General Electric conforms to blogging society

By: Allison McNeal

Blogging is a cultural phenomenon, and many companies want to get on board with this new technology.

General Electric Company recently started changing the way it communicates with the Wall Street Journal by using a company blog called GEReports.com.

This blog allows the company to share information with investors, send out press releases, and investor briefings.

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

"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."

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

Companies like Wal-Mart and Boeing Company have started to implement blogs as a way of communicating with customers, investors, and employees.

GE tested out this new communication tactic by using the blog to tell investors of its planned $2 billion in cost-cutting measures next year at GE Capital.

The company did not decide to issue a press release because it wanted to release the information directly to the Web site, where it would be faster access for consumers.

Even though blogs are an efficient way to convey information, there are some technical handicaps.

Some investors are concerned with disclosing information on market-sensitive news because some investors may be at stake.

GE's shift allows investors and journalists to seek out news rather than having it delivered to them.

Disclosing developments on the Web makes the information available to all readers at the same time, while professional channels serve their paying customers called professional traders.

Howard Anderson, professor of entrepreneurship at the Massachusetts Institute of Technology's Sloan School of Management, said that blogging will help out GE's company image.

Anderson expects more companies to follow GE's lead in reaching out directly to markets.

"People follow GE whatever they do," Anderson said. "Even if they're dead wrong, they follow GE."