HOWZAT

A Florida investment firm found the story on Monday morning with a Google search and posted a summary on the Bloomberg financial information service.

That visibility - Bloomberg is seen by thousands of investment managers and traders - sparked the run on United shares.

What is in dispute between Tribune, the owners of the Sun Sentinel, and Google is whether the Googlebot should have known it was an old story.

Tribune said the story was not republished, and the link was simply a link to the archive version of the story.

Google spokesman Gabriel Stricker said that the only date the automated Google News software found on the Sun Sentinel site was from early Sunday eastern time.

“In the same way that the reader was unable to determine the original date, our search algorithm was similarly misled by that date," Mr Stricker said.

Tribune spokesman Gary Weitman said other clues would have made it clear to a human reader that the story was old, including a reference to UAL’s 97-cent share price (it was trading around $12 on Monday) and comments from readers further down the page that were posted in 2002.

"It appears that no one who passed this story along actually bothered to read the story itself,” he said.

“Despite the company’s earlier request and the confusion caused by Googlebot and Google News earlier this week, we believe that Googlebot continues to misclassify stories," Tribune said.

The investment newsletter that posted a summary of the story to Bloomberg, Income Securities Advisors Inc. in Florida, has also said there was nothing on the Sun Sentinel website to indicate that the story was old.

The page also fooled Bloomberg. Bloomberg News staffers posted headlines noting first the UAL share price drop, and then, at 11:06 a.m. EDT, a bankruptcy denial from United.

A different Bloomberg News staffer working the story found the bankruptcy story on the Sun Sentinel site and, at 11:07a.m., posted a headline about the bankruptcy.

Investors then dumped the stock at a huge rate and here algorithms again played their part.

Experts said the automated trading programs were applied to the trading of shares based on market-moving information trawled from the internet.

Last year, algorithms handled some 30 percent of all equity trading volume, according to a recent study by Aite Group.

The study projected that algorithms would grow to handle half of equity trading by 2010, and noted similar growth in derivatives and other asset classes as a hunger for faster trading grows.

The lack of confidence investors have in the troubled US airline industry also undoubtedly played its part in the stock drop.

Investors mistakenly figured that United Airlines, having filed for bankruptcy once, was more likely to do it again.

United is still considering what, if anything, to do about the affair.

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