reputation building process through Internet communication channels is 
significant and growing all the time. 

The Internet is now a big bucks public relations issue. In every corner of the Internet 
there is disinformation. Some innocent, some amusing, some malicious. 



David Phillips July 1999 Pa ge 25 of 

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MANAGING REPUTATION IN CYBERSPACE 

Most users learn this at an early stage, come to rely on trusted sites and on-line friends 
and take the rest with a pinch of salt. But this is a presumption. Not all users are 
grown up, some are patently old enough to know better and still get caught out. 

But it can get serious and very damaging and malicious comment can spread like wild 
fire. 

In March 1997, a well known US fashion designer. Tommy Hilfiger was accused of 
making racist remarks during an appearance on "The Oprah Winfrey Show." Tommy 
Hilfiger denies ever making such remarks. This is not hard to do. Both he and 
spokespeople for Ms. Winfrey maintain he has neither appeared nor been asked to 
appear on "The Oprah Winfrey Show." This did not prevent a mass of comment in 
dozens of newsgroups pointing at Tommy Hilfinger and branding him as racist. 

Even the most exhaustive public relations campaigns cannot easily refute rogue 
information allowed to spread too long. In spite of well-publicised responses the 
newsgroup talk on-line still disparages Tommy Hilfiger' s supposed remarks to this 
day. 

The key for everyone is to be able to find disparaging comments fast and put the 
record straight. 

The role of Internet Reputation Managers in managing commentary in newsgroups is 
significant and is a new area of public relations. 

But it's not that easy. Interjecting a posting into a newsgroup is akin to interrupting a 
conversation in a pub. Quite often it can be taken as an intrusion, rude and offensive. 
In fact, there is evidence that such intrusions can have the opposite affect that a 
company may want to achieve. 

A number of companies have thought that it was effective marketing practice to post 
unsolicited comments and advertisements and puffs into newsgroups. All the evidence 
suggests this is resented by users. Furthermore a whopping 84% of people dislike 
getting unsolicited e-mails. Its called spamming. A survey by the Gartner Group^^ 
found that e-mail users are not only annoyed by unsolicited commercial e-mail or 
spam, but many blame their ISP for the problem. 

The survey, commissioned by Brightlight ^^ a maker of anti-spam products, found that 
more than 90 percent of users receive spam at least once a week, and almost 50 
percent get spammed six or more times per week. 

To be effective, you have to use the right netiquette. For those starting out there is a 
lot of information to help and I have provided a list of some of the more helpful 
sources^"* . 



THE NATURE OF NEWSGROUPS 

Most people do not have any idea as to the coverage, items or, citations, that appear 
on the Internet. 



David Phillips July 1 999 Pa ge 26 of 

104 



MANAGING REPUTATION IN CYBERSPACE 



Most major companies are mentioned in Web pages or on newsgroups every day. In 
many cases this is in discussion groups, bulletin boards and chat . Some of this 
exchange is in private sites, a lot is in public and a large proportion is unmoderated 
and they are almost impossible to monitor manually. With the current growth of chat 
and the mass use of newsgroups, understanding communication in Internet Society is 
as important to the reputation manager as reading newspapers is the traditional PR 
person. 













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In the UK, 70% of Internet users spend between 7 and 40 hours using the Internet each 
week (IRS Surveys). 



0.70 
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Time spent by women 




<18 years women 
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25-34 years women 
-55+ years 



At the beginning of 1999, 1.5 million men and 700,000 women used newsgroups 
every day. 



David Phillips July 1999 



Page 27 of 



104 



MANAGING REPUTATION IN CYBERSPACE 



1.80 
1.60 
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Postings of this nature take a number of forms. The majority are a simple exchange of 
gossip and interest. Some are amusing and fun. A proportion are 'honest criticism'. 
Others are malicious and are designed to spread damaging rumours. 

Newsgroups are noted for the speed with which they can spread information and can 
sometimes be very dangerous with significant reputation implications. 

Bill Comcowich, CEO of Ultitech, the company which provides the CyberAlert^^ 
Internet monitoring and knowledge management service explains the nature of the 
Internet very effectively: 

'The Internet,' he says ' changes the genteel rules of journalism. Everyone is a 
publisher but no editing is required, there is no need for professional training. It has 
become a new voice and new media for rabble-rousers, outraged customers and 
corporate critics. 



David Phillips July 1999 



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104 



MANAGING REPUTATION IN CYBERSPACE 

'Anyone can smear anyone else. This sophisticated form of communication adds a 
global and instantaneous dimension to the traditional pamphleteer or Speaker on Hyde 
Park Corner. The Internet communicator reaches 190 million people with Internet 
access and their message is always available, day and night, to everyone. They create a 
'buzz' on the Internet'. 

Even the headers can be misleading or can malign a company. The potential for 
besmirching corporate reputation is considerable. This can lead to loss of sales and 
even share values. They tend to increase consumer complaints and distract executives 
who have to deal with them. 

Fake Web sites, newsgroups and chat rooms frequented by activists, the unhappy 
consumer, disgruntled former employees and the equivalent of the pub bore, give rise 
to damaging rumours which cannot be contained within the company and are 
expressed in a wider forum. It has to be said that the expression 'potential' needs to be 
underscored. 

A decade ago, the populations of the West already learned more from watching 
television, listening to radio and interrogating electronic databases than talking to 
friends, families and colleagues. Now a significant proportion of communication time 
is via the Internet which is why it has become important to the reputation manager. 

On 8* August 1998, a London School of Economics student asked, via a news group, 
if it was sensible to use the Nat West PC based banking service^''. This case study 
shows an example which is replicated for most major companies and brands every 
day. 



This user group is called UK local London. It is worth reading the posting in full. It is 
an interesting case study (and no one should be judgmental about the subject 
companies in the case study - who was, in 1998, any better at Internet reputation 
management? Who is better today?) 



Author: 


Stuart Pearce 


Email: 


stuart.pearce@pearce3.demon.co.uk 


Date: 


1998/08/23 


Forums: 


uk.local.london 


view for book 


iiarkinq ■ text only 



author profile 

email reply 

view til read 

post new ■ post reply 

subscribe 



>I was somewhat surprised to find out that the MATHEST does not provide 
>PC-Hor[ietianh:ing for individual accounts, only for companies. It is 
>otherwise a standard and completely free service in any bank here in 
>Denmarh:. 

>I will appreciate any response. Thanks in advance. 

>Leo 

If you want free PC banking, try FirstDirect. They're a telephone banking 
service, and a subsidiary of Midland Bank. I've never had any problems with 
them at all, and their service is free even if you go overdrawn. [Within 
limits, of course.) 

As for HatHest, I wouldn't bank with them if they were the last bank in the 
universe . 



The original posting from Leo was in the critical period when students make decisions 
about banking services. His audience was a significant one. This was an innocent 
question, one of tens of thousands on the Internet every day. 



David Phillips July 1999 



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MANAGING REPUTATION IN CYBERSPACE 

This was an opportunity for the banks, to respond and build a brand relationship with 
Leo. Here the bank might supply ready access to an answer which explained the range 
of services and their benefits which are available for a Danish Student coming to the 
London School of Economics to take a degree course. 

Like most companies, the banks in question did not know of this posting or those that 
went before it. Often known as 'gripe sites' following newsgroups is an interesting 
form of reputation management and, in the right circumstances an opportunity to both 
protect reputation and enhance virtual presence. 

The response from Stuart is even more illuminating. He explains that he uses another 
service, a telephone banking service. He also identified a number of the benefits of 
their service. Was this an opportunity to gain competitive advantage? 

First Direct, Europe's first and largest virtual bank which adds 12,500 new customers 
to its current base of 750,000 customers every month, may have believed that the 
virtual audience of one newsgroup was not the best return on investment compared to 
its other promotional activities. At the time (1998) the embryo Internet did not offer 
much of a return and most financial institutions were not really geared up to take 
advantage of Internet postings^l 

Here was a potential customer, Leo. He was going to make a decision about banking 
that would stay with him for life. His decision was worth a lifetime of bank charges 
and interest revenues to the banks. The banks did not know about a potential customer 
and so did nothing and, indeed had no strategy in place. Today (1999) they have and, 
in addition are offering Internet enabled banking. Much of industry has not caught on 
quite so fast. 

If one follows this thread there are other postings and, as time went on, even more 
potential customers appeared. 

A lot of people commented about the product in the same news group. They have in 
common their news group and an interest in the product. In addition some of them 
have an interest in buying this kind of product or are current or recent users. 

Among the respondents are satisfied customers of a similar product but a different 
brand. 



David Phillips July 1999 Pa ge 30 of 

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MANAGING REPUTATION IN CYBERSPACE 



Newsgroup 

uk. media. tv .mlsc 
lik.inlsc 
uk,iiilsc 

lik . consultants 
uk.net 

demon. service 
uk. sport . cricket 
uk . JLo c al . london 
uk . JLo c al . london 
uk . people . teens 
alt .music .manics 
alt .visa. us .marri 
rec . sport . cricket 
uk . lo c al . london 
uk . consultants 
alt . technology . sn 
camp . sys . amstrad. 
uk . lo c al . london 
limi. informatik.pn 
uk . consultants 
alt .politics . ec 
alt .politics . ec 
rec . sport . cricket 
uk . consultants 
soc . culture . euros 



Mews group 

comp . sys .mac . advocacy 

uk. gay-lesliian-lii 

neirs . admin. net -ahuse . 

uk. rec . cars . tvr 

uk.misc 

uk . local . london 

camp . sys .psion.progra 

alt .business 

uk . c onsult ant s 

uk. finance 

uk. legal 

soc . culture . europe 

uk.misc 

uk.misc 

alt .ph.uk 

alt .ph.uk 

uk . local . london 

uk . local . london 

uk . local . london 

rec . sport . cricket 

uk . local . london 

uk . local . london 

uk . local . london 

uk . local . london 

uk . local . london 



arguments with them. 



There are people interested in the 
debate - they are visible and are 
making comments day by day. 

In addition there is an audience 
with a common interest (that is 
why they visit the newsgroup) 
but we do not know who they are 
because they are not pro-active 
contributors to the debate. They 
may be opinion formers, 
consumers or just interested 
observers. 

More complications are added 
when the debate migrates from 
one newsgroup to another. 

While the first group was 
London-centric, a number of 
their subscribers had other 
interests and subscribe to other 
interest groups. They also 
brought the story and the 



The story spread to a wider audience and found a resonance with the interests of these 
new publics. This is not novel, this is how the Internet works. Your company, product 
and brand is visible all day, world-wide and is being talked about all the time. 

This case study identifies a number of important aspects about Internet 
communication. 



It can be seen that this is a public forum. 

People who use it are consumers. 

The process is swift 

One of its applications is an aid to purchasing decisions. 

The numbers using the news groups are considerable (and there are more who read 

the content but are not necessarily moved to contribute their views). 

The users are educated and articulate 

They have, and express opinions 

They have a gypsy-like quality and will take a topic from one news group to 

another. 

These opinions can be very damaging to corporations 

They can also be helpful to corporations 



People use the Internet to solve a specific problem. Often this is to help with a specific 
purchasing decision. For the PR department, there is a major opportunity for 



David Phillips July 1999 



Pa ge 3 1 of 



104 



MANAGING REPUTATION IN CYBERSPACE 

newsgroup and e-mail marketing. At the same time there is an interesting opportunity 
in protecting, developing and enhancing reputation and brand values. By this, I do not 
mean, necessarily, becoming involved in another person's conversation. That too may 
be the route to disaster. 

This is at the cusp of the purchasing decision. Positive responses are very powerful, 
negative comment is unhelpful. 

Ignorance of the Internet and the numbers of people using it, is no longer excusable as 
usage increases and we need to learn how to develop techniques to aid reputation 
building in this environment. 

This LSE student started a substantial response. Taking this case study as an example, 
there would appear to be a number of time critical and consumer significant actions 
that need to be addressed. . In this case, it is possible to trace 3 1 postings in two 
different news groups involving 18 different people all within 14 days of the first 
innocent question. The subject migrated to over 30 newsgroups in the following two 
weeks. 

In another study by IRS, during June 1999, in only three discussion groups 
(support. asthma, uk. local, surrey and games. minitures) there were 3500 comments on 
quality pertaining to UK supermarkets. The subject of quality associated with named 
supermarkets appeared in 36 UK newsgroups. By extrapolation, it might be said that 
there were 30,000 public comments available for the whole world to see about the 
quality of UK supermarkets. 

In addition there was an audience who did not actively comment in numbers maybe 
vying with the Sun newspaper in total audience size. By any measure this represents a 
sizeable number of people prepared to make a comment and elect to spend time 
reading such comments. A sample of the postings showed 63% of commentators 
recommended a particular retailer and 37% who were critical. Notably, some retailers 
came out well ahead of the others with little criticism and much praise. 

Whether a company should react and how are important questions. It takes a brave 
manager to say to the Board that there are lessons to be learned from these events. 
There is no excuse for not being brave. This is a form of consumer polling, 
unprompted and largely spontaneous, reputation analysis by the public of a company, 
its products or services. Monitoring this level of consumer empathy provides a close 
insight into the competitive advantage of the company and its brand equity in the 
Internet Society. The reputation manager can now develop the tools by which 
reputation can be dynamically measured and a corporate response (primarily off line) 
can be formulated. 

The consumer issue is time critical and in the time the subject is visible, buying 
decisions have been influenced and the contract has been made. We have seen 
evidence of the speed that the Internet operates in other case studies. Thus the next 
lesson we learn is that corporations have to be very much more responsive and faster 
to respond than in the past. 



David Phillips July 1999 Pa ge 32 of 

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MANAGING REPUTATION IN CYBERSPACE 

The question of how an organisation can and should respond is one that exercises 
many minds. The issue is one of psychology as much as anything. And it is not easy to 
apply. Newsgroups are virtual communities in their own right and each one is 
different (see Internet Communities below). A response for one group may be totally 
inappropriate for another. 

Some companies spend a great deal of time and effort 'seeding' newsgroups with 
information about products they have for sale. One major retailer used to talk about 
new products in a variety of newsgroups using (not so heavily) disguised people 
making comments about the products. 'Have you tried the new perfume at XXX store' 
was one comment 'it's worth trying'. Within a few days there was a blizzard of 
responses, many saying that it was terrible! 

'Seeding' takes on other forms where companies overtly or surreptitiously invite 
newsgroup members to visit their store or Web site (using a hyperlink). The score rate 
for this kind of activity is quite high but the cost of attracting a few dozen visitors in 
this way must be seen to be a high cost marketing process unless part of a campaign to 
attract people to a particularly 'sticky' site or influential, company run, user group/chat 
site. 

'Seeding' newsgroups is not the same as spamming where a company overtly sends 
messages to all manor of newsgroups (as well as to individuals). In a high number of 
cases there is a marked resistance to such activities and it upsets Internet communities 
a lot. Selecting the community or news group that will accepts this form of promotion 
is one requiring newsgroup experience and skill. 

A number of companies are transparent about their activities in newsgroups. They say 
that they note comments about themselves and respond directly. The 'Big Brother' 
aspect of this form of response worries users, who like to believe their newsgroup is 
for like minded people and not there for eavesdropping by outsiders with, at best, a 
casual interest in their virtual community. 

There is another aspect of how this form of response is manifest. Quite often and quite 
innocently, employees and other stakeholder, already active or just on the prowl come 
across critical postings and take up the cudgels in defence of their employer. Almost 
always it ends in a wrangle of no help to the individual or the company. Stakeholder, 
need to be aware of the potential difficulties they can meet and the effect they may 
have. 

Perhaps the best examples of how organisations respond is seen when companies 
sponsor their own newsgroups (some inside their Web site, others in specific freely 
available Listserve and Usergroups) and others in newsgroups where there is plenty of 
evidence of competitors debating relative merits of products and processes. In many 
ways this serves the Netzine culture well. They enjoy the exchange with an Internet 
savvy employee and go to the site to find out more. In addition, in other newsgroups 
they act as ambassadors, inviting other members to join the debate. This is a cost 
effective approach with consumers having a specific interest congregating in one 
place and one that does not (usually) upset Internet communities. The computer 
companies and Microsoft use this approach to good effect. 



David Phillips July 1999 Pa ge 33 of 

104 



MANAGING REPUTATION IN CYBERSPACE 



Mess 


ages 1-25 of exactly 37 matches for search SIMCO: 








Date 






Sutolect 


Newsqroup 


Author 


1 

2 
3 

5 
6 
1 
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9 
10 


98/09/25 
98/09/25 
96/09/25 
98/09/24 
98/09/24 
98/09/23 
98/09/23 
99/09/21 
98/09/11 
98/09/10 


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conip . arch, embedded 

coiiiE.os.iniis 

com^ . arch. embedded 

no.bil 

coni^ . arch, embedded 

conip.os.cpm 

coiiiE.os.iniis 

coni^ . arch, embedded 

aJLt. Indus triaJL-com^ut 

alt . Indus trial . com^ut 


Jack Peacock 
Jack Peacock 
Jack Peacock 
Torkel Lodberg 
Jack Peacock 
Jack Peacock 
Jack Peacock 
Jack Peacock 
Harry H Conover 
acctmgr 


Re 


i:s28-e (vms 7.1) tnll no 


Re 


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Re 


Horrow Micro Iiecision st 


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11 


9G/09/22 


020 


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coni^.os.Tnns 


Jack Peacock 


12 


98/09/19 


020 


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no.bil 


± <de±aultuserG 


13 


98/09/17 


020 


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TJTD: S272 or HEC 765 Han 


coniE . arch, embedded 


Jack Peacock 


1^ 
15 


9G/09/12 
98/09/11 


020 
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com^ . arch. embedded 


Jack Peacock 
Jack Peacock 


upqrade TAQ 


coni^.Ds.vins 


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98/09/10 


D2D 


Re 


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alt . industrial . coir^ut 


Jeff 


17 


98/09/10 


020 


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alt . industrial . com^ut 


Ken 


18 


98/09/02 


020 


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BUENA VISTA SADDLE- (NEED 


rec. equestrian 


Evelyn Crouch 


19 


99/09/01 


D2D 


BUENA VISTA SADDLE- [NEED IWF 


rec .equestrian 


LSolek 


20 


98/09/11 


019 


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96 serial ports @ 230400 


coin^ . arch, embedded 


Jack Peacock 


21 


98/09/09 


019 


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coni^.sys.dec 


Jack Peacock 


22 


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coni^.sys.dec 


Jack Peacock 


23 


98/09/07 


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conip.os.iniis 


Jack Peacock 


2-5 


98/09/04 


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Such companies have a product manager who spends his day answering technical 
questions raised by technicians all over the world. While this is effective, and the 
numbers of visitors can be very high (see the SIMCO example above) the person 
involved needs to be very competent. In addition they need to be trained to react as 
reputation managers as well as technicians. 

The numbers of technical questions that can be answered by product managers are 
very broad and are most helpful for customers. This work is appreciated by the 
customer and if well done, with a dedicated and committed product manager, builds 
strong consumer relationships. This approach can work just as well for consumer 
activities and there are some excellent examples. 

However, when this person sees a posting critical of the company, there needs to be a 
quick response to ensure that the reputation of the company remains intact. Most 
often, such responses are off-line and need to be managed inside the company. 

Knowing what is said outside a company user group allows the company contributor 
to respond and use the visitors to his site to go out and answer the points raised. 

The role and authority will ensure that: 

• Commercial opportunities are not missed. 

• Critical comment is managed 

• That there are technically competent people available to answer consumer issues 
in public forums 

• Corporate and marketing initiatives are not clumsy and do not threaten the brand 

• The response to Internet users is swift 

We do not know how many people see these postings for each of the many thousand 
newsgroups, but there are a number of sources including IRS and NUA Internet 
Survey s^^ that give a clear view of the numbers using Internet communication and, in 
the UK, this runs to millions every day already! 



CHAT 



Rapidly overtaking newsgroup exchanges, chat is now a very popular form of Internet 
communication. The benefit is that users can exchange information in public in real 



David Phillips July 1999 



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MANAGING REPUTATION IN CYBERSPACE 

time and the downside is that there is no opportunity to leave a message one day and 
see responses to it later. Its faster than e-mail! In addition private chat networks are 
available for householders and companies to carry on private real time conversations 
through typing information on a keyboard. 

According to Internet Research Group^^, chat sites regularly feature in the top 25 most 
visited sites in the home and with 128 million English speakers^" using the Internet 
(54% of all users world- wide^^) this is a very global activity. 

Where newsgroups have an influence that is very fast and can influence events in a 
matter of hours, chat can have an immediate effect and subjects are discussed at the 
speed of light. 

The relationship between people in chat rooms is quite close and personal with 
comments made in public to other people 'present' at the time. In addition and 
concurrently, private conversations are held. A reputation can be shredded in an 
instant and some of the information changes the fortunes of companies quite quickly. 

In an investors chat room, stock market tips fly fast. Some people establish 
considerable reputations and are followed by a host of Stock chat groupies, while 
business groups seek commercial opportunities all at the same time. 

For the financial affairs manager this is a real challenge and many monitor sites (and 
contribute). But the range of chat sites is enormous and monitoring them all, all the 
time is not possible without the appropriate technology. 

The significance for reputation management for these technologies is the ability for 
the consumer and the opinion former to multi-task. 

The ephemeral chat is by no means untainted. Field Fisher Waterhouse' Internet law 
expert Michael Chissick, cites examples of clients asking him to take action against a 
particular chat area. He claims that this is rarely worth attempting because the 
perpetrators are infrequently wealthy enough to make the process worth undertaking! 

The most common recourse is a letter to the offending site's service provider or the 
content provider involved to ask them to remove the offending material. This, he says, 
they are happy to do because they do not want the problem to escalate. But he warns 
that the determined 'offenders' will almost always win. 

"The problem," he says, " is that you can stop them once but then they will move to 
other chat areas and, if need be, post information to Web sites in the US or Holland." 
This comment is several months old. Since then the number of chat sites has grown 
from a few to thousands and continues its explosive growth. 



CYBERCASTING 

The BBC broadcasts its mid day current affairs programme ' The Word At One' 24 
hours a day from its Web site. 



David Phillips July 1 999 Pa ge 3 5 of 

104 



MANAGING REPUTATION IN CYBERSPACE 

The Internet becomes progressively more of a multi-media experience with video, 
audio, interactive data-bases and 'bots', those linguistically clever Internet robots (see 
above), as part of the mix. There are indications that it will be even more interactive 
with people making and acting on purchasing decisions at the same time. 

Web enabled telephony is already popular and a lot of people listen to music served 
up via the Internet while they do other things, including working on computer. 

Telecasts and soundcasting over the Internet brings other advantages in that people go 
on-line to Web pages (and buy products) when prompted by broadcasters. 

The active Internet PR person is already working as getting coverage in on-line 
broadcasts and this will become more relevant. The only drawback being the numbers 
of broadcasters and lack of significant information about audience demographics, and 
life interests. 

According to a study by Arbitron NewMedia/Northstar of US Webcast audiences, 
"Webcasts trigger significant interaction — almost 70 percent of on-line tuners click 
for content information and almost 60 percent click through for advertiser 
information, while tuned to streaming media programming." 

In the USA, almost half of the Webcast audience buy advertised products on-line. 

"With our latest streaming media study, we have shown that people are responding to 
the ads and conducting e-commerce while listening to audio and video programs on- 
line," said Greg Verdino, vice president/general manager. 

This is an interesting departure. For much of the Internet, advertising tends to get in 
the way of users needs. In fact banner advertising, though effective has not been the 
boon many believed it would be. For Webcast users tuned to television and radio 
stations streaming live programming, advertising provides an immediate opportunity 
to buy product on-line. 

It also provides an opportunity to interact with the programmers and Webcast provider 
and to react to news, events and opinion using a host of communications channels on 
the instant. Reputation can be changed through reaction to these broadcasts in 
minutes. 

The new media is not innocent and some Internet Society members are not all they 
suppose to be. There is a case for examining how reputation in cyberspace can be 
enhanced and protected. 



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THE INTERNET COMMUNITIES 

The Internet Society is made up of many thousands of communities. Because there are 
so many, and most only comprise a few people at any one time (most have only a few 
regulars). Being able to influence them is very time consuming and costly. 

In addition they take many forms. There are the obvious types such as the newsgroups 
and chat sites. In addition there are the usergroups and bulleting boards. Furthermore 
there are the people whose primary interest is in a single site and interaction takes the 
form of e-mail exchanges with the site owner (nice if they are consumers). 

Most people are active in a variety of groups and many will be involved with more 
than one discussion, chat or Web site. 

There are Web site based communities such as the company Web site, a small part of 
the Internet. 

Members of Internet communities have a commonality of interest which is the glue 
that holds them together. 

In his contribution to the BBC's on-line Communities day in June 1999, Internet guru, 
Howard Rhingold^^ said: 'Structurally, the Internet has inverted the few-to-many 
architecture of the broadcast age, in which a small number of people were able to 
influence and shape the perceptions and beliefs of entire nations. In the many-to-many 
environment of the Net, every desktop is a printing press, a broadcasting station, and 
place of assembly. Mass-media will continue to exist, and so will journalism, but 
these institutions will no longer monopolise attention and access to the attention of 
others.' 

For some, notably John Hagel and Arthur Armstrong, the two McKinsey consultants 
who published a book in 1997 called "Net. Gain" there is a commercial opportunity to 
be gained from these so called virtual communities. They postulated that there were 
hundreds of millions of dollars are to be made in aggregating virtual communities. 
That is in creating corporate virtual communities. In a sense they are right in that 
'sticky' sites (that is Web sites that bring netzines back to the corporate site time and 
again) create Internet communities. The investment needed to create 'stickiness' is 
massive and for some, often in commercial terms fleetingly, is real. A not-for-profit 
example (albeit with massive broadcast promotion) is the BBC. The reason the 
Armstrong Hagel hypothesis is flawed is the range of communities that exist and will 
continue to exist in the Internet Society. 

Thus the neighbourhoods near the factory and office, employees, vendors, customers, 
shareholders, governments, politicians and so forth are communities in the traditional 
and, potentially, the Internet Community sense. 

But in Cyberspace there are other communities. These are people with common 
interests that may have an effect on the corporation. Interests may be in a profession, 
hobby, life interest or religion. In addition the relationship a company may have 



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through affihation such as a trade organisation, pressure group or market place may be 
influenced by the Internet Society and in turn the organisation. 

The relationship can be even more tenuous in that an Internet community may have a 
loose, permanent or, frequently, temporary coalition with virtual communities with 
different agendas. 

Frequently, members of one group will carry information from group to group and 
will also empower members to form a third, mutually interesting groups where the 
interest, or agenda, is common. 

In society at large and throughout time this dynamic was possible before the Internet 
but today it is more potent, powerful and bigger. Interest of individuals, hitherto of a 
very personal nature can now be shared with others in communities of scattered 
enthusiasts round the world. 

The nature of Internet communities is change with groups forming and fading like 
boiling clouds on a summers day. 

Internet community relations management is now a bigger and more pervasive form of 
community relationship affairs than before. It affects the company more than ever 
before and communities are better informed and able to communicate more 
effectively. The extent to which the Internet aids democracy and infringes on the value 
of copyright are important maters for consideration and the effective Internet 
Reputation Manager will at least visit the significant discussions on the matter. They 
are important for all companies^^ 

Virtual communities, born from common interests and aspirations of their members 
can be very closely associated with a corporate site. 

However, if, as part of the Internet presence, a company incorporates a discussion 
group or chat rooms there is a cost in planning effort, attention and time. The extent to 
which there is affinity with netzines , the rules to use, means for moderating (such as 
what topics can be touched on, what behaviour is acceptable and so forth), need 
careful planning and the means to continually bring new people and new interest to 
the community. 

The relative anonymity of communities (chat, newsgroup, bulletin board etc) means 
people tend to say things they would normally not articulate. 

Rheingold expresses it well: 'As the Net has grown, the original norms of netiquette 
and collaborative, co-operative, maintenance of an information commons that 
enriches everyone have been assaulted by waves of clueless newbies and sociopaths, 
spammers and charlatans and loudmouths. Maintaining civility in the midst of the 
very conflicts we must solve together as citizens, isn't easy.' 

Thus, the means by which a company may want to enhance its reputation by including 
discussion and discourse on its site can backfire dramatically. A guide to how to host 
a community on line is published by Rheingard^"^ 



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So what do these virtual communities look like? 

NEIGHBOURHOOD COMMUNITIES 

In north Oxfordshire lies the ancient market town of Banbury. We know it for the 
rhyme 'Ride a Cock Horse to Banbury Cross'. It is a strong and wealthy community 
set in the rural south midlands. 

Like all communities, its companies, community institutions, the local council, clubs 
and societies are all represented on the Internet. Individual citizens have their own 
Web sites, the local paper, the Banbury Guardian is seen in Cyberspace too. The 20 or 
so commercial sites are more than matched with personal and community sites among 
the 30,000 households and 12,000 netzines. The town, once famous for its cattle 
market, now has a virtual auction in the newspaper's site. Its folk chat to each other 
and talk about visits to the local Morrisons Supermarket and the wider world in 
newsgroups as divers as competition communities to ferret racing (yes this is a rural 
community). 

Friends of the Earth identify a local factory as being on its list of companies with 
emissions of Carbon Monoxide and other gasses. 

Local issues are debated hotly and activists attempt to bring netzines from all over the 
world to their aid seeking expertise to support their arguments and provide helpful 
information ( the big topic was railways when I last took a virtual visit). Virtual 
Banbury buzzes. Just like all neighbourhoods. 

It follows that a local company needs a local presence and effective community affairs 
would create a transparent view of company and community for Internet visitors. This 
entails hyperlinks between the company sites and the local neighbourhood sites to 
ensure there is a noticeable link with its physical environs. 

Influencing the local community without taking into consideration the virtual 
community would seem to be risk ridden. 

For companies that participate in local events, employ local people or which have 
issues of interest, a Web presence would be a helpful aid. Community relations 
managers will have ready made Web (micro) sites that can be put up at short notice to 
handle local, industrial or commercial issues as part of their commitment to the local 
and virtual communities. 

There is a caveat to this form of involvement. It is easy for companies to become very 
excited by what is expressed in Internet discussion. In particular, companies are 
sensitive to criticism. The key elements to note are that these criticisms are a 
manifestation of opinion, often only minority opinion. That it should be in public may 
be of less consequence than a conversation in the local pub but with the potential of a 
global audience (should that audience be interested in the first place). The second is 
that such discussions are an indicator of opinion, need to be taken into account, but 
not necessarily a matter leading to a corporate driver. 



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There is another good reason for sustaining a local presence. Maintaining a link with 
local communities through local stakeholders is a very helpful means of enhancing 
virtual presence. If the local retailer can enhance its presence through services 
provided by your company, there is the dual advantage of closer links with the means 
of distribution and its consumer base. 

This year (1999), the BBC announced that it will develop a local community 
'gateways' and was exploring how this can be done as this book went to press. It is a 
gallant idea. It will by no means replace existing or future local contributions, 
discussion lists or local involvement in local issues or sites. 

It will be important and will compete with local newspapers and other local gateways 
for people who want to talk to each other using the Internet. The relevance of these 
local communities and the local gateways is the element of trust. As people become 
more used to using the Internet, they seek evermore trustworthy partners for Internet 
interaction. In so far as the BBC or the local newspaper are trustworthy in the eyes of 
the user, they have a prior claim. 

But there are communities even closer to home. 



COMPANY COMMUNITIES 

Inside your own company or organisation there lurk communities with common 
interests. Some wholesome, some less so. 

There is more than one Internet and Intranet based chess club using Internet facilities 
inside companies. In fact the numbers of interest groups, little virtual communities, 
inside companies is substantial. Some are difficult to see. 

Some of them operate inside and, additionally, outside the organisation. 

The extent to which they exists and the way they are dealt with by companies emerges 
into the light of day from time to time and frequently not for the best of reasons. 

Three staff at a bank were sacked after being caught by the service provider Mercury 
Communications circulating pornography. The circulation was internal, to other banks 
and City trading houses (source Computer weekly 1997). Two ICL employees were 
sacked for using office facilities for viewing pornography (Internet Business news 
1997). 

Phil Virgo from the Institute for the Management of Information systems said in 
Computer Weekly in 1997 "IT managers, as well as local general managers with 
service providers, face jail if their networks are used to put illegal material over the . 
net. ..." 

"It was important," he is reported saying, "for IT managers to take reasonable 
precautions so in the event of a problem they could say they had tried to prevent 
misuse of their system. . . " 



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Of course this is an unreasonable request. As companies and the global culture of the 
world becomes Internet based, the mass of information on increasingly bigger 
systems and ever more optimised bandwidth makes the content of a network invisible 
to the network manager. In the USA there are five billion commercial e-mails per day. 

The key for managing these communities is within the corporate culture. Managers 
have to make clear what behaviours are not acceptable and those that can be damaging 
to company, colleagues and future prospects as part of their e-strategy. 

Mark Trudinger, writing in the may 1999 edition of Corporate Continuity, suggests 
that an employee who visits illegal or offensive sites may be committing a criminal 
offence. And if a colleague sees the site and is offended the organisation could be held 
liable for not taking steps to prevent such material being on display. This of course 
may be true if there is intent behind the actions. However, the open and unregulated 
nature of the Internet makes such incidents possible for good business reasons. 

Beyond the small issue of pornography, it is worth looking at the subject in broader 
terms. 

Many companies have information which is competitively sensitive. For a variety of 
reasons this can be 'offensive' to work colleagues. For example the material may be 
information about a competitors' secret processes. Or it may be an internal company 
secret on an external site. The permutations are much wider than most would guess. 
The extent to which such information is legitimately offensive to the corporate entity, 
can be open to interpretation. 

The response of companies and countries (France and Germany are both trying) is to 
lock out information and knowledge. It will fail because the information is out there 
and available one way or another. The issues for companies and countries is in the 
broader ethical arguments and practices. 

This does not absolve the company. 

Falling in the realm of corporate affairs, the company must have a reputation (and 
ethics) policy and the means to identify and manage its infringement. Porosity, now a 
feature of corporate life, will dictate the need to implement such actions. 

The one thing a company cannot do is lock out the Internet. At best it can lock out a 
few hundred sites. Of many millions, this is not much good. ISP's and Crawlers, also 
try to lock out some sites for (primarily) commercial, moral or ethical reasons. 
However, the interests of an ISP may, and often will be, at odds with the corporate 
philosophy. 

There are precedents for ethical use and by using the approaches already developed in 
other spheres of interest, the means by which corporations can develop their own 
response is at hand. An example used in education is published by Jay P. Sivin and 
Ellen R. Bialo in the USA^^ Some of the ethical issues raised include: A student uses 
a search engine and the World Wide Web to cut-and-paste together a pastiche of other 
people's words to create a research paper she submits under her own name. Is this 
research, plagiarism or straight cheating?. A schoolteacher starts a computer bulletin 



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board system and a student posts a credit card number, thinking of his actions as a 
prank. The legal system regards the school as a publisher and holds it liable. Issues of 
ethical actions are important to reputation when we are involved in on-line 
communications and this stretches beyond the realm of internal virtual communities. 

Internal staff communities can be good, helpful and healthy. The creative manager, 
will develop strategies to encourage such use and to discourage the worse side of 
human nature. 

Communities can be great fun and a boon to the virtual presence of the company. 

COMMUNITY CURRENCY 

The debates about financial transactions using credit cards and 'virtual money' such as 
Beanz, largely centre round security and the ability to exchange goods and 
information for 'micro' payments. I will not enter this arena as, to my mind the number 
of very capable and secure methods available are best and ably dealt with elsewhere. 
Today, a local bank manager will, reluctantly, identify a specialist in every bank. 
Certainly there is a special market for Beanz type micro purchasing. With knowledge 
being disseminated in such volume, a micro-penny on every transaction is worth 
billions. One can only advise keeping taps on any misplaced money or supposed 
mishandling. The rumour mill on the Internet is ever ready to complain. 

Internet communities have a sense of monetary value and express it in a variety of 
ways. It is noticeable that in almost every case, a portion of the perceived consumer 
value is based on a time element as well as the cash value. 

One of the most dynamic parts of the Internet is the growth of on-line auctions. 
Bidding (in time) is a fun and a big adventure for many even though there are some 
scams about. The big (now reputable) on-line auctions are now valuable properties. 
There are a lot of users and they are very successful. They have spawned a new 
generation of on-line auction goers, dealers and commentators. They have also 
provided a new form of currency. Buying and selling things with a nominal value 
measured in all manner of currencies are available with an intrinsic international 
market value of their own. Implementing the Euro took five years, the Internet created 
several forms of value exchange in about a year. 

As a personal view, this makes me tend to believe that the Euro is but an interim 
currency at best. 

The reputation of auctions and their participants is important to the on-line auction 
houses but is also relevant to companies in the traditional world of manufacture, trade 
and exchange. Some companies now make there pricing and delivery policy 
transparent (Rockwell Automation is an example). 

The consumer, in this case, can elect to buy at differential prices based on 
manufactured and logistic availability. Rather than promise delivery in a few days, 
delivery time and the price for faster delivery are transparent to the consumer. Pay 
more and you get the last remaining item in stock or pay less and wait for the next 



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batch to be manufactured but wait for its delivery. Thus there is a new currency which 
has been developed by the Internet based on trade (auctions) and transparency (factory 
to consumer time/cost). The unforgiving netzines acting in their communities are 
providing a new dynamic. Failure to recognise the Internet Society capability to make 
such choices has a profound effect through a loss of trust and reputation. The results 
may prove to be very important as e-business becomes more competitive. 

This may be a hard one for internet reputation management. The perceived value of 
goods and services fall within the traditional area of marketing. However, the 'second 
hand' or more properly the 'second transfer' of value often has an element of reputation 
attached to it. For example, a second hand Trabant suffers from a lack of attached 
brand equity compared to a Rolls Royce. If this brand equity value is tarnished to any 
great extent on the Internet, the damage is obvious. The perpetrator may be a third 
party such as a retailer. In the past this may not have been to bad and easily managed. 
In the Internet Society, the ability for reputation to be tarnished and reputation (brand 
equity) devalued is at greater risk. 

THE EFFECT OF VIRTUAL COMMUNITIES ON THE BOTTOM LINE 

The concept of 'publics' is very important to management of Internet reputation. 

Virtual communities, these communities that exist within the Internet Society, 
abound. Shareholder relationship management that does not take into account the 
discussions in a variety of on-line media is at a disadvantage. Political lobbying 
without some view of the issues in cyberspace is at a disadvantage. Issues 
management without research into the opinions being expressed in the Internet 
Society miss fast moving comment. Community relations without a view of 
communities, is not able to gauge the local views. The list is extensive. 

Most companies also need a view as to how their on-line marketing is affecting the 
business. 

One way of finding out about the relationships between companies and relevant issues 
and virtual communities is through one of the many Internet monitoring services^^. 
These services will present any new comment on a daily basis which makes 
monitoring simple and alerts the company to virtual communities as they discuss 
relevant topics. 

The key to the influence of on-line communities is whether they will affect your 
business. Will comments in a newsgroup add to your ROI or the reverse?. 

So far the jury is out. However, in reputation management terms, the evidence 
suggests that there is every case for planning on Internet communities having an effect 
on both marketing and corporate reputation and this in turn affects the company's 
ability to trade effectively. 

The use of Internet communication shakes people out of watching, say, television into 
becoming involved. There is now significant evidence that the Internet is slicing into 
television viewing time^^. 



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While many seem to be panicked by bad mouthing in virtual communities, I take a 
more cautious view. It is unpleasant to be the subject of criticism especially when it is 
unfounded. Certainly respond to comment with factual information when a comment 
is plainly erroneous and could be very damaging. However, some of the biggest brand 
names in the world have withstood a barrage of Internet criticism for years. Nestle, 
Nike, McDonalds, Proctor an Gamble and many more could not have survived the 
Internet vilification had it been in newspapers. Gerald Ratner was reported in 
Newspapers for less and faced ruin. 

The extent to which an ever growing proportion of the population becomes dependant 
on the Internet and seeks information, and the subsequent reaction to criticism turning 
to commercially harmful reaction is conjecture. That there is an effect is now beyond 
doubt. I am reasonably confident that share of Internet presence is significant because 
I see Amazon and Yahoo and e-bay growing ever more dominant and, in their Internet 
way, profitable. 

I am tempted to believe that favourable comment is effective as between, for example, 
supermarkets. But I am of a mind that there has to be some coalition between the 
Internet Society and some manifestation of a coalition with another and powerful form 
of society before a significant reaction takes place. For example, the coalition between 
newspapers and the Internet has brought the one time darling of scientist and 
politician alike to its knees in the shape of agricultural genetic engineering. In this 
respect, the nature of Internet reputation management, if only in its defensive role, 
remains important. 

As an aid to enhancing reputation and there is significant evidence that Internet 
reputation management to enhance virtual presence is effective. I give you Freeserve, 
Xoom, the BBC and many more. 

Keeping existing customers is less costly than acquiring not, in marketing folk law, 
rocket science. There is considerable evidence that getting a person to return too a site 
manifests itself in new or added sales. This is called 'stickiness' and enhances the 
value of the Internet investment. Thus site design and content is important. In 
addition, the ability to measure the reaction of a visitor to a Web page, dwell time and 
pages for access and egress from your Web site can be monitored allowing 
incremental improvements to be made. In this way, 'stickiness' can be progressively 
improved. 

In a similar way, it is possible to find out if, when and where visitors abandon buying 
from your site. This can be developed into a fine art by identifying where in the 
buying cycle the visitors looses interest, seeks more information or leaves the site. The 
statistics from a Web site are significantly more informative than for other forms of 
marketing, advertising and selling. 

Mastering these techniques will ensure your company's on-line reputation is enhanced. 

Harm to reputation as manifest in the Internet Society, is quite specific. Where a 
particular community (or group of communities) promotes or denigrates a specific 
organisation the advantage or damage tends to be confined within these groups. The 
extent to which this has an effect on the trading capability of the company will depend 
on the influence of the group/s (and to some extent its reach). 

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Equally, the range of company activities under scrutiny, affects the company. All too 
often we see the single minded marketers only promoting products in cyberspace. But 
this is not the nature of Internet Society. This society wants information and passes it 
on. If you like information about companies is 'traded' in the information hungry 
society. A wide range of available subject matter and interesting ways of re-presenting 
this information, adds its reach and potential to influence different Internet 
communities. 

Thus information relevant to a financial audience and appearing in financial 
newsgroups and chat, can be made to migrate to consumer communities, when there is 
a commonality of interest and which adds to the story. A comparative analysis 
between Freeserve and Barclays Bank showed that there was a 60% penetration into 
different newsgroups for Freeserve compared to only 32% for Barclays in the period 
of one month. In addition the range of topics was even more marked with ten times 
more subjects for the ISP. 

The opportunities for brand presence for Freeserve are, thereby greater and its ability 
to enhance ROI significantly greater. 



POLITICAL COMMUNITIES 

Will world-wide Usenet discussions, up-to-the-minute legislative news listerve and 
WWW pages, chat, e-mail chain-letter petitions add to consumer activity and civic 
life, or remove people from it? 

"Computer-Mediated Communication and the American Collectivity: The Dimensions 
of Community Within Cyberspace," by Jan Fernback and Brad Thompson, a paper 
presented to the 1995 meeting of the International Communication Association 
presents one view. 

Fernback and Thompson cite past outbreaks of technological utopianism to question 
the claim that on-line communications can strengthen civil society: "Citizenship via 
cyberspace has not proven to be the panacea for the problems of democratic 
representation within American society; although communities of interest have been 
formed and strengthened... and have demonstrated a sense of solidarity, they have 
nevertheless contributed to the fragmented cultural and political landscape of the 
United States..." 

The authors cite several arguments and conclude "... it seems most likely that the 
virtual public sphere brought about by [computer mediated communication] will serve 
a cathartic role, allowing the public to feel involved rather than to advance actual 
participation." 

The counter argument by Howard Rheingold and others suggest 'communications do 
not offer a Utopia, but they do offer a unique channel for publishing and 
communicating, and the power to publish and communicate is fundamental to 
democracy. Communication media are necessary but not sufficient for self- 
governance and healthy societies. The important stuff still requires turning off the 

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computer and braving the uncertainties of the offline world. When we are called to 
action through the virtual community, we need to keep in mind how much depends on 
whether we simply "feel involved" or whether we take the steps to actually participate 
in the hves of our neighbours, and the civic life of our communities..' 

One can bet a small fortune that the American political parties will not dare ignore the 
Internet in the Presidential election nor will any of the other political campaigners 
from now on. They have already made up their mind. Business leaders are still mostly 
waiting. 

That on-line communication can bring about off-line activity is well proven as the 
'Carnival Against Capitalism' demonstration on June 18th 1999 in London showed. 
The significance of this event is that there was a link between an essentially Internet 
based political process and a near riot and it was manifest. 

In looking at activism later in the book, we shall explore the subject in more detail. 
The critical element for the commercial world is one of judgement: 'To what extent 
will virtual communities affect my business for good or ill' 

There are significant political communities evident in Internet Society and it is 
important to both recognise their existence and the power they can have in 
commercial life. Shell and Greenpeace showed this over Brent Spar. Greenpeace used 
the Internet to generate activism on the streets, influence the media and to affect 
mainstream politicians. Shell, and the rest of industry caught in the headlights of 
Internet activism froze and showed the potential commercial dangers of capitalist 
society being maginalised by not recognising the new political potential of the 
Internet. 



CYBER MARKETERS 

Most companies have a Web site. Most people don't visit it. 

It is important that Web sites are well designed, have rich content, are a gateway to 
information, and are interactive. 

It is important that interaction and responsiveness to netzines is comprehensive, 
timely and backed by the whole company. The internal relationship management to 
achieve this support is a matter for significant internal promotion. In addition, a wide 
capability in every department to contribute to the company Web site is necessary. 

A three month old Web site is like a year old shop window, quaint. It is incumbent on 
reputation managers to ensure that the company site is current and refreshed. This 
does not mean that corporate identity should be compromised, in fact there is much to 
be said for consistency (in my personal view essential) but creativity if designed to 
enhance the virtual experience in terms of access to information and enhance 
interactivity is very helpful. 



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Marketing Web sites on and off-line is imperative. All these things are covered 
extensively in any manner of books and magazines and Web pages and will not be 
covered here. 

Suffice to say that the research companies like Forester Research, Fletcher, Durlacher, 
NOP, Datamonitor, Marketing Metrix^^ and many more offer a host of information for 
the Web site marketer. Information from NUA^^ and CyberAtlas^° and others, the 
powerful on-line publication 'internet.com' . 

The significant facts are that the Internet Community has its own branding for 
commercial presence. The Forester Research^^ report that normal brands have almost 
no influence with young US Internet Users when selecting on-line sites to visit. Even 
on-line brands had mixed reviews and don't necessarily capture the interest of these 
on-line consumers. The Harris Interactive^^ poll in 1999 found that there is also very 
poor consumer recognition of Internet retailing (e-tailing) brands. 

From this research it would seem that Internet branding is different to traditional 
brand promotion. As a result I have explored this area from a number of different 
angles. 

There is no doubt that branding is important and that it is needed to create a symbiosis 
between consumer and company on the Internet. There are big on-line brands. AOL, 
Yahoo and others have huge brand presence. 

Commitment of companies (essentially board members) to the Internet can be 
measured in their commitment to deliver off line their on-line promise. 

The elements are: Branding, accessibility, information, interactivity, performance, and 
trust. 

GLOBAL BRANDING 

The way the Internet works in as outlined in this book is carried forward into thinking 
about product and corporate brands. The significance of Internet brands and brand 
building is evident from the work of Thomas E. Miller vice president of Cyber 
Dialogue, a New York company that develops both custom and syndicated research. 

His most recent papers suggest that traditional brand building has depended on sheer 
visibility. It required that the company presented its brand (logo etc) as often as 
possible. There are not many opportunities for this kind of brand promotion among 
the many and disparate communities in the Internet Society. In addition, netzines are 
not passive. Interactive consumers are often uniquely focused on a specific 
information goal, which can have the effect of blocking brand images, rather than 
passively receptivity to whatever passes in front of them. 

Companies have to respond effectively, then the brand gains on the Internet. If the 
company is seen as passive, that is presenting its sales 'brochure' on its Web site, then 
it will fail to interest the consumer. 



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Brands can be promoted on the Internet in several ways. One way is by building large 
comprehensive sites that are unique such as Amazon or by using the same approach 
but with a long established brand, with the cultural shock that goes with it! The 
alternatives may include dynamic presence building using a variety of techniques in 
concert. 

Brand impressions are built on-line in smaller numbers on the Internet. There is no 
equivalent of mass promotion in Internet Society such as one may achieve using prime 
time television. 

While off-line promotion may be designed to bring visitors directly to your site, on- 
line promotion has to be a combination of many activities aimed at a variety of 
communities. 

Thus the promotion of the brand may be in getting your site to the top of the listings in 
Web crawlers, evident in big portals and with banner advertisements on many sites. It 
may also include a wide range of hyperlinks to your site and encouragement in 
opinion forming Internet media to both discuss a wide range of subjects related to 
your site in a wide range of Internet communities. 

Brand building in cyberspace needs to ensure that each interaction with a potential 
customer impresses them of your sincerity, willingness to listen, and responsiveness to 
whatever needs that person may have. Once again, it appears, the relationship is a 
question of building and securing trust through a well developed on-line and offline 
reputation. 

Internet users demand excellent service and are not, nor need to be, with so many 
alternative vendors, so brand conscious. Brand equity is important and is why some 
sites are able to charge for subscription fees while others must give information away. 
Brand equity (the value of the brand in the competitive environment) is central to why 
AOL is the number one on-line service and Yahoo is the top Web index. 

Research by Cyber Dialog demonstrated that on-line users would rather bank on-line 
with their local branch than with an unknown Internet bank. This doesn't mean that an 
upstart can't compete with big named banks but shows that, in some instances offline 
brands can capitalise on existing brand equity when they go on-line. 

Good Internet brands have a number of common attributes. They offer up to date 
information, interactivity and corporate culture. With such attributes, even a bad 
experience will draw the loyal visitor back to the site. On-line marketers have to keep 
loyal visitors/consumers and capture those just clicking though. In this way the brand 
will generate repeat on-line business say Cyber Dialogue. 

It is now quite clear that that the Internet Society comprises many interests and virtual 
communities. The old rules of brand based marketing (even classifications such as 
socio-economics) are too clumsy for the sophistication of netzines. Analysing various 
user segments (by age, sex, reason for Internet use, Internet experience, relationship 
with Internet Society communities, education and household status) is key to 
understanding how likely different users will be to respond to the range of products 
and services. 



David Phillips July 1 999 Pa ge 48 of 

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MANAGING REPUTATION IN CYBERSPACE 



The way a company markets offline does affect its ability to market products on-line. 
There is evidence from Cyber Dialogue that netzines are using search engines before 
settling on brands they know. 



Electrolux has a world-wide network of dealers, distributors and retailers. They all 
have their own Web sites. Electrolux has little control over how it is represented on 
the Web. Some are very good in using the Electrolux style. 



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S] Electrolux 



Electrolux B 

ElectTolu^s hemsida http:AAiyww.electtolux coi 

Adress: 

LillaEssingen 
105 45 STOCKHOLM 
Tel: 08-73S 60 00 
Fax, 08-656 44 78 

Electrolux i koithet: 



In Sweden, the logo style is used properly and adds to the Electrolux brand and on- 
line presence but in other places the style can be completely different. 



In some instances there is no 
relationship between the 
principle and the reseller. 

To create such a relationship 
requires painstaking effort to 
encourage, cajole and entice 
co-operation to use the global 
brand and enhance virtual 
presence and, as a result, 
sales. 

Many Electrolux retailers have 
a presence in their local 
community sites. 



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Links •] Best of ihe Web BJ Channel Guide 0J Customize Links flj Internet Enplorer Net^ls. 0J Interrel Start 

^£3jij23j Zi^i Guide 

Tils Premier Guide ra Business, Enlenahnment and Recreation in Santa Cmz County. 

Places to igii Electrolux Sales & Service 

■ GUIDE HOME 212HlstAve 

Capitola, CA 95010-2056 
Thingstocju 831473-9010 

■ Contact SCG 

■ GuMaFMdbMk 



DOMTFORSETl DON'T FOReSn DON'T FOBSgn 
Tdl Ihcm you foind tttdr business listing an the Internet 
tvhile i^ing --i-^rit^-i Cr-us &Jide. 



David Phillips July 1999 



Page 49 of 



104 



MANAGING REPUTATION IN CYBERSPACE 



Here is another opportunity for the company to enhance its Internet brand presence 
and add to its on-Hne reputation. This could have been very useful in, say Santa 
Cruise. 



Commonality of branding across the world is now important because of the global 
nature of the Internet. 

ACCESSIBILITY 

Cyber Dialogue looked at what factors motivate the average user's search for a 
product or service and how they came to find a 'site perceived as legitimate'. 

The route tends to be a search using a search engine and a visit to, for example, a 
retailer that sells the desired product. Only after the initial search will customers go 
directly to a brand or specific site. 

Less than one in five admit to going to a site of a brand they know first off Thus part 
of the experience in finding a site is to find added information. 

Virtual presence building takes many forms and is a two way street. Getting a 
company with a site to accept your banner advertisement or hyperlink (or even mini- 
site) is one of the many ways of building the virtual presence of your company. It is 
also a way for your site to add information about your suppliers and, especially to 
attract endorsement-by-association with a big, well known or trusted brand. 

It works. 

When looking for a particular product on-line, 38% of the Cyber Dialogue 
respondents went to a site sponsoring a brand they were familiar with, having 
conducted the broad search first. 

Kevin Mabley, senior analyst with Cyber Dialogue, says that although price and 
quality are key motivators, in order to acquire customers within the fragmented on- 
line marketplace, a company must leverage its brands offline. Those companies with 
existing reputations have the task of familiarising current customers with the added 
feature; on-line entities have to go offline to other media to get the word out. 

Virtual community acquisition and retention requires trust, and Mabley says the 
customers like to know what to expect when they go to a site and want to feel part of a 
community. The formation of a community on-line, in almost all cases, builds trust, 
he says. 



David Phillips July 1999 Pa ge 50 of 

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MANAGING REPUTATION IN CYBERSPACE 



He continues 'Consumers are more likely to return to a site if it's identified with a 
brand they recognise and trust. Of course, coupons, discounts, and free products never 
hurt when building an on-line customer base.' 

There is yet another case for creating promotional synergies between on-line 
promotion and offline publicity. 

Contributing to the WebAttack conference last year Scott Reents^^ commented on 
research showing how people are using the Web and are deserting other media - 
usually television. But then went on to identify how different media and the Internet 
can work together. 

He noted that one-third of Internet users report watching less television as a direct 
result of their Internet use but that this was a relatively small decline in absolute hours 
of viewing (13% according to other research). Netzines, he noted are more likely to 
pay for television content, including cable, satellite or premium cable channels. 

But the synergistic advantages are, in his view, more important. His research into US 
television habits showed that 24 percent of Internet users have accessed a URL they 
saw advertised on TV, which makes TV almost as important as word-of-mouth advice 
and recommendation. 

As an indicator of what we may expect in the UK he noted that 8.5 million media 
junkies in the U.S. report going on-line while watching TV and they are people who 
are more likely to use advance technologies such as Shockwave and chat. 

These cross media synergies also work in reverse. An on-line company looks to off- 
line promotion to attract first time visitors. Internet companies in the UK are 
increasingly looking to offline media to boost on-line brand awareness according to 
Fletcher Research. On-line firms will spend up to $62m on offline advertising by the 
end of this year according to director of research at Fletcher, William Reeve. 

For example Excite UK recently launched an advertising campaign which included 
TV, radio, print and 240 billboards on the London Underground. European director of 
Excite UK, Evan Rudowski, commented that of the £10 million allocated for 
advertising and brand promotion in 1999, 70 percent will be spent offline. 

According to Ilika Shelley of Western International Media .^"^ the major on-line sites 
will spend up to £2 million on advertising this year, 80 percent of which will be spent 
on offline media. 

Reasons for offline promotion are the ability to foster brand awareness among those 
who are new to the Internet and those who intend to go on-line in the near future. The 
cost is relatively cheap and because people are familiar with offline advertising, 
brands who advertise offline typically reap disproportionately high brand awareness 
on-line. 



David Phillips July 1 999 Pa ge 5 1 of 

104 



MANAGING REPUTATION IN CYBERSPACE 

As the on-line population grows and more income is derived via the Internet, 
corporate managers will find that there is an imperative to change the way their 
company advertises. 

According to MSBC^^ In the USA, on-line companies were planning to spend $1 
billion on advertising in the fourth quarter of 1999. They needed to make their product 
or service a household name for the impending Christmas shopping spree. In they 
anticipated this expenditure would help the company seem attractive to potential 
investors. 

Due to the high cost of on-line branding many start-ups launch an advertising 
campaign in the hope of raising capital to fund further ventures. Already we are seeing 
companies fears that if they do not make noise for the Christmas season they're dead. 

The majority of advertising expenditure in the US follows the announced methods in 
the UK.. It will be in traditional media, billboards, sub- ways, buses, print, radio, TV. 
On-line advertising spend will not be adversely affected. 

The inevitable conclusion is that by developing on-line content for these viewers, 
networks can extend their brands and test methods for blending interactive and 
broadcast content. 



CYBERBRAND OUTREACH ACCESSIBILITY 

A key roll for the brand reputation manager is to extend the company's Internet 
presence both for the company Web sites and, significantly, beyond it. The more 
places where the brand is visible, the better. On-line PR is important and is a 
contributor but is by no means the whole story. 

Building a brand reputation is hard work. Few companies look upstream and down- 
steam to add to their brand presence. 

Providing stakeholders such as retailers, dealers, distributors with the means and 
incentive to add the company banner advertisement can deliver the brand message and 
easy access to the company site in a million different ways. 

Retailers and business to business companies can look to the Web sites of their 
suppliers and ask for the inclusion of advertisements and banner ads to reach out to 
the supply chain audience. Suppliers in this sense can include everyone from a bank to 
a shrink wrap vendor. 

The book seller Amazon is a brand which attracts a lot of visitors (6 million) and the 
auction houses (like Ebay, with 6 million) have big audiences too. They have a 
massive number of on-line marketing partners to draw netzines to their site. 

Below is an example of the Electrolux opportunity and demonstrates the point, 
literally, graphically. 



David Phillips July 1999 Pa ge 52 of 

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MANAGING REPUTATION IN CYBERSPACE 

INFORMATION 

The most visited (including the same person visiting more than once) sites have very 
big audiences such as AOL with 47million, Yahoo at 37 million. Retailers like Xoom 
ranked 13''' in the world has 9 million visitors. 

Across many genre of Internet presence, there is recognition that netzines appreciate 
access to information. Many sites in the commercial and not-for-profit areas of 
interest have a tiered approach to the provision of information. 

Progressively, the visitor is taken to greater depths of detail until they commit to an 
action. This process is effectively used in a progressive approach to make sites 'sticky' 
and to effect a behavioural change (such as selecting a product, agreeing to the 
purchase and then paying for the product and service). For the expert salesman, this is 
but a translation of long held selling practice into on-line selling. 

Sites with rich content and a lot of information like Yahoo can keep people on their 
sites for a long time (Ihour 8 minutes on average). But, more normally, even the best 
in the world have not much more than ten minutes of Cyber Society's time at any one 
go. Sites with lots of interaction, especially running over broadband networks such as 
cable have better brand awareness and longer dwell times on site^^ 

This process of adding interest and does not have to be a copycat version of the big 
portals. It can take other forms. Here are some interesting Electrolux features that add 
to its on-line presence. In many instances it can take the form of information relevant 
and interesting to the life interest or life style of the individual netzine. 



J Address l yl hl:l:p://www.tweekil:l:eri.com/electroluy/ 



J Links ^ Best of the Web tfj Channel Guide ^_\ Customize Links |>] Internet Ewplorer News tfij Internet Start 




Electrolux 

review: 

Electrolux with Revolution 9 and Aberdeen 

photo: 

Electrolux on stage (same as photo on this page) (14k) 



SZtl" ihe Twee Kitten WWW She 

Q°-l 

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BulUititi Boards | feedback tgtM^ekitten.com 




. Visit the Cutie Club ! and the twee kitten mail order catalog . 




David Phillips July 1999 



Page 53 of 



104 



MANAGING REPUTATION IN CYBERSPACE 




Providing information can come in many guises. There is an 80:20 rule among many 
Webmasters. They accept that external hyperlinks to their own site and links from 
their site should be in the proportion of 80:20. This is a two edged sword. A hyper 
link to a site is a claim of allegiance. Sometimes this is welcome but not always. 

Some hyperlinks can and should offer opportunities to build and enhance the company 
Internet Brand presence. This could be with a retailer, as in the case eof Electrolux or 
perhaps a new form of business. There are often opportunities to make the relationship 
commercially advantageous. 

Many sites could put the Amazon.com URL on their site but, by incentivising the 
process in a variety of ways, Amazon have tempted most to put a banner 
advertisement there instead. The device used by Amazon is now passe but the 
principle has many applications. 

Site navigation is a big problem and getting it wrong can be a major mistake. 

One third of all customers who opened an on-line bank account in the USA during 
1998/9 closed their accounts according to a study by Cybercitizen Finance^^. While 
3.2 million people opened up virtual bank accounts in the previous year, 3. 1 million 
stopped using their accounts. When asked why they discontinued their accounts, fifty 
percent said they found the sites too complicated to navigate and customer service was 
dissatisfactory. 

INTERACTIVITY 

The most boring sites to visit are those that look like a company brochure pasted into 
a Web site. One look and you have seen all there is to see. 

The advent of technologies such as Shockwave, Java, MP3 and steamed audio and 
video has made Web sites exciting places to visit. As long as download times are kept 
very short, they add a lot to the experience. 

We know that content is very significant and when it is presented using these 
techniques, it holds the attention of the visitor. The caveat is that these are aids to 
content not interactivity for the sake of it. 



David Phillips July 1 999 Pa ge 54 of 

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MANAGING REPUTATION IN CYBERSPACE 

The temptation to tart-up effectively the company brochure with wizzy Shockwave 
graphics was a phase Web designers went through in 1998 and became an irritant and 
hindrance to get through to the information required. 

These technologies can be used to bring added information and content to the visitor 
without loosing the essential purpose of the site. In such circumstances, they are an 
added bonus. 

Inclusion of chat and discussion groups requiring investment in a moderator or 
product managers has proved to be very helpful for a lot of companies. It is very 
important that these sites are visited and used. If not the give an impression of people 
having no interest, and by inference that the site is not popular. In addition if left alone 
to fend for themselves they quickly go off message and get filled with all manner of 
cranks and wannabes. 

As most people want to access and exchange information, the most important part of 
any Web site is its ability to take the visitor through to the information needed and for 
there to be trust in the information provided. 

Well posted links through the sight, access to additional (even detailed) information if 
needed and the means to navigate back to select more germane information is critical. 

So many comments are made about well constructed and interesting sites that they can 
quickly attract an almost cult following and the reputation of the brand is very much 
enhanced. 

Being able to interact with information outside the site is appealing and the use of 
hyperlinks is an attractive advantage. Opening new windows helps a company keep in 
touch with the visitor while this side exploration is continued. Not being able to 
escape a site is an irritant and there is evidence that many netzines block these sites 
from their browsers. 

Interactivity is manifest in a number of other ways 

In 1998 only 8% of the US Fortune 500 company Websites gave a contact person for 
customers despite a widely held belief that the Internet fosters closer customer 
relations. 

Only 25 percent had a email contact address and 33.3 percent had no telephone 
number. In the UK, access to contacts is very patchy and all sites should provide ready 
access (from every page) to a multiplicity of method for contact. 

Despite a shortage for skilled workers, 90 percent of sites, in the survey gave no 
contact name for job applications and only 16 percent had a final posting date 
therefore prospective workers can not tell if the position is filled or not. Two thirds of 
the sites provided an facility for potential or existing investors to download financial 
information, less than a third give a contact person for investors and one fifth did not 
publish an annual report. 



David Phillips July 1999 Pa ge 55 of 

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MANAGING REPUTATION IN CYBERSPACE 

If communication is about anything it is a two way street. In the Internet Society, this 
is an absolute must. The reputation for being unapproachable is not one to foster at the 
best of times and yet is a common feature of many Internet sites. 



BRAND PERFORMANCE 

Twenty five top US e-commerce sites revealed that few provisions have been made 
for real-time on-line customer service and support. 

Julie Schoenfeld, president and CEO at Net Effect said: "They've been busy getting 
their sites up and running. When you think about it, there was virtually no e- 
commerce two years ago. Now that it's growing tremendously, real-time customer 
service is the next logical step." 

Schoenfeld also revealed that only 5.75 percent of the people who visit e-commerce 
sites even try to make a purchase. 

In a full page article in the Daily Mail in July 1999, Rachael Snowden, tried to buy 
on-line in the UK. Sites claimed to be able to deliver products in a day and took up to 
26 days, one supplier took over a month (but took the money in advance) and products 
were unavailable. The reputation of these companies on-line and in high circulating 
newspapers is being tarnished by this lack of responsiveness. The Internet society is 
well aware that these mistakes need not be made. A number of them have seen the 
TNT site which shows customers precisely where their products are in the distribution 
chain. They also know that taking an item off the Web site when it goes out of stock is 
not the hardest click of a button in a well constructed site and also know how simple it 
is to charge, without causing offence over the Internet^^ 

While these issues are company process issues, the cost to reputation in the Internet 
Society is high. Brand values on the Internet will stay at a low ebb until these simple 
processes are properly managed. 

There are exceptions to the general rule of poor delivery. 

The top sites for the number of different people visiting them have substantial brand 
equity because they deliver. It comes as little surprise that organisations that are used 
to delivering their product accurately and fast buck the trend 

Top on-line sites tend to be news sites. MSNBC claims an on-line audience of four 
million, CNN 2 million ABC news 1.6 million. The BBC attracts one of the largest 
audiences among Europeans. If you look at the presence of these companies it is 
powerful on-line and off-line. The BBC mentions its Web site several times every 
hour. So does CNN. MSN provide access to its news channel from its software CD's 
as well as its browser. 



David Phillips July 1999 Pa ge 56 of 

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MANAGING REPUTATION IN CYBERSPACE 



PROMOTION 



AMBASSADORS 

There are many forms of Internet marketing. Ambassador promotion is yet another. 

Many organisations have supporters and friends who put up Web sites about their 
products, services, ideals and campaigns. 

This Kodak enthusiast is one of the milHons of personal Web sites. They crop up 
everywhere. Chris lives in the Channel Isles. 



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Chris Eve's Kodak Camera Collection 



Best Experienced at SDOkGOO with 



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Click Here To Start 




Tliis Site Maintained With 



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HonwSltB 



*** Over 350 Cameras now listed *** 
Hi, and welcome to my growing collection of Kodak Cameras. 

A few words about mvself. I live in Jersey in the Channel Islands (Europe) and I look something like the self portrait above, but you 
didnt come here to read about me! So on to the cameras... the camera in the picture above is my Retina lie fitted v\'ith the 80mm 
lens and au>filliary viewfinder, loaded with ancient but usable Eastman 4-X Tiie shot was made into a mirror and scanned into the 
computer v^ith a Tamron Fotovitf III via my ATM Interface. 

On the face of it, Kodak will be very happy to have such an enthusiast providing extra 
exposure world-wide. Of course this is an enthusiast and his Web site offers an 
opportunity to ensure that he continues to promote the brand through this Web 
presence. 

A creative reputation manager will use such an opportunity to advance the brand as 
well as new (and mature) products. A good customer retention opportunity. 

On the other hand there is a problem. 

Here is the Kodak brand, its logo and corporate identity being plagiarised on the 
Internet. It raises issues of trade mark and copyright. 

For some companies the solution will be to reach for the lawyers and attempt to have 
the logo removed. As we shall see, it happens. There tend to be tears. 



David Phillips July 1999 



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Effective Internet reputation management can protect the reputation, rights and 
companies' investment in corporate image and identity. It will also save a fortune on 
legal fees! 

In this case, the alternative is for a customer oriented person to offer the 'proper logo' 
with its trademark symbol and some help with the site. A friend can become a real 
ambassador. 



ONLINE PR 

On-line public relations is a boom area for the Internet. The reach of on-line news is 
now huge. Half of all users of the Internet take some form of on-line news every day. 

There are two aspects to it. 

Most publications publish an on-line version of the printed edition. In some instances, 
this is a synopsis, in others it is a straight reproduction but, in a very significant 
number of cases, the on-line version is very different. 

Some publications make virtue of their new on-line capabilities. Ft.com is an example 
and the on-line version is significantly different to the pink pages seen at news vendor 
stands. 

The news vendors in cyberspace are often the big entry Portals and ISP's. They also 
comment about news and Web sites, attracting vast numbers of hits for the selected 
few. A new form of PR. 

The most significant value of these on-line publications is their ability to handle a 
greater range of news all the time and to offer greater depth of reporting. When a big 
story breaks like the Kosovo crisis, much news is abandoned for the printed version to 
make space for extensive, single story coverage. Once frustrating for journalists and 
many readers alike, the advent of the Internet allows many publications to provide 
both the big story and special interest coverage as well. Some of these publications 
break stories as they happen and do not wait until the print version hits the streets. 

On-line publications have all the advantages of their traditional brethren and none of 
the disadvantages of having to print, wait until publication for the news to break and 
have one big benefit. They can provide immediate contact with other sources of 
information and news. The hyperlinks from an on-line publication offer a significant 
advantage. 

Immediate response to stories is now open for all and letters to the editor come in the 
shape of e-mails by the hard disc full. To enhance the offering of on-line media, it will 
e-mail its readers, stream data to them and provide a vast range of alert and archive 
resource. 

Oddly enough, many journalists still prefer to receive information in printed form. 
Their problem being that they receive hundreds of e-mailed 'press releases' every day 
and cannot process them all. As a result they tend to look for e-mails they know are 



David Phillips July 1999 Pa ge 58 of 

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MANAGING REPUTATION IN CYBERSPACE 

coming from trusted sources, use on-line news agencies and distribution firms. The 
PR virtues of knowing the journalist and building an effective PR relationship is as 
important as ever. 

SPONSORSHIP MARKETING 

The Internet Society is ready made for enthusiasts. In addition to the official 
Manchester United Web site, there are dozens of sites dedicated to the team. The 
newsgroup postings run into thousands every month and there is a minute by minute 
analysis of every move in on-line media sites as well. 

Internet sponsorship has a host of advantages. The first is that the sponsor can target 
the audience with great precision. As long as the symbiosis between an the sponsored 
activity and its interest group match the marketing need, then the match is 100%. 
Unlike all other forms of sponsorship, this is target marketing at its finest. 

The second advantage is that the events and activities of the sponsored activity 
provide every reason for the netzine to return to the site on a regular basis, and can be 
encouraged to do so. 

The appeal of a sport, music or other sponsored activity already attracts netzines to 
particular sites. While sponsorship can aid added interest in the site, there is already a 
considerable real or pent-up visitors presence. In addition a wide range of portals 
encourage visits to sports and cultural sites providing excellent third party promotion. 

There would seem to be less resistance to advertising on sponsored sites than for other 
forms of internet advertising. 

There are also many opportunities to look for added value links and third parties. 

ESPN, has been a leader in sport marketing on the Web. ESPNet SportsZone^*^ is 
often cited as providing the best example of the future of the media in Cyberspace. 
Three years ago (when the Internet Society in the USA was only 47 million) ESPNet 
provided over 140,000 daily users with interactive games, up-to-the minute scores, 
game reports, feature stories, and statistics. Users are continually drawn to the site as a 
result of ESPN's Web strategy. Its attractions include up to date fixture, scores and 
participant and rules information, chat and discussion groups about a wide range of 
sports. In addition to the free information it provides, access to real-time results and 
information, including streamed Webcasting for fee paying visitors, and, in addition, 
is a heavily sponsored site. Companies sponsoring football also sponsor the ESPN 
site. 

Often million people on-line 1 million men and 600,000 women in the UK primarily 
use the Internet for entertainmenf*°. Some 17% of American users of the Internet get 
sports information from the Internet and the majority do so more than once a week. 
Translated to the UK this would represent 1.7 million users in mid 1999. On-line 
sports magazines such as ESPN in the USA, if translated to the UK would attract 
28,000 daily visitors. By any standards it would seem that Internet sport sponsorship 
offers some considerable advantages. 



David Phillips July 1999 Pa ge 59 of 

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MANAGING REPUTATION IN CYBERSPACE 

With the ability to build large databases of customer information, the Web encourages 
one-to-one marketing. Anheuser-Busch used its Atlanta Olympic Games theme Web 
site, budweiser.com, to build a database of customer buying habits during the 1996 
Olympics (Warner, 1997). 

Effective sponsorship offers a constant stream of visitors who have an endless 
fascination with the subjects and also provides constant data about the audience. 

One of the remarkable developments for the Web is the ability and capability of user's 
to multitask. The evidence of people buying while listening to streamed radio and 
television translates well to Internet sponsorship and the opportunities for retails sales 
are extensive. 

Thus there are many good reasons why the Internet sponsorship should be an option 
for reputation development and they conform to most of the primary reasons why 
companies use sponsorship as a reputation management tool: 



public awareness 

corporate image 

public perception 

community involvement 

financial relations 

client entertainment 

government relations 

employee relations 

compete with other companies 

business relations 

reach target market 

brand positioning 

increase sales 

sampling 

generate visibility 

generate publicity 

enhance ad campaign 

avoid clutter 

target specificity 

The definitive Internet site covering the subject of sport sponsorship, its value and 
evaluation is 'Cyber Journal of Sport Marketing"^ ^ 

Sport and cultural sponsorship on-line can be very creative and offers a lot of scope 
for many types of activity, co-operation with co-sponsors and the organisation being 
sponsored. One look at the sport of football on Yahoo will give an indication of the 
range of opportunities that exists in terms of sites where involvement can be 
developed. 

Equally the Internet tools that can be deployed, such as interactive and database driven 
information can be really appealing. 



David Phillips July 1 999 Pa ge 60 of 

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MANAGING REPUTATION IN CYBERSPACE 

On the one hand you have to be careful about who you sponsor both in terms of sport, 
arts, events and community sponsorship in order that your good name is maintained. 

In addition, you have to take due regard of the companies that bear your banner 
advertisement or hyperhnk. 

The latter is not at all easy. It is simple for a Webmaster to add your hyperlink to his 
site. You have to monitor this happening and as necessary get it removed if it will 
adversely affect Internet reputation. 

Furthermore, you will need to be active in promoting your, preferably interactive, 
presence on other sites especially those organisations you sponsor to enhance your 
virtual presence and your brand equity. 

The public relations industry is well aware of the value of endorsement (the nature of 
much press relations is based on the concept of media endorsement). On the Internet, 
endorsement through sponsorship, inter-related marketing and virtual presence 
building and management of who the company and its brand is associated with, is 
now an important element of reputation management. 



BRAND ATTACKS 

What do Disney, Barbie, CNN, Honda and Mercedes have in common? They topped 
the list of the 10 brands most commonly associated with pornography on the Internet, 
according to a study by Cyveillance^M^^^ ^i^o specialise in on-line brand protection. 
The other five brand names most often found in pornographic Web sites were Levis, 
ESPN, NBA, Chevy and Nintendo, respectively. These popular brand names appeared 
in hidden or visible text on the sites identified and in metatags in 25 percent of the 
sites suspected of containing pornography-presumably without the brand owners' 
knowledge. 




This study is based on analysis of more than 300,000 Web pages, 75,000 were 
suspected of containing pornographic material and, of those, approximately 19,000 
(25 percent) contained one or more of the nearly 120 popular brands included in the 
study. 



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The site above shows a well known British high street retailer evident in the metatag 
of a pornography site. The practice is quite common. 

The world of the Internet has also revealed that some companies have used the same 
device to attract consumers from competitors! 

In the UK a company discovered a sudden drop in visits to its site. On investigation it 
found a competitor had used its name in the metatag, thus steering search engines 
towards the competition. 

In another case, a company used competitor comparisons naming specific brands in its 
Web pages to seduce search engines to bring competitor enquiries to its site. 

Some companies have used front organisations to attack brands they are often noticed 
because they attack only one type of product when others exist in the market niche. 
Sharon Beder who wrote are Global Spin mentions a corporate front group called 
"Mothers Against Pollution", which campaigned against plastic milk bottles. It was 
discovered that this was initiated by the owner of a company which produced 
cardboard cartons. 

When Yahoo began offering free email accounts to the general public, they made a 
critical mistake in setting this up so that "@yahoo.com" was the assigned domain for 
these accounts. Up until then, yahoo.com was used for the company's own employees, 
and these email identities switched to "yahoo-inc.com." It didn't take long before some 
enterprising sort claimed contest-winner@yahoo.com or some such tantalising 
address, and had people sending their credit card numbers, thinking they were 
corresponding with a genuine Yahoo employee. 

Software is being distributed which allows users to change the contents of a web site, 
adding their own remarks to it as desired, and that there was 'no way' the webmaster is 
able to prevent it and there is no reason why the webmaster should even be aware it 
was happening? 

A company called Third Voice, distributes a browser that lets you mark up any web 
site you visit with your own commentary, anywhere on the page you feel like. 

The page is then stored on a server at Third Voice. Anytime you set your browser to 
some URL, a search is made of the server at Third Voice and will display the changed 
pages. 

If Third Voice does not have a copy of the page on file, then they just let you take the 
webmaster's actual copy instead. For the user, it is all quite transparent. All the user 
has to do is indicate a desired URL, and the browser will go off in two directions: one 
to the actual site, and two, to the Third Voice server. If it finds a copy at Third Voice, 
then that is the copy you receive. 

In most cases, unless the webmaster himself happens to view his page using the Third 
Voice browser application, he won't even know his page was defaced and rewritten. 

Third Voice believe it will improve the net by allowing everyone to comment on 



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whatever web sites they visit, and to have their comments available to all other 
visitors as well. 



At the core of much Internet marketing is a presumption that companies and 
organisations are protecting Intellectual Properties. Copyright, patents, trade marks 
registered and company names and Internet addresses need considerable attention. 
Companies do not own what they do not protect. As these case studies show, a 
number of companies need to be much more aware of how they will protect their good 
name and the value of their brands as the Internet becomes more pervasive. 

CYBER COUNTERFEIT SALES 

"Children's toys are not the only items being counterfeited and sold over the Internef 
said Brandy Thomas, CEO and chairman of Cyveillance. "The Internet has become a 
hotbed for the sale of counterfeit luxury items that you might typically find on any 
street corner in New York City — watches, pens, sunglasses, leather goods, you name 
it. Like in the streets of New York, prices that seem too good to be true, usually are. 

"With every click of the mouse, companies are increasingly at risk of losing 
significant market share due to brand confusion and devaluation of their image while 
cheap imitations become ever more accessible over the Internet. An impending crisis 
awaits companies that don't act now to protect their valuable brands on the Internet as 
the Web continues to grow." 



INTERNAL COMMUNICATIONS 

Every company has employees with access to the Internet. Many employees have 
personal access to the Internet. 

It is not surprising to find that employees look at the company Web site and its 
competitor's Web sites and those of the company's stakeholders at work and play. 

Equally both at work and in their private lives, people talk about their company with 
other people through the Internet. 



POROUS ORGANISATIONS 

The time when company executives were in control of what was said about a company 
has been fading for some time. Growth in the numbers of publications has meant that 
there is already a wide media with ever more specific interest in the company. The 
advent of the Internet now means that any and every aspect of the company is open to 
comment by anyone. What is said can come from employees, suppliers, investors, 
activists, in fact any stakeholder. In addition, comment about your company can be 
made by people who have no knowledge about the company what so ever. 



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This porosity, the means by which information can flow in and out of a company from 
and through anyone, is one of the most significant aspects of the Internet for company 
directors. 

It means that there is a need for a completely new way of thinking about mission, 
strategy, internal motivation and communication. 

There will always be disaffected stakeholders. The key to management of this 
phenomena is in ensuring that there is close understanding of corporate objectives 
throughout the organisation. In this way, even the most unpalatable events can be 
managed without the disaffected being able to create a constituency that will harm the 
corporate whole. 

In addition, the Internet adds the dimension that the company will need to protect its 
stakeholders from the effects of the disaffected. 



CYBERSA WY STAKEHOLDERS 

This returns us to the need to implement company wide belief in corporate mission, 
standards and objectives. To have an effective outward presence, managers need to 
look inside their organisation to secure commitment among their own stakeholders. 

In many ways, the Internet provides its own solution with the availability of Intranets, 
which, if attractive, instructive, helpful and appealing offer excellent means to 
communicate at every level at the kind of speed the Internet demands. 

The nature of companies with effective Intranets is that its application also makes the 
company more porous and this level of transparency has its drawbacks. That there is 
confidential information in every company goes without saying. Clarity in explaining 
why it is confidential and the consequences of such information in the wrong hands to 
fellow stakeholders needs to be articulated to all. 

In this way, the company creates its own defences and the virtual communities within 
the company become substantially self regulating. 



CYBERSTALKERS 

Professor Gregory Boiler and his students at the University of Memphis published an 
article "Taking Stock In Congress" some time ago. It used information available on 
public databases to link the voting records of U.S. Representatives and Senators to 
their personal stock-trading. 

This information is in the public domain but not ordinarily available to citizens who 
don't know how or where to look. It revealed some intriguing correlation's. 



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By combining the databases that track the voting and investing information with a 
network that distributes the information, in this case a Web site, it becomes possible 
to provide a citizen's guide to who owns who in Washington. 

Mojo Wire' ^^ is the Website which connects the databases into a "Taking Stock in 
Congress" section where citizens can follow the stock transactions and voting records 
of "83 members of Congress who purchased or sold stocks near the time of 
Congressional votes or other government actions relevant to the stocks' value. " 

There have been some interesting revelations. 

" Senator. Alfonse D'Amato (R-NY) bought up public utilities stock just two days 
before President Bush signed the National Energy Conservation Act, which 
deregulated energy transmissions, offering growth opportunities for many utilities. 
Newt Gingrich (R-GA) helped kill amendments to cut funding for the space station 
program just three weeks after buying stock in Boeing, which was subsequently 
named the prime contractor for the station. 

Senator Lloyd Bentsen (D-TX) bought stock in a food and dairy company, 
Morningstar Foods, four days before the introduction of an amendment to the National 
School Lunch Act. The amendment called for diversifying milk choices for school 
lunch programs, opening the door for Morningstar' s various milk products. Later that 
year Bentsen unloaded his Morningstar stock just before the Justice Department 
opened a probe into the company for bid-rigging." 

Another Website that provides useful information about funding sources of political 
campaigns is the Center for Public Integritv "^^. CPI founder Charles Lewis was an 
emmy-nominated investigative reporter for CBS News and ABC News, and is the 
author of The Buying of the President (Avon 1996). 

The combination of public information and modest computer savvy makes it possible 
to track the assets of the top Presidential candidates, including honoraria paid to 
candidates while holding public office, trips taken, identity of largest contributors. 

This is a legitimate activity and especially so for people in public life. 

If it was applied to the non-executive chairmen of companies or even the corporate 
affairs directors of corporations, would it be an infringement of their civil liberties? 

This kind of behaviour falls within the realm of cyber stalking. 

Where to draw the line is an issue. 

It is not difficult to find out information about people. Here is an unsolicited e-mail 
advertisement for software to help: 

From: yes_U_can_Spy2@hotmail.com 

Subject: Don't Get Ripped Off! ! ! There's only ONE Internet Spy and You Software. (Mac or PC) 

WE ARE BEING FORCED TO DISCONTINUE SELLING THIS INFORMA TION 

Don't miss this very limited time opportunity to get the software that will allow you to become the 

ultimate "Super Snoop" on anyone !!! 



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MANAGING REPUTATION IN CYBERSPACE 

Get The SOFTWARE They Want BANNED In All COUNTRIES!!! 

"THE INTERNET SPY AND YOU" SHOWS YOU HOW TO GET THE FACTS ON ANYONE!!! 

Get the facts on anyone using the Internet! 

Tocate Missing Persons, find Tost Relatives, obtain Addresses 
and Phone Numbers of old school friends, even Skip Trace Dead 
Beat Spouses. This is not a Private Investigator, but a 
sophisticated SOFTWARE program DESIGNED to automatically 
CRACK YOUR CASE with links to thousands of Public Record databases. 

Find out SECRETS about your relatives, friends, enemies, 
and everyone else! — even your spouse with the new, 
INTERNET SPY AND YOU!!! 

It's absolutely astounding! Here's what you can learn: 

Ticense plate number! 

Get anyone's name and address with just a license plate number! 

(Find that girl you met in traffic!) 

Driving record! Get anyone 's driving record 

Social security number! Trace anyone by social security number! 

Address! Get anyone 's address with just a name! 

Unlisted phone numbers! Get anyone's phone number with just a name - even unlisted numbers! 

Tocate! Tong lost friends, relatives, a past lover who broke your heart! 

E-mail! Send anonymous e-mail completely untraceable! 

Dirty secrets! Discover dirty secrets your in-laws don't want you to know! 

Investigate anyone! Use the sources that private investigators use (all on the Internet)secretly! 

Ex-spouse! Team how to get information on an ex-spouse that will help you win in court! (Dig up old 

skeletons) 

Criminal search-background check! 
Find out about your daughters boyfriend! 
(or her husband) 

Find out! If you are being investigated! 

Neighbors! Team all about your mysterious neighbors! Find out what they have to hide! 

People you work with! Be astonished by what you'll learn about people you work with! 

Education verifr cation! Did he really graduate college? Find out! 

Internet Spy and You Software will help you discover ANYTHING about anyone, with clickable 
hyperlinks, no typing in Internet addresses! Just insert the floppy disk and Go! 

You will be shocked and amazed by the secrets that can be discovered about absolutely everyone! 
Find out the secrets they don 't want you to know ! About others, about yourself! 

It's INCREDIBTE what you can find out using the Internet Spy and You and the Internet! You'll be 
riveted to your computer screen! Get the software they're trying to ban! 

This ability to source information from disparate resources, add then together an 
adversely influence corporate reputation is a potential hazard in many ways. In 
particular in the case of Cyber Stalking. 

There are cases where cyber stalkers have created sites about employees. 



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Since February 1997, Bill Sheering has operated a Web site which contains four 
general types of content: (1) Sheehan's grievances against government officials and 
private parties, most of them credit reporting agencies and debt collection services; (2) 
Strongly worded expressions of opinion (e.g., referring to a corporation as "criminally 
insane," etc); (3) allegations about corporations and persons which were claimed to be 
defamatory; (4) Information about employees of companies. 

After Sheehan filed his lawsuit, he added to the Web site information regarding 
defendants' outside counsel. 

The information about employees includes home addresses; street maps identifying 
the locations of the addresses; home telephone numbers; fax numbers; social security 
numbers; photographs of automobiles and their license plates which appear to have 
been taken in public; and photographs of people which appear to have been taken in 
public. Sheehan declares that he obtained this information lawfully, from such public 
information sources as the Washington Secretary of State and other Internet sites. 
Sheehan's Web site contains no explicit encouragement for readers to engage in any 
specific conduct, or to use the information about employees or attorneys in any 
specific way. Other than the actions of Sheehan himself, the record contains no 
evidence that any other person has ever contacted any employee or any individual 
identified in Sheehan's Web site, as a result of viewing the site. 



u ^ 



.[±i^3^ aj B a a 




(a map taken from Sheehan's site) 

Never-the-less, there are details, shown on the Web site and presented in court about a 
number of employees of a number of companies. 

The protection of employees, and in particular employees whose reputation is valuable 
to the company is a matter of reputation management. The legal case is difficult to 
follow round the world and so protection is the first line of defence. 

There's no question that cults, conspiracy groups, and the lunatic fringe have found 
homes on the Internet. Nor should this surprise us. The Internet is, if nothing else, an 
effective medium. Of course fringe groups are going to take advantage of this 
technology. How could they not? The key for reputation management is to be aware 
of the problems and to ensure that all employees are aware and alert to these issues. 



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PROTECTION FROM CYBERSTALKERS 

Email is a favoured medium for cyber tormentors. Obviously, everyone who's 
received email from an employee has access to their email address. With some on-line 
services, such as AOL, screen names are also an email address. And if they have ever 
posted an item on a newsgroup, the email address may be available to anyone who 
reads that item. 

But employees do not have to take any direct action to put themselves at risk. People 
leave information behind every time they visit a site. Try visiting 
www. Anonymizer.com . and click the "Don't believe us?" link to get a glimpse of the 
sorts of information presented, often without knowing it, every time they surf the Net. 
(The site also sells tools to enable you to surf anonymously.) 

There are a lot of helpful tools about such as http : //consumer. net/index, asp 

There are other forms of email stalking and harassment aside from obscene letters. It 
is possible to forge email identities, to be used for posting messages aimed at 
embarrassing or discrediting your company. And more technologically sophisticated 
email harassers may send a mail bomb, filling your mailbox with hundreds or even 
thousands of unwanted messages. 

Principally to help protect individuals, a number of organisations have sprung up to 
help avoid and protect people from the worst excesses of the Internet. Managers can 
put in place defence mechanisms and may consider that they have a responsibility so 
to do. 

Examples such as HateWatch, (http://hatewatch.org) are Web based educational 
resources and is an organisation that combats the growing and evolving threat of on- 
line bigotry. Originally a Harvard Law School library Web page, this project soon 
grew too large and the need for a more activist orientated organisation became 
apparent. 

In 1996, HateWatch incorporated in Massachusetts began to actively monitor hate 
groups on the Web. 

Among other resources, HateWatch now keeps the most up to date catalogue of hate 
groups using the Web to recruit and organise. HateWatch is considered an innovator 
in the use of Web based outreach and is a leader in the fight for civil rights and social 
justice. 

Cyberangels f http : //cyberangels . org ) whose mission is to help create a user- friendly 
and safe on-line surfing experience for everyone! They have three goals: 

1 . safety and technology education, 

2. providing help to law enforcement and to Internet users in need and 

3. protecting the innocent on-line. 



Finding out who is the perpetrator of malicious content is not too difficult. The 
Internet tools for tracking a large proportion of those who pose a threat are readily 



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available and include: littp://samspade.org/ or littp://www.networksolutions.com/cgi- 
bin/whois/whois and there are many more. 

As always with the Internet awareness and common sense rule. First comes 
awareness. Awareness of the issues is important and this paper indicated where more 
information can be found. In addition monitoring is an important aspect of reputation 
management. Common sense, including the process of making employees (and 
especially directors) aware of the pitfalls, will be applied by all good companies. 



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INVESTOR RELATIONS 



In June 1999 Ian Capp, President of PR Newswire spoke to the American Chamber of 
Commerce about the Internet and its influence on global investors'*^. 

"There is no question that the World Wide Web has arrived as a viable investment 
tool. Four out of five investors report that they now access corporate information via 
the Web, up from only 22% in 1996," he said. 

"There are an estimated 7.2 million investors trading on-line today with equity assets 
of $420 billion, which are expected to triple by the year 2000. Investors want easy 
access to company information, from mergers and acquisitions to personnel 
announcements anything that will affect the price of the stock." 

"More than 1500 foreign companies sold equity in the United States in 1988. U.S. 
investment in foreign companies increased exponentially from $91.5 billion in 1988 
to more than $600 billion in 1998. We are now in a period of 24-hour, global trading, 
and corporations must be complete in any statement they issue, because that 
information can be traded on ~ at any time ~ somewhere in the world." 

Of course, in Internet terms, this was a long time ago. Global brokers, traders, analysts 
and fraudsters are now active in every form of information provision and 
communication channel on the Internet. 

Freeserve have announced plans to launch a new on-line trading service in 
conjunction with GlobalNet Financial, Canada's First Marathon and Mesinrow 
Financial in early 2000. 

The move is an attempt to cash in on the burgeoning on-line retail trading market. A 
recent survey by Gomez Advisors and Harris Interactive found that within by first 
quarter 200 the on-line trading community will swell to 16.28million. 

The service will offer on-line trading and brokerage to retail investors and also act as a 
clearing house for British brokers looking to expand into other European countries. 
The new venture plans to compete with existing on-line retail trading houses in the 
UK, E*Trade and Charles Schwab. 

Halifax and Prudential have also announced plans to launch an on-line retail trading 
service and competition is set to be high given Freeserve's plans to charge well below 
the average £20 fee for daily trades. 

Gomez Advisors and Harris Interactive found that a high proportion of investing 
netzines already have a full service broker but that here was a significant number who 
have no accounts but use on-line brokerage services and read the research reports. 

According to Gomez analyst Dan Burke, the typical US Internet stock trader is now a 
mainstream investor as opposed an early adopter. Accordingly those brokerages which 



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provide mainstream services will be the ones most likely to garner the majority of the 
expected influx'*^ 

With many markets and thrice as many regulatory systems, there is a bureaucrats 
conspiracy to make global trading hard. Information applicable to one country or state 
is not applicable to another. This is the Internet. All information is available and 
people have immediate contact round the world and round the clock. The 
conventional rules apply very lightly. 

Investor Relations managers now need to be of the Internet Society. They have to 
prepare against a range of eventualities that will, sooner or later afflict them. Learning 
from the case studies here will provide some of the defences needed and will help 
prepare for the unexpected. 

At the same time, in order to reach out to both private and institutional investors, 
closer attention is needed to the promotion of capitalism, investing , information, and 
interactivity, including means to buy shares, or face the consequence of being left well 
and truly behind. 

Internet Society citizens will not have the patience to wade through the present 
systems. Its not their style. 



SHARE SCAMS 

There are a host of scams. Professional Internet promoters, some with elaborate 
briefing sites and any number of ways to avoid regulators. 

Masquerading as 'Analysts' they offer a range of services. And look very appealing. 
The content of www.financialWeb.com/stockdetective is packed with scams and 
promotion devices, names people and companies and shows Web site URL's. It has a 
marvellous page of alleged scams called 'Stinl<y Stocks'. 

Not all such sites are so safe to visit. Some offer information about scams and are the 
heart of them as well. 

The Canadian Globe and Mail reported in April 1998 that regulators in three countries 
investigated an international stock sales scam involving a group that used a Canadian 
brokerage firm's Web site to lend itself credibility. 

The group, which sold stock in fictitious companies to victims in Sweden, operated 
under the name Turner Phillips and said its head office was in Vancouver. 

In fact, regulators have no idea where the firm operated from or who is behind it, Lang 
Evans, compliance officer at the British Columbia Securities Commission, said: "It's 
quite an elaborate scam. . . . We're not even certain that the names are anything more 
than pseudonyms or aliases." 

The BCSC published notices to alert the public to the fraud, which used boiler-room 
sales techniques and the Internet to pitch shares to investors. The notice said the 
scheme "has been recently conducted on an international scale, resulting in the loss of 
millions of dollars to affected investors world-wide." 



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The scam worked like this: 

Turner Phillips found a novel way to make it appear as though it was a member of the 

Investment Dealers Association of Canada, three Canadian stock exchanges and the 

NASDAQ Stock Market in the United States. 

It copied all the information on the Web site of an unnamed Canadian investment 

dealer that is a member of these self-regulatory agencies and superimposed the name 

Turner Phillips onto that firm's data, then posted the material to its own site. 

Turner Phillips contacted prospective victims over the telephone and then referred 
them to the Web site for more information on the firm. Although Turner Phillips said 
it had its head office in Vancouver, all it had in the city was a mail drop and a 
telephone answering service. Calls placed to the Vancouver number were forwarded 
to a location in Washington State and then from there to another location. Mail was 
forwarded to somewhere in Ontario. 

Regulators in British Columbia, Alberta and Ontario in Canada, the Securities and 
Exchange Commission in the United States and officials in Sweden launched an 
investigation on March 20 after complaints from about six Swedish investors. 

This case mirrored a similar one in the previous year. In that case, an Irish-registered 
firm sold shares in three small U.S. companies before it was closed by securities 
regulators. But even after the SEC began investigating that case, officials at the Irish 
company posed as securities investigators to entice more money out of their victims, 
according to the Financial Times. 

The Irish firm approached customers who had already bought shares from it with 
offers to buy back their shares at many times the market price. These offers were 
dependent on the customers paying advance fees. The men posing as investigators 

gave assurances that the offers were genuine. The fees customers paid disappeared, thus multiplying 
their losses. 



Some companies are formed and have Internet names that look very familiar. One 
Stinky Stock candidate on the www.financialWeb.com/stockdetective site is B.A.T. 
International, called by Stock Detective "B.A.T. Out of Hell". It has no Links with the 
UK Company, BAT Industries. Its US namesake's reputation is poor and in the Global 
market for information there could be confusion. 

In an Autumn gale of e-mailed press releases and advisors notices, there is every 
opportunity to create chaos with a company's shares. 



GULLIBLE INVESTORS 

An invitation to invest comes in many guises. The following is but one example: 

From: Internet IPO [mailinglist@504ipo.com] 

Sent: 07 August 1999 07:17 

To: investor2@504ipo.com 

Subject: Internet Stock Offering - IPO shares 

INTERNET PUBLIC STOCK OFFERING 

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MANAGING REPUTATION IN CYBERSPACE 



CD EXPLOSION CORP., a Delaware Corporation, is 
offering up to 625, 000 Shares of Common Stock at $1. 60 
per Share. Minimum Purchase of 200 Shares Required or 
$320 USD. 

Shares in this publicly owned Internet company are 
available to a select number of sophisticated 
investors who meet the requirements set forth in Reg 
D. Foreign and non-residents outside of the United 
States of America may participate in this offering. 
Proceeds to fund expansion of Internet operations and 
satisfaction of market listing requirements. This 
Private Placement offers the opportunity for investors 
to take a position in the company BEFORE the stock 
begins trading on the OTC Bulletin Board or on NASDAQ. 

A copy of the company's official offering circular, 
subscription docs and Website URL are available to 
Accredited Investors only by filling out Web form 
located at: http://www.504ipo. com 

THIS OFFERING IS A VAILABLE TO FOREIGN AND 
NON-RESIDENTS OUTSIDE OF THE UNITED STATES OF AMERICA. 



NOTE: This message is sent in compliance of proposed 
new e-mail bill: SECTION 301. Per Section 301, 
Paragraph (a)(2)(C) ofS. 1618, further transmissions 
to you by the sender of this email may be stopped at 
no cost to you ". See instructions below. 

REMOVAL INSTRUCTIONS: 

Our NO SPAM policy let us only send emails to people 

we have contacted or has answered to a prior mailing. 

If you received this in error, please reply with 

"REMOVE" in the subject line. We apologize for any 

inconvenience. 

Experience shows that such unsoHcited offerings abound and that some people, 
without further investigation will put money into such stock. The above offering may 
be genuine, but a full and proper investigations (going well beyond the Web site 
mentioned) is required before a penny should change hands. 

Some reputation influencing Internet citations are not to be believed. 

A Web site can look good but can also be the front for a $multimillion scam. The 
Australian Securities and Investments Commission (ASIC), as an educational 
exercise, revealed how it fooled more than 233 people to commit more than $4 
million on a fake Internet investment site. 



http://www.smbi.com.au . 



David Phillips July 1999 Pa ge 73 of 

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MANAGING REPUTATION IN CYBERSPACE 



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Investors in "Millennium Bug Insurance" were told they were on to a sure thing, with 
promises of a tripling of their investment in 15 months. ASIC Chairman Alan 
Cameron said during April 1999 that 10,200 people visited the fake ASIC site, 233 
people committed themselves to $10,000 and $50,000 investment packages and 1,212 
people asked for more information about the investment. 

"This shows how willing people are to part with large sums of money without finding 

out anything about the company they are giving their money to," said Cameron. 

"Some people, who might 

normally question the validity of an investment offer, seem to think that offers on the 

Internet come with some authority. They don't! Taking advice over the Internet is the 

same as taking advice from 

someone on a street- corner." 

Cameron told people to be sceptical about offers which look too good to be true, 
advised them to check with ASIC for registered investment schemes and contact 
financial advisers. 

The concern many have is that the shares of a perfectly respectable company will be 
touted in this fashion to millions of potential investors by a person wanting to lever up 
stock value as part of a scam. 

In a few hours, the share value of a company can change for no apparent reason and 
the Investor relations manager will be faced with explaining to the Exchange and its 
investors how its value has been affected. 

There is precedent. 

A phoney Bloomberg tip, part of a disguised Web page hoax about a purported take- 
over of PairGain Technologies, prompted on-line speculators into a feeding frenzy 
and sent shares of the company's stock soaring 34% on April 7 1999. A Yahoo chat 
room visitor publicised the page's existence. A lot of people visited it and decided to 
buy the stock. 

The whole scam was invented by Gary Dale Hoke of Raleigh, N.C. Hoke, a PairGain 
employee, who owned stock in the company, which makes high-speed Internet 



David Phillips July 1999 



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connection products. The story falsely claimed that an Israeli company was acquiring 
PairGain for $1.35 billion in cash. Shortly after the story was posted, PairGain's stock 
surged from $8.50 per share to $1 1.25. The stock later dropped after the hoax was 
exposed. 

The FBI traced his work through Net access logs subpoenaed from Yahoo, Hotmail, 
Angelfire, PairGain, and MindSpring. Eight days later, he was found and arrested by 
the FBI and charged with posting a false news story on the Internet. 

With a recent explosion of interest in Internet chat rooms, stock market Web sites, and 
on-line trading, securities regulators must move quickly. "The US Securities 
Commission will dedicate a lot of resources to it because they want to prevent 
copycats, and this has gotten a lot of publicity," said Washington lawyer Harry J. 
Weiss, a former SEC associate enforcement director. 

The range of frauds, from selling bogus investments, manipulating stocks, setting up 
pyramid and Ponzi schemes, operating without a broker's license is quite significant. 

"The Internet is clearly the marketing vehicle of choice for con artists in the '90s," said 
Bill McDonald, chief of enforcement for the California Department of Corporations. 
"It's cheap, it's speedy, it's anonymous - all tremendous advantages for fraud artists." 

At the state Department of Corporations, a small squad of cyber sleuths has shut down 
dozens of scam outfits in California and taken legal action against 1 84 defendants. 

At the SEC's Office of Internet Enforcement, a cyber force of 125 attorneys, 
accountants and investigators spend thousands of hours cruising the Web for 
suspicious activity. 

Before the Internet, a few hundred victims suffered. Now, with many millions on-line, 
con-artists have easy access to millions of people. 

Recent lawsuits in the USA (1999) against anonymous contributors to Yahoo's 
financial bulletin Board are most interesting. While not mentioning Yahoo 
specifically as the defendant, the outcome could adversely affect all providers who 
offer anonymous services for users of the Internet. 

The recent case where Wade Cook Financial of Seattle sued 10 'John Does' 
(unidentified persons) for making allegedly defamatory comments about it on the 
Yahoo Bulletin Board gives pointers as to where reputation management may 
eventually go. 

Erroneous postings using pseudonyms alleging that the companies' founder had been 
arrested for accepting bribes "used the anonymity of the Internet to damage the 
reputation and undermine the business of a legitimate company" claimed attorney 
Paul Anderson, who represented Wade Cook, in an interview with Reuters. 

While the American Civil Liberties Union accepted that such circumstances would be 
defamatory, it is disturbed by the possibility of a flood of litigation against people who 



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participate in on-line discussions and could stifle meaningful debate on bulletin 
boards. 



DISGRUNTLED EMPLOYEES 

David Sobel, the general consul at the Electronic Privacy Information Centre, 
identifies an issue where a company has a legitimate need to protect itself from 
disgruntled employees or ex- workers who make scurrilous postings in order to drive 
down share prices and the legitimate reasons for on-line anonymity. He says: "If 
you're serious about prosecuting crime on the global communications infrastructure, 
you have to have traceability." 

In the Raython case, the company asserts that employees leaked proprietary technical 
and financial data via the Internet. While an employment contract may bar employees 
from discussing company secrets in public (and confidentiality law is more widely 
applied in Europe), the First Amendment may give employees a right to do so. Sobel 
says: "The Supreme Court has said the First Amendment protects the right to 
communicate anonymously, so I do see a First Amendment problem with these cases." 
A company may be protected in the UK but not in the US and as a result the story will 
be available everywhere. 

How the USA reacts to these issues is important for the rest of the world. In first place 
the USA is the most mature Internet culture in the world. It is also the biggest user and 
is likely to be for a long time. Thirdly, the Internet is global and the standards of the 
Internet rapidly become global in nature. Importantly, much of the information posted 
on the Internet can be considered to have been 'published' in the USA. Finally, the 
Internet is libertarian and liberal by its very nature. 

That these issues should come to such a pass point directly to management of 
reputation and especially to reputation on the Internet. It is hard to be sympathetic 
with companies who are out of touch with their employees and their own e-culture. 

The saga continues with a court ruling in April 1999. Yes, people on the Internet can 
grumble in the anonymity of chat rooms or electronic message boards. 

One of their favourite targets is the boss. In the USA the courts take a different view 
of right to remain safely behind an alias or screen name if they feel what is being said 
could be illegal or a violation of a contract. In a current breach of contract case Yahoo 
had to provide Raytheon Co. with all the personal information it had on 21 defendants 
for a case alleging they disclosed "certain Raytheon proprietary and confidential 
information on the Internet" via anonymous postings on a Yahoo electronic message 
board. Two Raytheon employees have already resigned. 

Experts say the requirement to give up information is not that unusual. America 
Online did much the same when it gave law enforcement officials evidence to track 
suspected "Melissa" virus author David L. Smith. The Raytheon case, however, offers 
a clear lesson to users of electronic messaging systems and other on-line services: It is 
important to examine carefully the rules under which on-line pseudonyms can be 



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revealed. Yahoo, for one, requires users to read and agree to its policy before they can 
use the free service"*^. 



PROTECTING INVESTORS 

Whereas, this information is available to US investors. The UK authorities have very 
little offer British citizens. The London Stock Exchange site 
( www. londonstockex. co.uk ) simply invites visitors to Internet share dealing 
companies. Its not that UK organisations are all innocent. 

World Investment Network Ltd. looks like a typical financial Web site. It shows e- 
mail addresses, telephone and fax numbers, a Palo Alto office. It has on-line links to 
the Federal Reserve, J.P. Morgan, the New York Stock Exchange. An investor surfing 
the site last year would have found an investment offer called "The Winsell $35K 
Lease $1 Million Program." This "non-risk" and "high-yield" program guaranteed an 
astounding 40 percent return every 15 days, according to the Web site. An initial 
$35,000 stake would make $3 million in one year, the site claimed. 

Suspecting fraud, the U.S. Securities and Exchange Commission launched an 
investigation last year into the World Investment Network and its 61 -year-old 
president, Theodore O. Pollard. In May, Pollard was arrested for ignoring two SEC 
subpoenas. 

Much of the evidence about share scams is for companies with small capitalisation. 
One big UK company has been hit quite hard and yet another saw an interesting rise in 
price after Internet gossip in mid 1999. 

Managing comment and surprise events emerging via the Internet is important for 
investor relations managers and its not all from gossip on newsgroups and chat. 
Analysis now expose much more of their information on Web sites and the ability to 
collect and collate corporate information from the Internet is significant. At the 
beginning of 1999 there were no UK investment chat sites and the handful of 
newsgroups were uninspiring. In less than six months, the scene had changed entirely. 

The ability to identify, sift, and assimilate financial information on the Internet is 
passing through a phase of remarkable development. In addition this capability allows 
investors to act very fast. 



THE INVESTOR SITES 

The internet has been a boon to corporate America and has brought millions of people 
investment opportunities unheard of two or three years ago. It is a shame that the 
London Stock Exchange has such a stuffy site. Nice picture of the London skyline 
though. 



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Managing investor relations in the UK has long required an internet page or more 
devoted to Investors and shareholder issues. These pages, designed for institutional 
investors are, of course exciting. 

In the interactive age, when people need information in about eight seconds from 
finding the site, all the references from the LSE take one immediately to the Investor 
Relations page of every company. This page, explaining the significant benefits of 
adding the company's stock to one's portfolio is interesting, informative and offers all 
manner of aids in making a decision and for buying and selling its shares. 
Alternatively, the truth is that there is no hyperlink from the London Stock Exchange 
at all. It is a market that does not want its members to be known. 

All financial institutions and Investor relations experts are in an information race. 
Having available information round the clock for international audiences is now 
critical. 

The financial bureaucracies like the LSE, are so far behind the average teenager in 
ability to acquire and provide information and to communicate that they may not be 
able to catch up. 

NASDAQ, now old in Internet terms showed one way forward. Its site is brash and 
exiting compared to LSE. There is much to do. 

With thousands of people active in shaping opinions about the nature of capitalism, 
the merits of shareholding and trading on-line, the European stock markets are dull 
and uninformative. There will have to be a change if they are to be globally 
competitive for the Internet Society. 

Of course, the more aware Investor Relation manager will be monitoring the Internet 
for references to company stocks. The cost is not exorbitant (about £500 per month) 
and includes comments of Broker's sites and from analysts. 

Promoting shares using the Internet is covered by the Rules of the Stock Exchange 
(not that the LSE has made much effort to guide companies in this field so far), and 
within these rules, IR managers have considerable scope to interest and inform 
shareholders and potential shareholders. 

As we now know, investors seek information about companies and their shares using 
the Internet. 

The rules for attracting people to the financial pages of a corporate Web site are not 
dissimilar to promotion of other aspects of the business. 

While most are dry and unappealing, some companies are now making an effort to 
interest shareholders, bring them back to the site and create a genuine 'family' feel 
about the company. By creating a virtual community with an interest in the company 
and its shares, share values can be sustained and enhanced. 

In the first place, the financial pages of a Web site need to be designed as a whole and 
specifically aimed at shareholder interests. Even institutional investors like to see well 



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designed and welcoming financial pages. They like to see a company promoting the 
merits of share ownership, and to be able to access Analysts and Newspaper 
comments about the company from the site. They are interested in events that will 
affect stocks and corporate decisions aimed at enhancing (or protecting) share values. 
Of course the financial information has to be included and, on a Web site, they can be 
fun, interesting dynamic and worth re-visiting on a regular basis. 

Slow sites and pages that look like copies of the Annual Report (looking like a 
brochure instead of a Web site), are, of course a big turn off Not all investors have 
fast ISDN lines so that the speed of a site is important. 

The return for a company is measurable. How many people turn to the financial pages 
of a Web site (and how many access this part of the site directly without clicking 
through umpteen pages of 'our history' and 'a view of our factory in Cayman Islands') 
and then dwell on these pages, gives an indication of potential investor interest. 

We know that if the site is designed to offer an interactive relationship, then it will be 
re-visited and, in addition, sustaining the interest of existing shareholders will aid the 
development of a share holding virtual community with the benefit of sustained, 
continued and enhanced investment. 

Offering simple access to brokers and helping investors buy shares is essential (not 
just hyperlinks but a more proactive and involving experience) and it also offers the 
capability to measure the extent to which the Internet Community looks at and forms 
an opinion to buy. 

There is evidence of the effect of 'brand equity' value obtained in this way bringing 
Netzines (including investors) back to a site even if they have had a previous bad 
experience. 



VERY PUBLIC AFFAIRS 

Influencing the democratic process and government is an area where the Internet is 
gaining considerable force. 

All over the world lobbyists and the lobbied use the Internet. 

For the lobbyist, the Internet provides the complete resource and details of every 
politician and mandarin. It offers information about party policies, the policies and 
agendas of other organisations and institutions (and lobby groups). There is 
information about consultative processes, legislative programmes, draft Bills, debates, 
advisors and much more. 

In the UK, the most secretive of Governments (followed by France and then the EU) 
has the slowest sites and the most difficult to navigate (so you use alternative sources 
that are quicker). In addition vast rafts of government policy making and advice 
remains as secret now as in the days of the Raj. The mandarins and the political elite 
have not yet found the Internet 'on-button'. 



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It is easier for a Welshman to communicate via the Internet with Bill Clinton than the 
Prime Minster (the server is always overloaded), a Scotsman to chat to the FBI than 
the Scottish Office and an Englishman to e-mail the Kremlin (try it - 1 speak from 
experience). 

The second most stuffed shirts in lobbying are the lobbying companies who take their 
lead from the Central Office of Information and have even slower Web sites and even 
less interactivity and absolutely no information not available for free from Altavista. 

On the other hand, the lobbying groups from Friends of the Earth to the Countryside 
Alliance have smart, informative, interactive sites with lots of helpful and informative 
links to equally good sites full of information. They are designed to appeal to 
Netzines, draw in members and supporters which offers lots of fun and games to be 
played with Parliamentarians and Government Ministers. 

Of course, the lobbyist still has to use snail mail (although I cannot imagine why - 
only bank managers are less approachable than politicians via electronic means) and 
meetings with officials, parliamentarians and Government Ministers. 



CREATING CYBER LOBBY SITES 

The UK lobbyists have an Internet job to do as well and will be one of the great 
beneficiaries in Cyber Society. 

In the first instance, access to information, allied interests and political activists is 
now very simple. In addition there is as much briefing material as anyone can want 
ready from a variety of sources. The effective way of getting information about what 
the Government is doing and what is said in relevant parliaments is to use the fast 
monitoring services, Web tracking software and specialist search engines. They find, 
sort sift and produce information quickly and cheaply an example might be 
Cyber Alert (http://www.cyberalert.com)for monitoring, the Web, Discussion Groups 
and on-line publications (four hourly) Mindit ( http : //mindit. netmind. com ) for Web 
page updates and Altavista for exploring the Internet. This will keep information 
flowing quickly and inexpensively. These devices will provide details of MP's and 
their interests, committees and outside interests. 

The same applies to many councillors and many government officials. Local 
Government information in the UK is very patchy with many local councils without 
any serious information available at all (try library sites). 

For the sophisticated political lobbyist, the ability to use data-mining software will 
bring significant rewards. These programmes allow the campaigner to cross reference 
information to show relationships that would normally take months of research and 
cross tabulation (see 'bots' on page 13) 

Creating a well informed brief, finding links to like minded or similar campaign 
organisations and re-enforcing your plea with others pursuing the same goals is an 
essential element. 

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The means of building relationships fast is available using e-mail. 

Choosing to use discussion groups, chat, or a Web site is a matter of tactics (and you 
can use all three. 

The key issue for all campaigns is to create a constituency that politicians cannot 
ignore. This can be a constituency of employees or the nation as a whole but if they 
are well informed, know, understand and are helped to influence your goals through 
the Internet, you have the considerable power of the Internet Society at your elbow. 

Creating a campaign Web site (hosted free and requiring a few hours of site building) 
is a matter of hours away. 

Most activists and supporters are now available to you and the process of timetabling 
activity and motivating supporters is hours away. 

In a very short time a virtual community (large or small) can be well underway and the 
opportunity to use this powerful information and communication Society is ready and 
at the disposal of the practitioner. 

Of course, some companies have long running campaigns and have them readily 
available for visitors to their site (and ensure that hyperlinks from other campaigners 
are direct to the relevant pages). 

On these sites many companies include details of how they work with Government at 
local, regional, national and EU wide levels. In addition many provide access to other 
relevant information sites to aid netzines seeking information and access to relevant 
organisations. 

Effective lobbyists, will have mini Web sites ready for the relevant information to be 
included to ensure that if an issue breaks quickly, an Internet presence is almost 
immediately in place. 

Where there is a need for consultation and exchanges of views properly constructed 
discussion sites will be ready with effective discussion group hosting (use the The Art 
of Hosting Good Conversation Online by Howard Rheingold as your guide 
http://www.rheingold.com/texts/arton-linehost.html). 

For really effective campaigning, it is worth taking a leaf out of the activists examples 
spread widely over the Internet. 

Lobbying aided by the Internet Society is so much more fun and adds a significant 
dimension to other forms of campaigning. 



THE LAW FOR THE INTERNET 

There is the law and the Internet and there is an emergent Internet law. 



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The latter, with help from off-line civilisation, is a process of open debate and critical 
evaluation. But the assumption is that users have to be very grown up and responsible 
for their own actions. As we know not all netzines are grown up irrespective of their 
age. 

WHERE ARE THE NATIONAL BOUNDARIES? 

The German media corporation, Bertelsmann is all too familiar with the issues of 
trying to reconcile clashing national laws as they affect the Internet. 

The prominent U.S. Jewish group, the Simon Wiesenthal Centre, asked Bertelsmann 
to make sure that books like Hitler's Mein KampfmQ not sold in Germany through 
barnesandnoble.com, Bertelsmann's joint venture with U.S. bookseller Barnes & 
Noble. The distribution of such books is illegal in Germany, but allowed in the United 
States. 

Of course banning books in the USA is illegal and so Bertelsmann is taking the lead in 
getting multinational corporations to help unify national regulations relating to global 
electronic commerce. 

Bertelsmann's CEO, Thomas Middelhoff, is heading up a newly formed group, the 
Global Business Dialogue for Electronic commerce, known as the GBDE. 

The GBDE sees itself both as a self-regulatory body, which will make suggestions for 
how companies should conduct e-commerce, and as a lobby group, which will work 
with politicians to achieve its goals 

These companies include Disney, Nortel, NEC, Fujitsu, Toshiba, DaimlerChrysler, 
Deutsche Bank and Electronic Data Systems. 

The group is opposed to the 'patchwork' of laws that apply to the Internet and many 
companies have to reconcile, for example, the U.S. tradition of allowing freedom of 
expression and stricter laws elsewhere designed to protect individuals from material 
that incites violence. 

The task the group has set itself is to explore the law in areas such as security, 
consumer trust, advertising, infrastructure, copyright, data protection, taxes and tariffs 
and legal issues. 

The group will present findings in September. 

It is notable that this group should identify so many areas where there are major legal 
differences and thus it is difficult in a paper such as this to cover the whole issue of 
the Law as applied to the Internet. 

The Yahoo news pages (http://www.yahoo.co.uk/headlines/) covered the story and 
added to it: 



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A representative of Amazon in the UK believes all the company can do is abide by US 
law. "This is about freedom of speech in the US," she says. "It may be illegal to sell 
such books in Germany, but this doesn't relate to us." 
This spokesperson was also keen to point out that this is not the only way to 
contravene a country's censorship law. "The fact that some books are illegal in 
Germany wouldn't stop a German tourist going and buying a banned book in another 
country and taking it home with them." 

This argument doesn't quite hold water however, unless Amazon is advocating 
breaking the law. It is illegal for a prohibited publication to be brought through 
customs by a German citizen and any such books will always be confiscated. "It is 
illegal to posses certain publications in Germany but it is not illegal to send something 
if it is not illegal in the country of origin," explained a representative from the German 
embassy in London. "There is also the practical problem that, just as in the UK, mail 
is protected and cannot normally opened and checked. " 

David Kerr, director of the Internet Watch Foundation (IWF) — the UK's independent 
Internet watchdog ~ says that although this is not an issue of Internet censorship, it 
may indicate we are moving closer to international regulation of the Internet. "The 
European Union has done a lot of work in this area, trying to organise some co- 
ordination of international self- regulation," he said. 

The UK witnessed a test case in which a pornography peddler was prosecuted under 
the UK Obscene Publications Act, although the servers hosting his site were based in 
the US. This is another hint of the international perspective individual governments 
are struggling to apply to governance of the Web. 

Within the readers' review section of the Amazon site in both the US and the UK, 
there are a number of comments concerning books such as Mein Kampf that advocate 
racist and Nazi views. Amazon encourages readers to abide by certain guidelines but 
only considers changing a contribution when there has been a complaint from a reader 
or an author. 

Freedom of speech is enshrined in the US Constitution under the First Amendment. In 
the UK however, there is no specific Freedom of Speech Act and indeed the legal 
framework explicitly allows for controls on the publication of material that it is 
considered might incite racial hatred. 

At present, and until the Internet Society settles on some form of rule of law, 
reputation managers need to ensure that where protection is offered off-line it is 
applied to on-line activities and properties, including intellectual property. This has to 
be done in the knowledge that such protection may not be sufficient for protection 
among netzines. 



SERVICE PROVIDERS AS POLICEMEN 

There is recourse through organisations like The Internet Watch Foundation 
(http://www.internetwatch.org.uk) launched in late September 1996 by PIPEX 
founder Peter Dawe. It was created to address the problem of illegal material on the 
Internet, with particular reference to child pornography. It is an independent 



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organisation to implement the proposals jointly agreed by the government, the police, 
the two major UK service provider trade associations, ISPA and LINX, and Mr Dawe. 
Science and Technology Minister Ian Taylor welcomed the proposals as "a major 
industry-led initiative to reassure the public and business that the Internet can be a 
safe and secure place to work, learn and play." 

This site is worth visiting because it points out that, in general, the law applies to 
activities on the Internet as it does to activity not on the Internet. If something is 
illegal "off-line" it will also be illegal "on-line", and vice versa. Responsible service 
providers wish to see that the law can be upheld on-line as well as off-line. A clear 
liability to prosecution exists in UK law in relation to child pornography on the 
Internet, for example. 

The core issue, say IWF, is crime. Legal, but possibly offensive, material raises a quite 
separate issue. It notes that consumers should have the technological means to tailor 
the nature of their, or their family's, experience on the Internet according to their 
individual standards; thus supporting both individual responsibility and the Internet's 
traditions of diversity and free speech. 

Under the code provided for UK service providers is a requirement to take a 
responsible approach to the provision of services. They need to implement reasonable, 
practicable and proportionate measures to hinder the use of the Internet for illegal 
purposes, and to provide a response mechanism in cases where illegal material or 
activity is identified. Service providers should not be asked to take responsibility for 
enforcement of the law. End users should retain responsibility for the content they 
place on the Internet, whether legal, or illegal. The Police should retain responsibility 
for law enforcement. 

IFW make the point that the law that determines what material or activity is illegal is 
the law of the country in which the consumer is affected by it. These proposals relate 
to service providers offering access to the Internet in the UK. They are designed to 
avoid any extraterritorial effect. Service providers established in the UK will take the 
UK law as the relevant standard for their UK operation - whatever the source of the 
material. However, measures adopted by service providers established in the UK can 
only address the problem at source if the material or activity was initiated by their UK 
subscribers. It is hoped that similar approaches can be established in other countries to 
extend the protection afforded across the whole of the Internet. 

The significance for reputation managers is that there is a body that will help but that 
it is up to the individual company to be responsible and alert and to act in the first 
place. 



THE COPYRIGHT ISSUE 

Copyright is something that seems to be frequently abused on the Internet. The ease 
with which information can be copied and transmitted makes abuse simple. 



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Nevertheless, national and international copyright laws still apply to text, images, 
animated images and sound bytes on the Internet. In general terms, proper legal advice 
is recommended (there are exceptions and differences between countries). 

Copyright is the right to copy in any form (reproduce, perform, adapt, publish, publish 
translations, convert to a different format, communicate by telecommunication, rent, 
exhibit in public, etc.), in whole or in part, an original creative work. Original creative 
works include literary, dramatic, musical and artistic works, and computer programs. 
A few things which are not protected by copyright are: names, titles, slogans, short 
phrases, factual information, plots, characters, and methods or techniques. Some of 
these, however, can be protected in other ways. For example, names or slogans can be 
trademarked and in some states like the US 'registered' ® 

Usually copyright is owned by the creator of the work. If, however, you create the 
work as part of employment, the copyright belongs to the company unless there is an 
agreement specifying otherwise. In any case, in the UK copyright applies 
automatically and does not have to be explicitly registered. 

The Universal Copyright Convention states that copyright indication to appear on the 
work must include: a c with a circle around it — © ~ or the word "copyright"; the 
name of the owner; and the year in which the work is first published. Some countries 
also require the phrase "All rights reserved" to be included with the copyright 
indication. 

In some countries, including the UK, you are not required to indicate copyright 
ownership. Any work is automatically copyright protected. You may, however, 
include a notification of copyright — even if the work has not been registered. It is a 
good idea to include a copyright notification for two reasons: 1) to remind people that 
the work actually belongs to someone, and 2) so that anyone wishing to seek 
permission to use the work will know who to contact. 

In principle, a portion of the work, such as a passage quoted from the text, may be 
used or reproduced for private study, research, criticism, review or summary (as in a 
newspaper). It is, however, required that the source and author's name be included if 
the text is intended for a public audience, such as a newspaper summary, or a public 
review or criticism. 

Intellectual property covers much more than copyright. Trademarks and Patents are 
also important as are Registered names (in some countries). 



THE WORLD POLICEMAN HAS NO WHISTLE TO BLOW 

The Internet being global means that protection needs to be International and here lies 
the rub. 

A recommended source of information is the World Intellectual Property Organisation 
r www. wipo.org) . The World Intellectual Property Organisation (WIPO) is an 
intergovernmental organisation with headquarters in Geneva. It is one of the 16 
specialised agencies of the United Nations system of organisations. 



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WIPO is responsible for the promotion of the protection of intellectual property 
throughout the world through co-operation among States, and for the administration of 
various multilateral treaties dealing with the legal and administrative aspects of 
intellectual property. 

Its problem is that it has few teeth, is coming to the Internet late and needs to have all 
countries in agreement. 

The WIPO claim that Intellectual property issues are of central importance in 
maintaining a stable and positive environment for the development of electronic 
commerce is a suspect argument. 

Intellectual property both affects and is affected by electronic commerce in a 
multitude of ways. Accordingly, several WIPO programs concern electronic 
commerce. The most important activities in this area are described under the WIPO 
Ecommerce Activities section, with links to other pages of the WIPO Web site where 
more detailed information on each topic is available. 

WIPO has convened a meeting with ICANN- Accredited Registrars on Domain Name 
Dispute-Resolution Procedures Washington D.C., July 27, 1999. The ICANN 
resolution endorsed the principal of a uniform dispute-resolution policy in the .com, . 
net and .org top-level domains and encouraged the test-bed registrars to work together 
to formulate a model dispute-resolution policy for voluntary adoption. 

So far so good, but an indication of how far the process has to proceed is evident in 
the shape of its comments and actions. It says: "Electronic commerce has quickly 
become a subject of major economic and policy importance as the Internet continues 
its remarkable world-wide expansion. Intellectual property rights are of central 
importance in maintaining a stable and positive environment for the continuing 
development of electronic commerce." 

I suspect that the cat is out of the bag but let us continue with the WIPO news. 

"Five regional consultation meetings on electronic commerce and intellectual property 
are planned to take place in the African, Asian, Latin American and Caribbean regions 
in 1999, in order to generate greater awareness of the ways in which electronic 
commerce is affecting intellectual property and to assist in formulating a timely and 
swift response to those issues. 

"These meetings are to be followed by a major international conference in Geneva 
from September 14 to 16, 1999. The WIPO Conference on Electronic Commerce and 
Intellectual Property will address the impact of electronic commerce on intellectual 
property and will include plenary sessions on developments in electronic commerce 
on the technology, business and policy levels, as well as workshops which will deal, 
on a practical level, with intellectual property and related areas. 

"An issues paper will be published in order to define more clearly the impact of 
electronic commerce on the intellectual property system. The paper will seek to 
identify and examine the major policy challenges posed to the intellectual property 



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system by electronic commerce and the ways in which the WIPO Program is 
addressing, or could in the future address, those challenges." 

In the meantime, most managers are dependant on bilateral arrangements and 
European Directives (many of which remain open to interpretation). 

Starting from the basics of protecting the corporate site is relevant. It begins with all 
the relevant domain names that are to registered for the company, its brands, 
international suffixes (e.g. www.vourcompanv.ie for Ireland) and the obvious abuses 
that wayward netzines may attach to corporate brand properties ( e.g. 
www.yourcompany.org and www.yourcompanysux. com ). 



PASSING OFF 

At this stage passing off should also be considered. 

Global Asset Management, a London based investment company created four Web 
sites and found that the GAM name was being used by a company based in Ghana to 
the extent that search engines would find the Ghanaian company before the real GAM 
sites. 

The Financial Services Authority has now alerted unwary investors to double-check 
exactly where they are sending their funds. There is not a great deal of protection for 
companies where a third party has used a reputable company's name to attract 
business through a bogus Web site. 

"The Internet itself is unregulated. It has been compared to a galactic car boot sale: 
anyone from anywhere in the world can set up shop and offer you anything for sale" 
says Martin Hollobone of Financial Services Authority. 

And it can be hard getting a brand name back as Colgate Palm Olive found. This 
exchange is from the Ajax.org site: 

To: "Benjamin C. Kite"<AJAX@AJAX.ORG 

September 24, 1998 

VIA FEDEX, FAX AND EMAIL 

Foundation Publishers, Ltd. IQuest Internet 

Attn: Benjamin Kite Attn: Robert Hoquim 

518-4 S. 6th 2035 East 46th Street 

Terre Haute, IN 47807 Indianapolis, IN 46205-1472 

Email: ajax@cube.indstate.edu Email: robert@iquest.net 

Facsimile: 317-259-7289 

Re: AJAX.ORG 



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Gentlemen: 

I am an attorney in the legal department of the Colgate-Palmolive 
Company. We understand that you have registered AJAX.ORG as a domain 

name with Network Solutions, Inc. and are operating a Web site using 
that domain. 

We are the owner of a multitude of worldwide registrations for the 
trademark AJAX in connection with a variety of goods including 
household cleaning products (such as U.S. Reg. Nos. 427,106 and 
799,697). Our AJAX trademark has come to be associated by the general 
public with the Colgate-Palmolive Company, and has acquired 
considerable and valuable goodwill. In addition, the mark is famous 
and entitled to the full protection of the law. 

Your use of the AJAX.ORG domain name will undoubtedly dilute the 
significance of Colgate-Palmolive Company's trademarks and will result 
in consumer confusion with respect to any products and/or services 
which you may provide. 

Trademark infringement and trademark dilution are violations of 
federal and state laws. Recent federal court decisions indicate that 

your continued use of the domain name may well result in a 

determination that you have violated Colgate-Palmolive Company's 

trademark rights and subject you to an injunction, damages, 

reasonable 

attorney's fees and costs and other penalties and fines. See Planned 

Parenthood Federation of America, Inc. v. Bucci, 97 Civ. 0629, 42 

U.S.P.Q.2d 1430, 1997 WL 133313 (S.D.N.Y. March 19, 1997); CardService 

Int'l, Inc. V. McGee, 950 F. Supp. 737 (E.D. Va.), affd, 129 F 3d 

1258 (4th Cir. 1997); Intermatic Inc. v. Dennis Toeppen, 40 U.S.P.Q.2d 

1412 (N.D. Ill 1996); Panavision International v. Dennis Toeppen et 

al, 938 F. Supp. 616 (N.D.CA. 1996), affd, 1998 WL 178553 (9th Cir. 

April 17, 1998). 

We therefore request that you abandon the AJAX.ORG domain name and 
provide us with written confirmation that you have done same. We look 
forward to your prompt compliance. 

Sincerely, 

Bret I. Parker 

Trademark & Copyright Attorney 
Colgate-Palmolive Company 
300 Park Avenue 
New York, NY 10022 
(212) 310-2335 
fax (212) 310-3406 



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bret_parker@colpal. com 

The exchange matured: 

Date: Thu, 24 Sep 1998 15:48:35 -0700 

From: "Benjamin C. Kite "< A JAX@AJAX.ORG 

Subject: Re: AJAX.ORG 

To: Bret Parker< BRET PARKER@C0LPAL.COM , robert@iquest.net 

Ahoy to Ye My Dearest Swabbie Bret, 

As an attorney, I'm sure you don't understand anything of the INTERNIC hier- 
archical structure. The top-level domain "org" was created for the establish- 
ment of free and non-profit organizations, of which the AJAX organization is 
one. The "com " domain is reserved for commercial ventures such as your corp- 
oration. Furthermore, I hope you understand that the word "Ajax " is the name 
of a historical/mythological figure, and as such is not a unique trademark 
such as "Cheerios " or "Pepsi ". 

I also suggest that you examine the Website and note well that no remark in 
regard to your firm is made, no logo of your firm is used, and no claim of 
relation between myself or any of my hardy maties and your firm or any of its 
products has been drawn. 

In addition to this, I suggest that you dig up Sophocles and Ovid and sue 
them, since they have written poems and plays bearing the same name. I also 
suggest you take a look at your local phone book and harr ass the owners 
of Ajax Roofing, Ajax Air Filter and Supply, Ajax Air Freight, Ajax Chemical 
Toilets, Ajax Private Investigations, Ajax Technical Authoring, Ajax Grocery, 
and the Ajax Hotel in Limassol, Cypress as well as EMI International (the 
producers of the film "Flash Gordon" in which a character named AJAX GENERAL 
and a spaceship called AJAX WARSHIP are used), the pop/techno musical group 
"Ajax", and the US Army and McDonnell Douglas (for their missile designation 
"AJAX"). I also think there's a Cheech and Chong movie where a woman snorts 
a nose full of Ajax... that might be a great defamation suit for you. Universal Pictures 
and C&C Brown Productions have a lot more money than I do. 

Moreover, I should like to note that up until this very day, I have kept a 
great and inspiring loyalty to the AJAX brand and the Colgate-Palmolive family 
of products, including your scouring powder, your dishwashing soap, your 
toothpaste (Colgate), your laundry detergent, and your cat food. I hope you 
now realize that you've lost a faithful client, and that I intend to 
publicize your draconian attempt to monopolize a word and name that has 
represented nothing but strength and freedom to me. I now regret any revenues 
that I may have generated for your company. 

Finally, I might say that the most charitable thing that the legal department 
of a multinational company such as yourself could do would be to offer to 
remunerate my organization for the time and trouble it would take to change my 
domain name, notify the many users and referrers to said domain, and make the 
necessary changes to the logos, references and computing equipment involved. 



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/ think the sum of $5,252.52 is a reasonable amount to cover this labor and 
cost. 

Benjamin Kite 

Date: Thu, 15 Oct 1998 18:15:29 -0400 

From: Scott Thompson@colpal.com (Scott Thompson) 

Subject: AJAX.ORG. 

To: pberry@ecst.csuchico.edu, ajax@ecst.csuchico.edu 

Dear Messrs Berry & Kite: 

Bret Parker has brought your recent correspondence with him to my 
attention as Colgate-Palmolive's Chief Trademark Lawyer. 

I hope you can appreciate that Colgate 's trademarks are among its most 
valuable assets. They protect our consumers as the principal vehicle 
by which consumers can make sure they are getting the genuine article 
when they purchase our products. Therefore, I hope you can understand 
that we must protect those trademarks vigorously. 

Nevertheless, I have considered your response to Bret's request that 
you change your ajax. org. domain name. I am happy to report that I 
have concluded that your current use should not cause confusion with 
our AJAX trademark. Consequently, I have informed Network Solutions, 
Inc. that a resolution has been reached and it will not be necessary 
to suspend the use of your domain name under current circumstances. 

Very truly yours. 



Scott E. Thompson 
Vice-President and 
Associate General Counsel 



The whole process was long and expensive and is available on the Internet for all to 
see as case study as to why these matters need close attention. 



The Web site graphics, including your company logo to be registered where 
appropriate and watermarked to prevent passing off should also be considered. These 
are technical matters for both your IP legal advisor and Webmaster and should be 
included in the protection of your Internet Intellectual property. Equally, great care 
should be taken when using the copyright of others including the use of their URL. In 
some countries it is illegal to use a URL without permission. 



BEING YOUR OWN POLICEMAN 



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In many ways the Internet is a combination of the Wild West and the Industial 
Revolution. Every company has to protect itself because the rules are sketchy and 
policemen are few. Alert companies are monitoring the whole Internet landscape to 
ensure they do not loose their properties. They look to see who is creating hyperlinks 
to their site to identify if this is a business or consumer opportunity or a threat to 
reputation or IP. 

The most recent law book, and heavier (still) reading is 'A practitioner's guide to the 
regulation of the internet' by consultant editor Heather Rowe, media consultant Mark 
Haftke is published by City & Financial Publishing priced £70 and is written by an 
impressive selection of City lawyers and in- house counsel, this book covers domain 
names, trademarks, unfair competition, copyright, making contracts over the Internet, 
jurisdiction, data protection, advertising, payment systems on the Internet, digital 
signatures, tax implications of the Internet, and best practice for companies in the use 
of e-mail, Internet communications and access to Web sites. 



CYBER WAR 

Internet reputation management extends beyond the commercial sphere into the very 
heart of democracy. It is worth pausing for a moment to review recent findings and to 
identify the commercial applications. 

The horrors of ethnic cleansing, and racial hate was extended to the Internet as part of 
the Serbian aggression towards Kosova. 

Inspired by hate and malice, Albanian Web sites were attacked in 1999 and, as Nato 
became involved, its site and many more became the target for a range of hackers 
spammers and nasty netzines. 

This particular activity is matched by hate sites. A growing problem. There are 
currently 1,426 Web hate sites on the Internet, according to a report by the Simon 
Wiesenthal Centre, the human rights centre based in Los Angeles. This compares to 
600 hate sites at the end of 1997, and just one hate site in 1995. The list included sites 
that were anti-Semitic, anti-Catholic, anti-Moslem, anti-gay, anti- abortion, as well as 
sites that promoted racism, hate music, neo-Nazism, and bomb-making. The Internet 
has served hate groups in two ways, according to Rabbi Abraham Cooper, Associate 
Dean of the Weisenthal Centre. First it has given these groups a sense of 
empowerment, and second it has provided them with an unprecedented opportunity to 
market themselves, unencumbered, 24 hours a day. 

The ' Digital Hate 200 ' report is based on research conducted over a 14-month period 
in North America, South America and Europe. 

Internet war is a two way street as we found in the Kosavo crisis. While much 
comment from the famous Jamie O'Sheay gave the NATO line, a stream of 
information was coming via the net from inside Kosovo and broke the news of high 
than believed 'collateral' damage and poor targeting. This gave the media an added 
dimension they lacked because of the Serbian block on information. 



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The range of attack tools used has grown and needs careful monitoring. Identification 
of such weapons and how they can affect the Internet, not least commercial users, is 
now a priority. 

In addition, we have to develop the means by which we can counter violations to 
provide companies with adequate defence and a capability to inform, and trade over 
the Internet. 

Many companies are now putting in place crisis management capability because of the 
threat from Hackers. To be taken of the Internet during peak sales periods would be 
very damaging. The threat is there and was reported by AP: A group of hackers has 
vowed to keep hitting Web sties across the Net if the FBI do not desist from 
investigating them. Two government sites were sabotaged in June 1999, one of them 
an FBI site, in retaliation for an ongoing FBI investigation. The site is still down. 
In an interview with the Associated Press, an individual by the name of Microchip a 
member of the FOrpaxe group explained that the hacking community are angry at the 
FBI's continued harassment of their community. Microchip told the Associated Press 
that the hacking community believed they had no alternative. 

The individual threatened that if the FBI did not stop harassing them they would crash 
the entire Net. Another group of hackers attacked the US Senate Web site last week 
and rendered the site defunct for several days. 

The FBI are pushing Congress to allow them implement a number of online 
surveillance measures which would allow them wiretap indiscriminately and force 
ISPs to give information on individuals, (source AP) 

In the light of these problems it is not surprising to find that the global Internet 
security software market will be worth more than $7.4 billion by 2002, according to a 
report from IDC Research. In 1996, the global Internet security software market 
generated $1.2 billion. This rose to $2 billion in 1997, representing an increase of 67 
percent. In 1998, the Internet security software market was worth USD3.1 billion and 
its total worth is expected to reach USD4.2 billion by the end of this year. 
The findings are based on a survey of 300 commercial companies in the US that 
generate revenue in excess of $100 million. 

In the light of the foregoing and as a policy decision, many companies may well find it 
prudent to at least identify, and in some cases employ the services of an Internet 
security company. 

In the old fashioned world this would all seem massively expensive. But hey, this is 
the Internet. Technology rules and technology provides a lot of the answers. If you 
compare the cost of Internet security with the cost of keeping the light fingered under 
control in a shop, it's a tiny amount. 

Meaningful protection using search, monitoring and intelligent bots, means that where 
50 lawyers are needed to monitor the Web, one laptop will do it overnight. 

I do not pretend to have any knowledge of the Law, let alone Internet Law. What is 
apparent is the vast amount written about the subject especially on the Internet and I 
would not trust one word in a hundred. 



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The truth is that like much of the Internet Society, much has yet to develop for us to 
have a clear picture. 

I am wary of preventative and legalistic measures because all experience of the 
Internet is that its citizenry will, eventually, find a way round restriction and rules. It 
has to be said that for the most part, this has caused little harm to those who trouble to 
understand how the Internet Society works. 

ACTIVISM 

Over and over again, this book has touched on the issue of criticism and the effect on 
reputation. In some instances there is clear evidence of on-line reputation having an 
effect on a company and corporate performance. 

This is an issue because of its impact on management, the ability of a company to 
perform at peak efficiency and the potential for long term, profitable growth. 

The bigger issue for managers is the ability to react as fast as the Internet and change 
to meet the aspirations of Internet Society. However, part of the mix is sustaining 
worthwhile reputation when so many have such power to deflect managers from this 
purpose from so many directions at once. 

Criticism in the Internet Society is mostly open honest and without malicious intent. It 
may not be comfortable but is, in its way a cry for help that we can answer by being 
better at what we do. In this regard it forms an opportunity. Failing to respond will 
lead us down a much more difficult path. 

THE DOUBLE PARADOX 

It was a chill morning in London on October the 16 1986 and a day that was to create 
one of the pivotal events in Internet Activism. It was the day when a campaign was 
started to put McDonalds in the centre of anti-corporatism by a number of activists. 

It gave rise to the longest civil court case in history between David Morris and Helen 
Steel and McDonald's. 

The appearance of a Web site created by the activists, came in February 1996 when 
Morris and Steel launched the McSpotlight internet site from a laptop connected to the 
internet via a mobile phone outside a McDonald's store in Central London. The 
Website was accessed more than a million times in its first month. It was headline 
news across the world. 

By any standards, the McSpotlight site is big and has an amazing amount of content. 
A large part of the content is critical of McDonald's and some is allegedly libellous. 



David Phillips July 1999 Pa ge 93 of 

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On 19*'' June 1997, after a case said to have cost the company over £10 million and a 
£60,000 settlement against Morris and Steel, the Web site was accessed 2.2 million 
times. 

The first paradox is that McDonald's won the court case but the allegations are still on 
the Web site available to this day (and is mirrored across the world so that if it is 
turned off in one country, its content can be accessed from another). 

The second paradox is that with so much criticism about the company available for all 
to see, the company remains one of the most successful food retailers in the UK and 
across the world. McDonald's is the largest and best-known global foodservice retailer 
with more than 24,500 restaurants in 1 16 countries. Its share price is four time higher 
than when the McSpotlight site was launched and dividends per share are up 44%. 

It there a linkage between corporate performance and Internet criticism? Will there be 
a link as the Internet expands? 

There are a number of considerations. The first is that all this happened a long time 
ago. In 1997, at the end of the court case and 18 month after the launch of 
McSpothght, the on-line population was 57 million (now its 179 million) of which 
only 960,000 were in the UK (over 10 million today). 

Today, the McSpotlight site is really a gateway site for people who are interested in 
anti-corporate activism. Compared to many other activist issues, McDonalds is a 
relative side show. 

McDonalds significance for most people is its brand strength. It is a company that 
delivers on its promise (caviar no, fries yes, silver service no, in a box with a paper 
tissue yes). In this respect it is trusted by consumers. 

The apparent double paradox is, in fact a matter of timing and the fast changing 
dynamic of the Internet. 

The Consumer Opinion pages of Yahoo show a list of rogue sites which reputation 
managers should visit to see examples of what may affect them at any time. 

Smaller brands in a virtual community ten times as big, may not be so lucl<y. So just 
when should a company get scared of the Internet? 

© David Phillips July 1 999 Pa ge 94 of 

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MANAGING REPUTATION IN CYBERSPACE 



REAL WORLD OF CYBERSCARE 

According to USA Today : (Sep 25 1998) "The recent surge in Web sites dedicated to 
damaging the reputation of companies is becoming a problem for many companies'. 

There has been an immense scare for many years as a host of rogue sites have 
appeared. If the Internet has been part of normal society and merely a form of news 
delivery, many brands would have sunk without trace. 

British Airways, Coke, Ford Motor Company, MacDonalds, Intel, Monsanto, Nestle, 
Nike, Proctor and Gamble, Shell, United Airlines, every retail bank and many, many 
more have been subjected to intense scrutiny, detailed and professional criticism 
which had it been in a traditional medium would have killed them off. The Gerald 
Ratner comment and resultant media hype would not figure for a moment on the 
Internet Richter Scale. 

There is no doubt that there is a corporate cost to rogue sites. Many companies pay off 
people who put them up. Companies take perpetrators to court. Shareholders are 
discontent to the point of removing directors and the whole process takes up hours of 
management time. 

Of course, not getting into the position of having to face such an issue in the fist place 
is important and will save the company a lot of anguish and money. If there is wrong 
doing and it is revealed through the Internet, then it will have a devastating effect. 

But for the mainstream companies with nothing much more than a marketing plan to 
hide and a transparent approach towards it stakeholders, the Internet needs no more 
than watching. 

Because all companies are criticised, the problem faced by reputation managers is one 
of the extent to which Internet criticism damages the company's ability to trade and 
what are the tell tales signs that turn an irritant into an issue and issue into a crisis. 

The Internet provides access to information. A lot of it. People searching for 
information will use a Web crawler and then the brand they seek. In this form, there is 
only the danger of a crawler presenting sites that are adverse to an organisation's 
interest which will form part of the search process. 

Reputation is becoming significant for both consumer and business to business 
companies. In the case of the latter, a buyer may prudently decide not to award a 
contract to a company with adverse reputation baggage with it. Equally, consumers 
will shun a retail outlet where Internet news suggests they may be confronted with 
activists. 

Watching and monitoring what people may find when they seek your site should be a 
daily task. Simple and, for the most part without incident. Mystery shopping for your 
site is something that needs to be done anyway (trying to find your company using 
generic and specific search terms across different search engines). There are 
companies that will do this for you at a very modest cost"^*^. 

© David Phillips July 1 999 Pa ge 95 of 

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MANAGING REPUTATION IN CYBERSPACE 



The Internet is also made up of communities. There are thousands of them and few 
have more than a few hundred members. Most only have a handful of 
intercommunication members. These communities coalesce and create larger entities 
but in themselves have a limited effect. 

Almost as an aside I have to mention the few that are very dangerous because they 
identify the means by which a fringe can attack companies and other organisations. 
The virus distributors, hackers and creators of software designed to damage corporate 
effectiveness and bomb makers are examples. These activities are a matter for the very 
non-Cyber policemen. 

As far as my studies have gone, I know of no company that has lost market share, 
reduced turnover, profit or share price as the consequences of adverse coverage in 
newsgroups, activists sites or rogue sites. 

Consequential management re-action, on the other hand has cost a lot of companies on 
all four counts. This suggests the reputation manager needs strong nerves to be able to 
calm members of the board and ensure they are responsive rather than reactive. 

Does this mean that Internet criticism is helpful, or at worse irrelevant? 

Not any more. 

A number of activists believe: 'there is a dynamics of struggles between competing 
groups to establish their perspective as absolute truth. For this reason it is important 
to look at the actions and motivations of actors who seek to halt the progress of 
environmental groups. ' 

There are a number of well known books which deal with including: Global Spin by 
Sharon Beder, Toxic Sludge Is Good For You by John Stauber and Sheldon Rampton 
and Green Backlash by Andrew Rowell. 

They are up-to-date, reporting Simon May Shell's Internet manager. He is reported 
saying he believes that activism on the Internet should not be viewed as a "menace", 
but rather as a "challenge" for corporates. Companies should adopt the Internet for the 
same reasons and utilising some of the same strategies as activists, but with a more 
planned and professional approach. Furthermore, full advantage should be taken of the 
potential of the Internet to monitor grassroots opinion and activities. (Lubbers 
1998:net) 

Taking care of Shell's presence on the web is only one of the Internet manager's tasks. 
He must also monitor and react to what is being written. 'The on-line community 
should not be ignored' May is reported to have said at a conference in Brussels. 
'Pressure groups were aware of the potential of the Internet far earlier than the 
corporate world. There are pressure groups that exist only on the Internet, they're 
difficult to monitor and to control, you can't easily enrol as member of these closed 
groups.' 



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As Internet branding becomes more significant, and e-trade a larger part of 
commercial life, the rules will change. To this extent, and knowing the speed of 
change that is inherent in the Internet, action now is sensible. 

In an ever bigger crowd, being visible will be one of the bigger issues. Being big in a 
crowd also makes a bigger target. An event as ground breaking as McSpotlight in 
2000 would be a very serious reputation management issue. In 1997, less than 1 
Million British citizens had an opportunity to see what was on the site. In 2000 the 
number will be 20 million. 

Inside the Internet Society, there is a dynamic that does affect companies. Companies 
that are closely associated with the Internet such as Intel are affected. Sales are 
affected, the commercial environment is affected and the political environment can 
become quite chilly. There is evidence that, as more companies are exposed in 
Cyberspace, the more effect its on-line reputation has on corporate drivers. 

In addition there are very real markers for when Internet criticism is beginning to take 
hold and there is a process. 

ANATOMY OF INTERNET ACTIVISM 

The first manifestation tends to be in newsgroups discussion and may not mention a 
company at all. Then a Web page appears, detailed arguments and 'evidence' is 
assembled (with lots of hyperlinks). A range of activists groups are recruited through 
claims of allegiance (mutual hyperlinks) and discussion and then calls to action are re- 
enforced (write to your MP, spam the MD of this company etc). The effective 
campaigns is invariably need to develop relationships institutions beyond the Internet. 
The media, church, politicians, pop icons, regulators and many more institutions are 
available for involvement and to be recruited. The most effective activism always 
seems to need for this added, almost third party endorsement in order to be effective. 

This is when the Internet issue hops channels. By this I mean when Internet comment 
appears in the press. Parliament, courts, councils and, even in books. It is also when 
the issues have a real effect on corporate drivers. 

The cost to Ford and Shell was significant (the recall of a product for modification 
and the long drawn out disposal of Brent Spar). In the case of Monsanto, the cost is 
only now becoming evident as that company and its competitors face boycotts of their 
products driven by Internet activist coalitions. 

The anatomy of issues that have an effect are theme based. 

Blatant illegality where the Internet is used by whistle blowers aside the big driving 
issues tend to be about politics, environment, consumerism, discrimination (sex and 
race) and employment. 

The very successful campaigns add several 'themes' together and several 'external 
publics'. In doing so they appeal to a wider audience and gain added third party 
endorsement. 



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This will often provide people to debate, demonstrate and change the business 
environment. 

There is very instructive information all over the Internet on how these processes can 
be deployed. The Mid- Atlantic Infoshop has lots of information of interest to 
anarchists, anti- authoritarian, and other activists. It invites us to: Put some anarchy 
into your life today and learn why anarchists are trying to create a more anarchist 
society. This is a co-operative effort. If your project wants to participate or contribute 
materials, get in touch!' 

Very jolly. 

The one great asset these groups have is passion. Many are to be admired and are 
willing to work with companies. At the other extreme are real anarchists, bigots, 
fascists, left of communists and the mentally unstable. 

At the lunatic end of the spectrum, there need be little concern but a little 
management. A course of actions most sensible managers do every day outside the 
Internet Society. 

There are people who have very set views and will not debate. This form of Mexican 
Stand offtakes time and an appeal to ones own view. 

The real crunch comes with groups that debate, are mercurial and pop up all over the 
Internet and elsewhere as well. 



MANAGEMENT 



The rules for managing Internet critics are the same as for any other form of 
management. 

Having the right attitude is helpful. Anticipate what is probable, master the detail of 
the Internet and activism and practice so that you can react fast. 

That your company will be criticised through the Internet is not in doubt and preparing 
your company, its managers and employees for the shock when they find its happens 
is sensible. Having a Vice Chairman storm into your office showing signs of 
exceptionally high blood pressure is not a good way to start the week - 1 know! 

Investing time reading about accepted behaviour on the Internet (we all think we 
know until we read the expert's advice) is essential and ensure that proposed responses 
can be judged sensibly. 

Recommend managers visit discussion lists (dejanews.com , Altavista Usenet)and 
chat rooms (ICQ at http://www.mirabilis. com or Yahoo chat). 



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Start monitoring Web sites and newsgroups and on-line media. Its not expensive and 
is instructive. Look at rogue and campaigning sites (many are very well made - 
Friends of the Earth have an excellent map system -and are interesting from many 



Internet response 
management 





Anticipate 
70-90% 



points of view) 

Plan responses and practice. 

The routines are simple and the there are protocols you can create to be able to 
respond at speed. Most of this entails work outside the Internet Society ensuring 
managers really understand the nature of their transparent and the porous company. 



The level of calm such simple preparations will engender will save a considerable 
amount of management time and save a lot of money. 

Working with issues management managers, lawyers and Webmasters, the processes 
to be put in place and practised should quickly become routine. 

It is also useful to have a trusted internet research firm near at hand so that if you need 
to find out background you do not have to spend too much time with your browser. 
These research companies have the technical tools to hand and can trace and track 
information fast. 

Managing Internet reputation is mostly about preparation and, like all such 
investments pays for itself the first time its needed. 

The demographics suggest we can expect an explosion of critical comment over the 
next three years and by then the rapid rise of newbies on the Internet will settle down. 

It takes about three years for people to become proficient in the Internet Society. From 
early 1998 to mid 2000 15 million people will have joined suggesting that the peak 
will be in 2002. Preparing for the inevitable effect now is sensible. 

Scary stuff this may be but for some managers real enough already. The rewards 
available from the Internet Society are so big that the threats have to be managed. The 
gene is out of the bottle and e have to face the consequences if we are to succeed. 



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CONCLUSION 

At the IPR symposium in 1995, I said: 'the new media will enfranchise the individual 
with more one-to-one, one to many and many to many communication which will be 
easy by personal 'phones. E-mail and video conferencing. Person-to-person-to- 
machine and database communication will be more important, electronically managed 
and more global. Increasingly this broth threatens brands and corporate reputation and 
needs professionalism to immunise (our organisations) or doctor the effects of the 
brew. 

'In its most perfect form, reputation management sustains relationships with publics 
in a state of equilibrium during both evolution and in crisis. This enhances corporate 
goodwill (a tradable asset). 

'The big change is that many-to-many global communication brings with it loss of 
'ownership' of language, culture and knowledge and that there is a breakdown in 
intellectual property rights, copyright and much plagiarism. This is already a major 
problem. 

'News now travels further and faster and is mixed with history, fantasy and 
technology. Reputation in crisis is even more vulnerable. At a growing rate, the new 
media uses reputation as 'merchandise', 'stripped from the foundations which created 
it, then traded for pieces of silver - and at a discount'. 

I hold by these statements. 

In many of its forms, I have shown how the Internet has and will affect our lives and 
hinted at how it will affect society. While there is much to be wary of, there is much 
to gain. As with all forms of enterprise and especially in all the up-beat hype there is 
downside (but manageable) risk. Knowing that there is risk and its nature is helpful 
and prepares us for it. 

I do not imagine that any one reputation manager will master all the aspects of 
reputation management outlined here. Nor will there be a need to do so. 

In the near future, the Institute of Public Relations and the Public Relations 
Consultants Association, among others will provide substantial resources for the 
practitioner. 

For me there remains a single worrying concern. It is that so much of industry and 
commerce and their reputation management practitioners are blissfully unaware of the 
breadth and pervasivness of the Internet. Furthermore fewer still are aware of that we 
are hardly in the foothills of what it will be. 

Its development will be even faster than to day and the rate of acceleration is yet 
unknown. So far we have seen a lot of people join the Internet Society. In a few 
months this will growth will tail off when 60% of the population on-line and active. 

Only then will we see its development soar. 



David Phillips July 1999 Page 100 of 

104 



MANAGING REPUTATION IN CYBERSPACE 

Today, most managers believe they are catching up but 40% of British company 
directors either do not use the Internet or are uncomfortable with it. They are in for a 
rough ride and will need all the help that can be mustered from professional Internet 
aware reputation managers. It is a great adventure to be in a position to help. 

The Internet offers everyone wonderful opportunities. There will be casualties, of 
course and they will be bewildered and will need sympathetic people round them. 

For the Americans, the Internet is akin to the Wild West. We too are lucky, we faced 
and survived the Industrial Revolution in the 1 8* century. The Internet revolution is 
just as important and the only difference is that instead of taking 60 years this one will 
only take six. 



ABOUT THE AUTHOR 

Coming to public relations from politics, David Phillips, a founder member of Young European 
Democrats, began his corporate career as Public Relations Director with Lancer Boss Group. 

Responsible for Corporate Affairs, International Marketing, Investor Relations, Community Affairs, 
Press and Media Relations he was also a member of the three strong acquisitions team. The company 
grew six-fold to £200 million turnover in six years with acquisitions in UK, Germany, France and Italy. 

He set up Phillips And Company as a Public Relations consultancy in 1985 with clients such as SKF, 
Rockwell Automation, Hughes Network Systems, Tussauds, Hyster Europe, Boss Group, Bitzer and 
Atlet. The consultancy business was sold to Taurus PR in 1997. 

He founded one of the UK's leading media content analysis and evaluation company. Media 
Measurement Ltd in 1992. Its advanced computer programmes for analysis of communications attracted 
an enviable International clientele. The company was sold in 1998. In 1994, he also developed a the 
Clarity Software programme for corporate relationship benchmarking with Dr. Jon White. In 1997 he 
was one of the first PR practitioners to use Neural Network programmes for measuring the effect of 
media relations on corporate drivers having designed one of the most powerful Data-mining software 
programmes with John Braga, a co-founder of Byte, in 1996. 

In 1995, he gave the Millennium Force Lecture at the Institute of Public Relations conference, outlining 
a five year projection of the significance of new media and the Internet for PR practice. By 1998, he 
had developed on of the first Internet Reputation Management consultancies. 

In 1999, he was a co-founder of Internet Reputation Services Ltd, bringing together research, 
monitoring and consultancy aspects of Internet Reputation Management. 

Made a Fellow in 1994, David is the Chairman of the Institute of Public Relations Internet Commission 
and is on a number of Internet practice committees. In his spare time David is 'Joe Green' the 
industrial columnist. 

His abiding hobby is sailing. 



David Phillips July 1 999 Page 1 1 of 

104 



MANAGING REPUTATION IN CYBERSPACE 



David Phillips July 1 999 Page 1 02 of 

104 



' At the time AOL, CompuServe, Demon, and Global Internet were still charging while X-stream, Current Bun, 
breathnet, and Line One were free. AOL broke ranks within a week of the Freeserve flotation and offered a free service 
^ Georgia Tech Research Corporation, GVU Centre, College of Computing, Georgia Institute of Technology, Atlanta 
Georgia, GA 30332 - 0280. 

3 www.spyglass.com 

'^ 'British On-line Behaviour Study' Internet Reputation Services 15 High Street, Nash Milton Keynes, MKl 1 1 AQ. 

^ http://searchenginewatch.com 

"• GVU's WWW User Survey 

^ Datamonitor, 106 Baker Street, London WIM ILA (www.datamonitor.com) 

* ( www.nua.com ) 

' 1998 studv 

'° Source: Global Reach 

" Internet.com 9 July 1999 

'^ Gartner Group www.gartner.com 

'^ Bright Light Technologies www.brightlight.com 

'"^ http://www.albion.com/netiquette/ 

http://www.netpath.net/~gwicker/email.htm 

http://home.olemiss.edu/~chalc/net_writing.html 

http://www.primenet.com/~vez/neti.html 

http://www.templetons.com/brad/emily.html 

http://www.fau.edu/netiquette/net/netiquette.html 

http ://www. vonl . com/vtab24/news 1 02 .htm 

http://www.cs.uu.nl/wais/html/na-dir/usenet/posting-rules/partl.html 

http://www.cs.uu.nl/wais/html/na-bng/news.misc.html 

'^ Cyber Alert www.cyberalert.com 

Other Internet search companies include: 

Nets ear ch 

CyberSearch 

MarketWatch 

Cyveilence 

Ewatch www.ewatch.com 

CyberCheck www.intermountainrkh.com/agency/newmedia/ 

CyberScan www.clippingservice.com 

HyperNews www.hyper-news.com 

Web clipping www.webchpping.com 

'* NOP Research Group: Know Your European Markets, April 1998 

Britain had the highest Internet access from schools and universities. One in five Internet users in Britain, France and 
Germany spend less time watching TV as a result of using the Internet, 33 percent of French users say they now read on- 
line newspapers, compared to 23 percent of Britons. 

" In September 1998 Andersen Consulting published their latest findings on the uptake of e-commerce in Europe. 
The study polled 300 European executives and found the majority of executives were enthusiastic about the future of 
global electronic commerce but did not have any e-commerce strategy in place. 82 percent believe that e-commerce will 
have an affect on their business strategy and 19 percent view e-commerce as a significant competitive threat to their 
business. In the face of this, only 39 percent have any kind of plan in place. 
^^ http://www.nua.ie/surveys/index.cgi 

'^ www.arbitron.com . Arbitron NewMedia, 9705 Patuxent Woods Drive, Columbia, MD 21046 
^° Source: Global Reach 
^' Source: Computer Economics 
^^ http://www.rheing .com 
^^ www.weltanschauung.com to see some of the current thinking on the subject. 

24 

The Art of Hosting Good Conversations Online By Howard Rheingold 

^^ http://csrc.ncsl.nist.gov/training/ethics.tKt 

^^ One such being CyberAlert (www.cyberalert.com) 

^^ Nielsen Media Research has found that households in the US with access to the Internet are 1 5 percent less likely to 

watch TV than those without home Net access. More recent surveys in the UK come to the same conclusions (see IRS 

On-line Behaviour Studies) 

^^ Marketing Metrics is a 2l/2-year project launched in March 1997 under the direction of Tim Ambler and a steering 

group representing the sponsors: The Marketing Council, the Marketing Society, Institute of Practitioners in 

Advertising, and London Business School. SPCA and the Marketing Science Institute (Boston) have since joined the 

sponsor group. 



The aim of the project is to estabUsh how firms now measure marketing performance, what is current best practice, and 
what improvements can be made. Planned deliverables include a comprehensive literature review, improved 
understanding of the drivers of brand equity, clarification of language, and a list of measures from which firms can select 
to meet their specific aims and needs. 
Initial field interviews in the UK by Dr Flora Kokkinaki (Research Fellow) has confirmed that: 

• Practitioners are not satisfied by current measures of marketing performance. 

• Business (profit) plan is far the most important benchmark of performance 

• External benchmarks, market share apart, are seen as less important. 

• There is little concept of, and less shared language, for the marketing asset, e.g. brand equity. 
Quantitative survey data from UK marketers and accountants are now being analysed. 

For Further Information contact the Administrator, Margaret Walls @lbs. ac.uk 

^^ www.nua.ie 

^° http://cyberatlas.internet.com 

31 www.forester.com 

3^ www.ecommercepulse.com 

^^ http://www.iconocast.com/Webattackpres.html 

34 www.wim.co.uk 

^^ http://www.msnbc.com/news/302265.asp 

3^^ www.home.net 

^^ http://www.cyberdialogue.com/index_4.html 

^^ Net Effect Systems 4146 Lankershim Blvd., Suite 301, North Hollywood, California 91602;: www.neteffect.com . 

^^ http://espnet.sportszone.com ) 

4° IRS Survey 

"^^ http://www.cjsm.com 

"^^ Cyveillence, 1555 Wilson Blvd, Suite 404, Arlington , VA 22209 2405 (www.cyveillence.com) 

43 www.motherjones.com 

** Center for Public Integrity HTTP ://essential. org 

'^^ I have removed the address and similar details 

'^ SOURCE PR Newswire (C) 1999 PR Newswire. All rights reserved, http : //www. prnewswire . com 

"^^ http://www.gomez.com/gomezwire/article.cfm?ID=267 l&c=82 

^' SOURCE: San Jose Mercury News, AUTHOR: Deborah Claymon] 

( http://www.mercurycenter.com/svtech/news/indepth/docs/rayth040699.htm ) 

'^^ Cyber Alert is one