United’s share slide: A comedy of errors

On Monday, shares of United Airlines lost more than 75 per cent of their value — erasing about $1.2-billion from the company’s market capitalization — after a story about the airline’s bankruptcy in 2002 somehow got pushed onto the website of a Florida newspaper, was picked up by Google’s news-aggregation service, then made its way onto the Bloomberg news wire and out to hundreds of thousands of stockbrokers and traders. But whose fault was it? By Tuesday morning, fingers were being pointed in multiple directions.

At first, it appeared that the Florida Sun-Sentinel newspaper was responsible for the gaffe, but officials with the Chicago Tribune — which also publishes the Florida paper — said that no one in the organization had posted the old story, which came from the Tribune archives. Then, blame shifted to Bloomberg, which had picked up a headline from an investment news service called Income Securities Advisor.

But the real culprit seemed to be Google: The giant search engine had somehow plucked the six-year-old story about UAL’s bankruptcy out of the Tribune archives, and added it to the list of news stories it aggregated in its Google News service, which is where the investment news service found it on Monday morning. A headline about the bankruptcy was then picked up by Bloomberg as part of its syndication deal with the service, which follows debt-market news.

In reality, almost all of the players in the this little drama were to blame. As Google explained in a blog post, it only picked up the archived story because it showed up as one of the most-read stories on the Florida Sun-Sentinel website. In addition, the search engine said that when its automated news scanners checked the story, the only available date information seemed to show that it was relatively current.

From the Google News index, it was in turn picked up by the investment wire service (which clearly didn’t read through the entire story) and in turn moved to Bloomberg, which failed to check the source. By the time it was all over, billions of dollars of value had been erased and then miraculously restored (although some shareholders may not have survived the collapse), and everyone’s faith in the information they find in newspapers, news wires and in Google’s news index was perhaps a little shaken — and with good reason.

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