UAL Story Blame Is Placed on Computer

["Richard M. Smith" <rms () computerbytesman com>]

http://online.wsj.com/article/SB122100794359017593.html?mod=todays_us_market
place
 

UAL Story Blame Is Placed on Computer

Events Remain Murky, 
But Automated Search, 
Trades Played Roles
By SHIRA OVIDE and JESSICA E. VASCELLARO
September 10, 2008; Page B3


As Tribune <http://online.wsj.com/quotes/main.html?type=djn&symbol=trb>  Co.
and Google <http://online.wsj.com/quotes/main.html?type=djn&symbol=goog>
Inc. pointed fingers at each other over the glitch that cratered UAL
<http://online.wsj.com/quotes/main.html?type=djn&symbol=ual>  Corp.'s stock
Monday, blame spread to the computers that robotically troll the Web for
news stories and execute stock trades automatically.

An old article about UAL's 2002 bankruptcy-court filing resurfaced Monday as
an apparently fresh report on Google's news service. Stock in the parent
company of United Airlines quickly dropped to $3 a share from nearly $12.50
before the Nasdaq Stock Market halted trading and UAL issued a statement
denying any fresh Chapter 11 filing.

UAL's stock price ended Tuesday's session at $10.60, down 2.8% on the day
and nearly 13% off Monday's open.

Nasdaq and lawyers for Tribune and UAL are investigating the incident, and
the circumstances of the glitch remain murky.

Google traces the appearance of the 2002 article in its search engine to a
process that began late last Saturday night. At 10:36 p.m. PDT, Google's
"crawler" -- the technology that finds Web pages -- discovered a new link on
the Web site of Tribune's South Florida Sun-Sentinel newspaper in a section
called "Popular Stories: Business." The article -- which didn't carry a date
but was published by the Chicago Tribune in December 2002 -- hadn't appeared
there when Google's crawler last visited the page at 10:17 p.m., the company
said.

It remains unclear how the old story rocketed onto the list of most popular
stories. Tribune said online traffic began to tick up beginning earlier
Saturday evening. Some UAL investors suspected there were efforts to
manipulate Web traffic in order to sow fears about UAL's financial
condition.

There may be a more innocuous explanation, however: Amid serious storms in
Florida and on the East Coast, Web surfers checking for news about travel
delays may have stumbled onto the old UAL story by mistake, and a small
number of fresh hits may have been enough to drive it onto the list. A
Tribune spokesman declined to say how many hits the article received but
said there was no indication of fraud.

> From the Sun-Sentinel site, the article became available through Google News
service, accessible if a user searched for keywords like "United Airlines."
The article didn't appear in any of the headlines on Google News's home
page, but it was picked up and sent via email to people who had created a
custom Google News alert about UAL or related topics.

The stock market opened Monday with no drop in UAL shares, but the UAL story
began circulating widely via a posting by research firm Income Securities
Advisors Inc. that was made available to users of Bloomberg L.P., the
financial-news service widely watched on Wall Street. Shortly after a
headline from the outdated report flashed across Bloomberg screens at about
10:45 a.m., UAL shares began a precipitous drop. Over the next 15 minutes,
before Nasdaq halted trading, they dropped as low as $3.

...

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