GE Embraces Blogs, Some See Disclosure Worry

BOSTON (Reuters) – General Electric Co has quietly changed the way it communicates with Wall Street over the past month, using a company blog, GEReports.com, to share news with investors.

In some cases the company has used the blog in lieu of more traditional tools like press releases and investor briefings.

Not all corporate governance experts applaud the change, though given the conglomerate’s standing as a leader in corporate America, they expect other companies to follow suit.

Recently companies such as Boeing Co and Wal-Mart Stores Inc have experimented with blogs — short, sometimes breezy Internet postings — as a way to talk directly to customers, investors and employees.

GE, which has lost about 62 percent of its value in the last year, has twice over the past week used its blog to release potentially market-moving news.

“In some ways, it’s what you want to see in governance in that they’re talking more directly with their stakeholders,” Timothy Pollock, professor of business at Penn State University said. “On the other hand, you wonder about the validity of the information to some extent too. What’s the agenda behind it?”

Given the current turmoil in financial markets, GE described the blog it launched on October 22 as a way to quickly respond to situations it might have previously ignored.

“This is a tough environment, a lot of misinformation in the marketplace,” GE spokesman Gary Sheffer said. “This is just a fast and simple way to punch through it and to make sure that you tell your story in a simple and engaging way.”

GE intends for the blog to be a way of providing investors with additional information, not to replace other modes of disclosure, Sheffer said.

The Securities and Exchange Commission this summer ruled that U.S. companies may use their Web sites to distribute market-sensitive information.