Mike Harvey, Technology Correspondent
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The US Securities and Exchange Commission has opened a "preliminary inquiry" into how an outdated bankruptcy story sparked a $1 billion run on an airline’s stock value.
The article about how United Airlines filed for bankruptcy in 2002 was revived when it showed up on a newspaper site’s “most viewed” section on Monday.
From there it was picked up by Google News and later seen by alarmed stockholders. The stock plunged from around $12 to just $3 a share before trading was halted.
The Chicago-based company’s shares did not fully recover once trading resumed on Monday, and were still down at just over $11 dollars at close of trading yesterday.
With the possiblity of legal action in the air, those involved have been hotly disputing who was to blame.
The errors provide a salutary lesson for investors of the power and perils of computer automation and throw a spotlight on Google’s News search technology which, using “Googlebot” algorithms, scours web pages in search of news articles.
To many, the episode has been a reminder that computer programs, no matter how sophisticated, can be a poor substitute for human beings.
The comedy of errors began with just one reader who went to the South Florida Sun Sentinel’s website and viewed a 2002 article on United Airlines’ bankruptcy.
That single visit in the early hours of Sunday morning, a period of low traffic, apparently bumped it into a "Popular Stories" in the business section.
At 1:37am, an electronic Google program swept through the paper’s website for new stories and spotted the link.
Google says its program scanned the piece and, seeing there was no 2002 dateline, indexed the article for inclusion on its news pages.
Three minutes and two seconds later, Google News readers started viewing the story on the Sun Sentinel’s Web site.
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This used to happen constantly at the now stopped newshub.com in it's popular column.
Google can stop this with a small amount of code looking for dates - but Google actually opposes semantic tags in HTML that would make it easy for it to find the dates of articles (etc.)
Joe Thorpe, Victoria,
Maybe its time to start with an FBI investigation on NEWS outlets. Security and exchange why stop there!
TLewis, Hollister, USA
If I had as much confidence in UAL as these guys did, I certainly wouldn't buy back into it. What did UAL do in the last five years to inspire all this confidence?
George Garrett, Manhattan, USA
Someone's brother in law got rich. This was no accident.
Warren, Seattle, USA
Now United knows how their customers feel. They keep replacing Humans with Computers in an effort to save money, gets frustrating.
Steve, Lahaina, HI, USA
"can be a poor substitute for human beings."
It was human beings who generated the run; seemingly all on the back of a single report from a single source. Did nobody think to check whether other reporting agencies were carrying the same story before dumping their own or their clients stock?
Richard Crow , Warsaw, Poland
Seriously, that stock markets are so reliant on something as unreliable as confidence should terrify governments everywhere.
Ben, York,
This story seems to have litte to do with an incompetent Google (as many seem to have suggested) but rather an incompetent news media. We live in an age of upto the second news, but what ever happened to checking your sources. Can anyone in media (or politics for that matter) be trusted?
Jon Rees, Southampton, UK
Sadly it seems that human beings are a poor substitute for human beings. What sort of a wally can't tell that it is no longer 2002?
Doh.
Kidd Garrett, Bristol, UK
It is clear that Googlebot needs work. It is clear that there are now even more ways to separate fools from their money.
But a lot of people were actually damaged financially by this fiasco, People who lost money but did not make a direct decision to sell into a down mkt have a case.
tramky, Novato CA, UA
Google should pay up all losses and damages!!!
So where is it written that anyone can post a bogus story that trashes someone or a company and just walk away from the damage?
Freedom of the Press comes with responsibility, there is NO FREE RIDE!
Mick, San Antonio Tx, USA
Makes you wonder about the intellect of the brokers (gamblers) who react to this info. Headless chickens???
B Brodie, UK,
Two words: Due Diligence.
Whether one is dealing with one's own investments, or is a financial professional, responsible for someone else's, it is incumbent upon them to perform proper investigation of the facts. Reacting to a single-source report without verifying is their fault, not Google's.
Bob, Reno, USA
It's more than possible this is a deliberate act with plausible deniability. If you had the inside scoop on this "bug" you could reap in extremely large amounts of cash when the stock was low, then just sell it when it rebounded. Or, nefariously, Google could cause similar "accidents" at will.
Fred, Pittsburgh, PA, USA
Seems to me to be the fault of the people, who were reposting the news along the way. They should have been fact checking it, rather than assuming anything.
Hans, Southgate,
Another law suit ? It's up there with the judge who sued a Chinese family for losing his trousers in a dry cleaners. Do you know he is trying again to sue for even more millions ? This country needs an enema.
Colin Suter, Washington DC, USA
Quote - I smell a lawsuit and some big payouts and a class action coming.
FZ, Spring, USA.
FZ, could you perhaps point out one event in the entire history of mankind, where someone from the USA did NOT ' smell a lawsuit and some big payouts and a class action coming.'?
Frank, Tunbridge Wells, Kent, GB
Nothing to do with Google. All news articles are the responsibility of the publishing news site.
Google only trawls up to date pages on news sites & can filter outdated infomation by article date.
Google is only a collection & pointing agency. Write what you understand.
Richard, Bucharest,
In recent months, I have been seeing quite a lot of really outdated articles on the Google News site, some from years prior. I think I remember seeing one from the late 90s. This is certainly not the first time this has happened recently, although it might be the first time that it affected a stock.
Marc Barrett, Council Bluffs, Iowa, U.S.A.
i know this may smack of common sense, but surely those people who sold their stock actually read the story, and saw the date of the story before they panicked rather than just reading a headline?
will, grimsby, uk
To FZ - You're right - Google will likely lose the suit, the New York lawyers will clean up big time, and each United shareholder will receive a $25 voucher good toward any future Google advertising.
Kevin McDevitt, Boston, USA
I smell a lawsuit and some big payouts and a class action coming.
FZ, Spring, USA
It's happened to me. I received a Google News Alert, on a story that I've been tracking, last Monday, 8th September. On looking at the story, it had been filed on the Edinburgh Evening News website on January 13th 2003. Five and a bit years out of date. And it had no relationship to United.
John, Shipley, W Yorkshire
This has nothing to do with dates being wrong. It's all about google's incompetency. I have alerts set on new news from google. Most of the time the news is years (YEARS!) old. I open the article and the date is clear. It's 2001, or 2002. Google is arrogant.
Steve, Portland, USA
The lack of clear dates on Internet pages is a serious defect of the Internet across the board where recency is very important. There aught to be a law -or something like it -to require a date on every article, page title and page to be searchable. Google and other search engines can require it.
Lee Stewart, New York, USA
The lack of clear dates on Internet pages is a serious defect of Internet information across the board where recency is very important. There aught to be a law -or something like it - to require a date on every article, page title, and page to be searchable. Search engines can require it in titles?
Lee Stewart, New York, USA
surely this is an issue about how stupid the readers are!!!! why on earth are we blaming google or the sun sentinel??
stephen, china, china
Who needs skynet to bring the world to its knees when you have google. This should be a big wake up call, but I doubt it.
Mike, Liverpool, UK
i'm with the previous fellow - this is a knee-slapper; But if I were UAL I'd sue those kids at Google until their acne clears up. Algorithms are like pit bulls, teach them how to behave or don't taken them out of the house.
Jeffrey, Ogdensburg, NY,
United Frequent Flyers program should be more than sufficient to lead to such a major drop in it's share value...
Farrukh, Woking,
If you think about it ........It is kind of scary! Google can cause a whole lot of trouble if they intend to do it.
Ace, jax, fl, USA
Google - Do no evil.
Right.
J., Phoenix,
Here is a good example of the more control you give to the unthinking/ reasoning machine the more you leave yourself open to problems. Folks you have to start thinking.. ;-)
Lippencotte, Beloit, USA
In an election where the opposition has admitted an ignorance of both technology and economics, this makes me hope McCain wins.
Just to break it beyond repair.
leon, Seattle, US
That is the funniest thing I've read all day.
Joenz, Columbus, Ohio, USA