Regarding yesterday's Apple news
By Ryan Block 
posted May 17th 2007 7:21PM
posted May 17th 2007 7:21PM
Yesterday Engadget posted an incorrect story about an iPhone delay, and I wanted to go into greater detail about how this happened.
At 9:09am CDT yesterday a number of Apple employees received an email that appeared to be from Apple corporate reporting that the iPhone and the next version of OS X had been delayed. An Apple employee who we trust then forwarded this email to us. Let's be clear that this is someone who we know without any doubt is an employee of Apple, not someone we merely believe to be an employee of Apple. We contacted our source after receiving their email, and they confirmed for us that they had indeed received this email, an email which by all appearances was a legitimate email from Apple corporate. In fact, this Apple employee certainly believed this, especially since the email had also been received by other Apple employees. They gave us absolutely no indication that its origin might be in doubt.
For a reporter, this kind of thing -- an internal memo to a company's employees -- is solid gold. You don't often get inside information more sound than a memo stating plans -- and it is not uncommon to see these sorts of internal emails quoted in mainstream newspapers and magazines -- but we are still aware of precisely how dangerous it would be to leave any story at that. So after verifying that the email was indeed sent to internal Apple email lists -- but before publishing anything -- we immediately contacted Apple PR, trying to reach our contacts on their PR team that handles iPod / iPhone matters. It was before business hours on the West coast, though, so we even called an Apple PR manager via their private cellphone in search of a statement. When no one was immediately available, we left voicemail and email.
The question we faced at that moment was: Do we run with the story without Apple's comment or not? The answer seemed fairly clear there, too, at the time. We possessed what confirmed Apple employees believed was an internal Apple memo that with absolutely no doubt had also been received by any number of other Apple employees. This memo was passed to us in good faith -- our source believed that what they were sending was real because it was exactly like every other email of this type they had received from Apple corporate. And it stood to reason that Apple, which normally holds its cards very close to the chest with this kind of news, would more than likely not comment on these matters. (How many times have you read a news story with "Apple was not available for / declined to comment"?) Even when Leopard was facing multiple accusations of delay from across the media, Apple denied it up and down for weeks right up until the very day it announced the delay.
So we were sitting on news of obvious importance -- the email was circulating, and it was enough to set off the alarms of other sources at Apple who also started forwarding it outbound. (As it happened, we were not the only site that acquired and published that memo, perhaps just the first.) Given the nature of that news, we felt we had an obligation to inform people that Apple had sent out an internal memo in preparation of a delay in the iPhone and Leopard. And so I ran the story; I believe most people in my place would have done the same.
About an hour and 40 minutes after the initial memo went out, a second memo was sent to the same internal Apple lists, dismissing the first. Soon after, our source -- who we'd been in contact with through the morning -- let us know that Apple was dismissing this earlier email; the second memo passed off the first as "fake" and "not from Apple". Fake indeed, but it still came from someone familiar with Apple's internal mail systems, lists, memo composition structure, etc., who found a way to plant a phony memo in the inboxes of who knows how many Apple employees. (Both emails are published in the original post.) Why Apple took nearly two hours to respond to the situation we do not know.
The person or persons behind the phony email had apparently put one over on Apple employees to the extent that those employees who received that memo and passed it along to us and others took it as truth -- as did we. Although we made sure to confirm and reconfirm with our source that this email was legit at the time it was sent out, unfortunately no amount of vetting and confirming sources can account for what happens when a corporate memo turns out to be fraudulently produced and distributed in this way.
So who sent the memo, and why? We don't know, and we're not sure we ever will. Again, it was not a public memo, and it was not distributed outside Apple's internal Bullet News list to employees. Ultimately we did the only thing we felt right in doing after the initial post: leave it up unedited (but struck through), making sure the developing situation was made as lucid as possible for anyone involved in order to minimize the damages the leaked email caused.
Credibility and trust is the currency of our realm, and it's clear we lost some of that. (And to be 100% clear, no one at Engadget is allowed to own stock in any of the companies we write about.) We take what we do very seriously and would never knowingly pass along information that we believed could be false or inaccurate; in this case, as stated above, we had confirmation from within Apple that this was in fact information that been distributed via Apple's internal corporate email system. If we had had any inkling that ANYONE could have exploited that system that would have greatly affected how we proceeded.
Could things have be done differently? Definitely. We might have waited until the press release the memo mentioned hit the wires. That could have been any time, though, an hour, three hours; we were obviously sitting on a pretty major story, and we believed that would have been a disservice to our readers. We might also have presented it as rumor or whim, although given the information we had at the time, there was truly no reason to believe it was anything but totally legit, and would have been a misrepresentation of the situation.
We also might have waited to hear what Apple had to say, however long it would take for them to get back to us. While we did indeed do our best to get in touch, but we were unable to immediately produce a result, so I chose to run the without comment, as is standard practice for a reporter working on a big, urgent story. (As it happened, we only heard back from Apple after we got the second internal memo.) Of course, had I waited long enough, that second memo would have made its way to me through the pipeline, and the story would have died on the vine, never to be published. (Well, maybe we would have done a story about a planted internal memo at Apple.)
We have learned a very serious lesson yesterday. We will work very hard to earn back the trust we have lost and to do our best to be what we have always strived to be: a trustworthy source for the latest on gadgets, consumer electronics, and personal technology.
At 9:09am CDT yesterday a number of Apple employees received an email that appeared to be from Apple corporate reporting that the iPhone and the next version of OS X had been delayed. An Apple employee who we trust then forwarded this email to us. Let's be clear that this is someone who we know without any doubt is an employee of Apple, not someone we merely believe to be an employee of Apple. We contacted our source after receiving their email, and they confirmed for us that they had indeed received this email, an email which by all appearances was a legitimate email from Apple corporate. In fact, this Apple employee certainly believed this, especially since the email had also been received by other Apple employees. They gave us absolutely no indication that its origin might be in doubt.
For a reporter, this kind of thing -- an internal memo to a company's employees -- is solid gold. You don't often get inside information more sound than a memo stating plans -- and it is not uncommon to see these sorts of internal emails quoted in mainstream newspapers and magazines -- but we are still aware of precisely how dangerous it would be to leave any story at that. So after verifying that the email was indeed sent to internal Apple email lists -- but before publishing anything -- we immediately contacted Apple PR, trying to reach our contacts on their PR team that handles iPod / iPhone matters. It was before business hours on the West coast, though, so we even called an Apple PR manager via their private cellphone in search of a statement. When no one was immediately available, we left voicemail and email.
The question we faced at that moment was: Do we run with the story without Apple's comment or not? The answer seemed fairly clear there, too, at the time. We possessed what confirmed Apple employees believed was an internal Apple memo that with absolutely no doubt had also been received by any number of other Apple employees. This memo was passed to us in good faith -- our source believed that what they were sending was real because it was exactly like every other email of this type they had received from Apple corporate. And it stood to reason that Apple, which normally holds its cards very close to the chest with this kind of news, would more than likely not comment on these matters. (How many times have you read a news story with "Apple was not available for / declined to comment"?) Even when Leopard was facing multiple accusations of delay from across the media, Apple denied it up and down for weeks right up until the very day it announced the delay.
So we were sitting on news of obvious importance -- the email was circulating, and it was enough to set off the alarms of other sources at Apple who also started forwarding it outbound. (As it happened, we were not the only site that acquired and published that memo, perhaps just the first.) Given the nature of that news, we felt we had an obligation to inform people that Apple had sent out an internal memo in preparation of a delay in the iPhone and Leopard. And so I ran the story; I believe most people in my place would have done the same.
About an hour and 40 minutes after the initial memo went out, a second memo was sent to the same internal Apple lists, dismissing the first. Soon after, our source -- who we'd been in contact with through the morning -- let us know that Apple was dismissing this earlier email; the second memo passed off the first as "fake" and "not from Apple". Fake indeed, but it still came from someone familiar with Apple's internal mail systems, lists, memo composition structure, etc., who found a way to plant a phony memo in the inboxes of who knows how many Apple employees. (Both emails are published in the original post.) Why Apple took nearly two hours to respond to the situation we do not know.
The person or persons behind the phony email had apparently put one over on Apple employees to the extent that those employees who received that memo and passed it along to us and others took it as truth -- as did we. Although we made sure to confirm and reconfirm with our source that this email was legit at the time it was sent out, unfortunately no amount of vetting and confirming sources can account for what happens when a corporate memo turns out to be fraudulently produced and distributed in this way.
So who sent the memo, and why? We don't know, and we're not sure we ever will. Again, it was not a public memo, and it was not distributed outside Apple's internal Bullet News list to employees. Ultimately we did the only thing we felt right in doing after the initial post: leave it up unedited (but struck through), making sure the developing situation was made as lucid as possible for anyone involved in order to minimize the damages the leaked email caused.
Credibility and trust is the currency of our realm, and it's clear we lost some of that. (And to be 100% clear, no one at Engadget is allowed to own stock in any of the companies we write about.) We take what we do very seriously and would never knowingly pass along information that we believed could be false or inaccurate; in this case, as stated above, we had confirmation from within Apple that this was in fact information that been distributed via Apple's internal corporate email system. If we had had any inkling that ANYONE could have exploited that system that would have greatly affected how we proceeded.
Could things have be done differently? Definitely. We might have waited until the press release the memo mentioned hit the wires. That could have been any time, though, an hour, three hours; we were obviously sitting on a pretty major story, and we believed that would have been a disservice to our readers. We might also have presented it as rumor or whim, although given the information we had at the time, there was truly no reason to believe it was anything but totally legit, and would have been a misrepresentation of the situation.
We also might have waited to hear what Apple had to say, however long it would take for them to get back to us. While we did indeed do our best to get in touch, but we were unable to immediately produce a result, so I chose to run the without comment, as is standard practice for a reporter working on a big, urgent story. (As it happened, we only heard back from Apple after we got the second internal memo.) Of course, had I waited long enough, that second memo would have made its way to me through the pipeline, and the story would have died on the vine, never to be published. (Well, maybe we would have done a story about a planted internal memo at Apple.)
We have learned a very serious lesson yesterday. We will work very hard to earn back the trust we have lost and to do our best to be what we have always strived to be: a trustworthy source for the latest on gadgets, consumer electronics, and personal technology.
what's that like, ja$on?
(not that there's anything wrong with it)
point was, engadget came across looking a lot more amateurish than they usually are. i love the site, and usually they are spot-on - but - when you publish something with only one single source and no backup - then you take your chances. ryan said as much himself.
the impact of this was millions of dollars. now what would be interesting would be to see who was shorting apple stock for yesterday. that much money moving around benefited someone, the only question is who. was it just a slicker version of the typical pump & dump email scam?
so yeah, i stick by "eager."
and watch those teeth.
Did you have any intelectual collateral to back up your brief cliche ridden tripe?
Or do you just read the blogs and chime in when you can quote your favorite testosterone loaded movie heros.
The integrity displayed in the above blog entry alone is probably confusing you let alone any journalistic credibility.
That someone like you, who's breadth of phrasing would barely rival the hotest wrestler/action hero of our time, would question someones journalistic integrity is, in itself, comical.
You misspelled your name. I believe that should be a "t" not and "l". Your a putz
It's ok, Engadget. We love you either way.
Thanks, we love you guys too. ;)
Yes, yes, that's right ... it's perfectly ok. Yes everything is just fine. Go ahead and be a tool, or puppet if you prefer ( I know Bush does ), for someone’s malicious intent. Don't bother to investigate for yourselves, it's that you caved in to your fear that someone might publish this before you did that counts - right? In the fast paced world of 'speculative reporting' it's just the same as someone yelling Fire! in a theater - There's no time to think and investigate because that moment of doubt could cost you your lives! Thank god you have that to free your consciences - ...oh wait.. that's right you don't have any scruples or consciences - you accept information from those who lie and betray those they work for and who don't value the promise they made when signing confidentiality agreement they made of their own free will. And don't worry about all those thousands of Americans day trading with their retirement funds - it's not your problem anyways - you just 'calls em how we see em' - were just a 'fancy blog' - filling the void of a decimated factual reporting industry - yes... yes... let's all be just like the fake news on television and let unnamed sources and innuendo rule so that eventually, say in about 2 years, all information in this county will be only that which those in control want us to hear. Good work guys! And while your penning your oh so witty and snappy reply do let us know exactly who at Engadget will be resigning over this won't you? yeah that's what i thought.
Hello Ryan,
I just wanted to give you a super colossal amout of support. All of you @ Engadegt are doing a fantasict job.
Keep up the good stuff... We Love you guys.......
Oliver
You rushed to publish without verifying any facts and you played right into the perpetrator’s plans. Your Apple insider did not have any cooperating info other than passing along a faked message. You then blame Apple's PR staff for not answering their phones before their offices were open. Then again for taking a whole two hours to respond. Considering it would take a while for more staff to begin their day, and they would, being responsible employees, start verifying the authenticity of this memo before sending out a retraction and they would know that this was leaked to Engadget? Come on. The responsibility is yours to verify the info. It was easy since it referred to an already published press release. There was no release to be found on their site and the slow response to your inquiry, clearly indicated that they were unprepared to field the many incoming calls, which they would have been if this was real.
Common sense should have kicked in, but you left that at home that is if you ever had it.
A trip to Engadget is clearly a waste of key strokes
Cheers!
I love engadget. **** the haters, you can go away to gizmodo if you want.
If you go to Gizmodo don't forget - you won't be able to post anything on their site letting the world know about your switch until they "verify that you're cool enough".
Hey- everybody makes mistakes. It's admitting to them that separates the reliable sources from those who aren't.
Gizmodo was quick to pick up on this and had a thread title blaming engadget, but were careful to mention that themselves could have also been victim to this.
__________________
Stupid gizmodo never let me comment. Engadget rocks, gizmodo sucks.
Your posting yesterday did seem a bit ... "eager."
A couple billion dollars of AAPL vanished because of that post, so my question is: what will you do if Apple or the SEC comes a knockin' at your door about the particulars of that tip?
You live in a fantasy world.
"A couple billion dollars of AAPL vanished" NOT, in seven days the price of AAPL will be exactly what they would have been without this story. If course every tech site bounced the iPhone to the top of the list again. What is the value to AAPL to get all those headlines??
The only people that lost are the fools that tried to jump ship at the first sign of trouble and dumped their stock. What a shame.
I would have done the same had I been in your situation, I think you guys handled it great and it did not hurt my trust in you in any way. Like the 1st commenter said, we love you guys either way.
"this... little.. glitch ... will cost us millions in interest alone!" - robocop.
Seriously, I can always forgive the media. Hahaha blogs are part of the media now. I think that was the most a blog ever moved a large cap stock. Go go inspector engadget.
Be careful, it seemed like trying to smoke out a mole to me... the press has freedom, and the courts just backed this up again, but Apple can then terminate the leakers.
I wouldn't be surprised to learn that this was in fact an internal memo, sent out with the intention of determining which departments were having difficulties keeping necessary silence, of the particular project unit that your friend was working in was known or suspected to be having OP SEC problems, based on the nature of prior unauthorized discolsure. Corporate sends out this memo to the project section employing jimmy jaberjaw, just to see what happens. we all find out -- suspicions confirmed, Jimmy J. is discovered to problematically not-quiet, and is quietly let go...
Just throwing an idear out there
a
Yeah, it's worth having your stock take a nose dive for that.
Don't worry about it. I would have done exactly the same thing if I were in your shoes. I mean, how could you not? I love Engadget... I mean... like, alot. Maybe I can take Engadget out sometime... drinks... a movie... you know...
You guys rock.
engadget, its totally fine, you corrected yourself in a matter of hours, its ok, really
Not to split hairs, but it was actually a matter of minutes!
You know what? Something is telling me that eventually, both leopard and the iPhone WILL be delayed. I don't find any fault with engadget for what you guys did. It was totally understandable. But I just have a sick/funny feeling in my stomach that we actually will get an announcement from Apple saying the iPhone is being delayed.....yet it passed FCC today, so who knows.
I doubt Leopard will be delayed. What Apple would do is simply pull features from it and we'll never know that it happened (since they've yet to announce many of the features).
And Engadget, don't sweat it. Mistakes like this happen all the time. Possibly not on such a large scale, but, you know...
:)
Everyone screws up sooner or later. Engadget had no way of knowing the e-mail was fake.
That article won't affect how much I still like Engadget.
The key problem is that you are using information you shouldn't have. That Apple employee you "trust" signed a confidentiality agreement in order to work at Apple. They violated that agreement by forwarding an internal corporate communication to you. So, a reasonable person has to ask: how can they be trusted? If they're going to violate one agreement, they'll violate another.
It doesn't matter whether you know this person is an Apple employee or not...without independent verification, you shouldn't post the story. Verifying the person is an employee and verifying that the email was sent on the Apple network does not verify the content of the email and does not verify that Apple sent it. It is a fundamental difference.
Without that independent verification, all you have is rumor. Spreading rumors != journalism.
Faking internal emails is one of the easiest things to do, ever. Just telnet into port 25 of your internal mail server and EHLO to your heart's content! I've only ever seen a very very very few companies ever who have locked this down. It's still rather trace-able which is why you don't see many people pulling this stunt. My guess is that someone in IT was "on their way out" and decided to have a little fun and send this little parting gift.
Try that at Apple. It won't work.
For the record, I believe Engadget. But don't think this post is going to shoo away the SEC. $4bn worth of market cap movement in less than a day will certainly bring an investigation, even if (as I hope) it only proves Engadet's innocence.
A CLEVER RUSE TO WEED OUT THE MOLES! Watch it... they probably hit only half of the company which means they are well on their way to finding you people out.
My money is on slightly different e-mails out to segments of the company. A word changed here. A phrase changed there. You could really get down to granular detail with such a setup. the question is this: Is Apple so anal that they would allow their stock to drop that much all to inflate Jobs's ego? Because lets be fair here. Most of the rumors comes hours, days, or at most weeks before the announcement. This isn't about keeping a secret its about Jobs being in the limelight once again. that guy is an arrogant pompous asshole who needs to be pied in the face like Gates. I'd pay good money to see that at WWDC this year.
What's the big deal anyway? Is there really a need to defend yourself for posting this? It is something completely not in your hands.
journalistic ETHICS requires that you follow through with a direct confirmation from the top. There is NEVER an excuse for running a story without 'upper-end' confirmation, denial or comment. This is just a case of "I wanna be first" that cost Apple's stockholders a huge pile of money. Engadget obviously is not the ONLY online and hard copy "news" source that is at fault here, but the blame is equal. Hopefully, these so-called online journalists will either learn a lesson from this, before lawsuits teach them the hard way.
I expect you helped Apple find one of their leakers!
"That could have been any time, though, an hour, three hours; we were obviously sitting on a pretty major story"
Were those one to three hours so important that they needed to information out there that fast? What would have changed in those one to three hours? Why the rush?
what would have changed? then other blogs would have reported it already, and all those assholes on engadget would say "this is old news. keep up with the times, engadget" However, i think engadget would have been better off saying "there has been a memo sent which says..." then they would have been in the clear
"(As it happened, we were not the only site that acquired and published that memo, perhaps just the first.)"
Just the first to publish it without checking facts. Maybe checking facts is what the other sites were doing. You were too excited to be sitting on an exclusive and couldn't wait. I guess that's understandable. Although the words apologize or sorry aren't anywhere in this post. Maybe some Apple stock investors aren't too happy with Engadget today. Or Apple themselves.
well i hope so engadget becuse i lost some money in there! but hey things hapen
"well i hope so engadget becuse i lost some money in there! but hey things hapen"
How did you lose money then? Sold stock after it went down considerably? Isn't that just about the dumbest thing to do in cases like this?
Get a grip Ryan, you made a big amateur mistake. No amount of apology is going to restore the damage you did to your own reputation.
We all now know that even rumours posted "with authority" can be false.
Might I just point out that Engadet is correct more than CNN, MSNBC, etc....
Sucks for the Apple employee, he's probably going to get fired. Apple sends out wrong info to it's own employees occationally to find leaks in the company. They'll be stopping up that hole pretty fast.
I for one welcome our email enabled robot overlords.
yeah, thats the first thing i thought when i read that.
they're trying to weed out the mole.
but it didn't work so well since you didn't post THE specific memo, and more than one was confirmed to you.
lol, apple, your about as leak free as a colander.
Just where is the love anymore?
/sarcasm
Wow, you guys are way more conciliatory than I would have expected. It's obvious that Engadget maintains pretty high standards of journalistic integrity and for a small goof like this, how can we hold it against you in any way.
Blogs in general, and especially Engadget, have totally changed the way we get and receive news. In terms of expertise, breadth of coverage, entertainment value and most of all, timeliness, you guys have totally changed the way we all get our gadget info. Just as an example of Engadget's relevance and importance, the site has been quoted and referenced often by the NY Times.
While I understand that you guys strive towards excellence, I think that we can accept the occasional misinformation and injection of personal feelings as you rush to publish something. In any case, I'd hardly expect an apology or ask for an explanation.
Please keep doing what you've always done!
Oops. I know people have been on your case about this. I am not. But you should stop saying that Apple's second memo "retracted" the first. That means they acknowledged that they wrote and sent the first but wished to take it back. You mean to say that they denounced the first as fraud. Entirely different.
The miswritten meaning will fuel fires of "misreporting" accusations, so be more careful, please.
Sorry about your hot water. On the bright side, stock is where it was and the iPhone isn't delayed.
If someone else already wrote about this, I am sorry for not reading all the comments before posting.
Excellent point! Updated.
I don't buy the whole 'it was an operating to find a leak' thing. Internal Security would have thought it through to the point of 'well if it does get leaked could this cause a change in our market valuation?'. You just don't go throw something out like that to find a mole that could potentially make you lose a lot of cash, its not smart. I'd buy a faked email sent to the internal newslist, and then offer to do a proposal to switch Apple to a more robust email system, like Exchange.
Yeah, the whole "mole hunt" theory is hilarious, like a company that was under investigation by the SEC for stock manipulation would risk something like this debacle to out a few leakers. I wonder if this was even someone trying to cash in on some shorting at all, but rather was just the unintended consequence of some nerd on the Internet pranking Apple. Sucks to be that bastard if they find him. Sucks to be the Apple employee(s) fucking stupid enough to send an internal e-mail to media outlets too, I imagine.
Either that or apple was testing their employees allegiance. I would hope your source got canned for the leak. However, i do praise your "investivicative" journaling. But I do hope your buddy is writing his "Yoogoogaly." Nothing worst than an employee you cant trust. Nothing better than a news source that will report anything without realizing the consequences.
Ok, if APPL released this memo themselves, the SEC should be investigating them, not the news organization that published said memo.
Organizations can and do sometimes send memos to check leaks, but you don't send an email with content as serious and potentially damaging for investors as this. Instead, you make subtle differences in the wording sent to many different groups, but all seeming to originate and be addressed to a a larger audience. You DON'T make up facts in such an email.
Now, if the email was only sent to a small group, APPL has narrowed any search for an internal leaker, but they should absolutely be under investigation if this was intentional. If it turns out this was done with the specific intent to find an internal leak, this seemingly amounts to fraud.
As they say, don't shoot the messenger. I've seen mainstream news organizations publish stories that are even more greivously wrong; "DEWEY DEFEATS TRUMAN," anyone? Engadget did the right thing in this case and retracted the story just as soon as they could. Perhaps Engadget should have done their fact checking first, but they didn't exactly bury the retraction on page 10. Then they display even more transparency to the mistake by posting another entry on how and why it happened in the first place. I wish othe news organizations were as forthright when they make mistakes and for months publish misinformation; look at Google Trends and tell me that these guys got a fair shake: http://www.google.com/trends?q=Duke+lacrosse+rape&ctab=0&sa=N. Blogs have the ability to diseminate information regardless if the topic is sensational enough to sell papers.
Personally, I think this was handled perfectly, and I wouldn't have it any other way. As a blogging news organization, we want our information breaking, and we want it as fast as the tubes will bring it to us. There is a chance some of these stories will be wrong, but they can be retracted just as quickly and easily -- this is in part why blogs are becomming mainstream themselves. Probably for many readers on Engadget, blogs are probably more relevent and certainly more timely than traditional media sources.
Very good for Engadget that posted the correction as fast as the original irresponsible posting. I believe the only reason to believe something is legit is when it comes from the official source(s).
Posting news based on 'a number of employees that receive emails that appear to be from' is not very wise.
You guys could have called Apple to hear what they had to say.
Anyway, good job guys; keep up the good work.
Honestly. Seriously. This isn't something that never happens. Everyone drops the ball. And when you're trying to break news--that risk is always there. Things change. I've been in the journalistic field at one point (still am on occaisions) and I know that this is rather common. Yeah they messed up but they printed a retraction. And really that's all you can do. I'm sure the future will bring further precautions (though it may still happen).
If people are that upset--feel free to vioce your opinion--but it's silly to keep harping on the matter. I'll be picking up my iPhone next month. Unless, of course, Apple does delay the damn thing.
Didn't you think it strange that Apple should send such an explosive email out to its staff before their PR people were available for comment, especially for two products that are critical to its future success? The first time I heard the story I thought it was a fake.
I don't see anything wrong with what you did Ryan - Any journalist would have done the exact same thing. It seems like you had your ducks in a row and tried to cover your ass by getting in touch with Apple. PR reps should never be unavailable, and I'd pin blame on that guy first. His HIS job to discredit information like this.
I'm curious. I can't seem to find a corporate structure for this site. Who exactly is the EIC of engadget.com?
SG
As much as I love Engadget and every aspect of it, it continues to be a news source, like any other it's uncited reports or reports based on information from sources need to be questioned consistently. Every media outlet uses sources to get the latest news and as readers that demand these announcement to come out immediately we have to wait and confirm the information before we accept it or make any decisions based on it.
Ryan, you did a tremendous job at fixing this story so quickly and have to say statements such as the one you're making above are far and beyond than those we see from other media outlets that commit similar mistakes (much more often than Engadget). I do have to recommend that in the future do not try to over-explain yourself, simply state the situation quickly, an apology and acceptance will come with time.
People, Ryan is only partially writing for our benefit. This has been Engadget's biggest appearance in the mainstream media by far, and is probably the largest one-time monetary effect of blog reporting ever. Quite a few serious reporters have been discussing and criticizing Ryan et. al., and the entire Weblogs reputation is on the line here. So though we know they did nothing wrong, even by non-blog journalistic standards, there are a lot of people out there who are at least as important to Weblogs Inc. as us who have been waiting to see what Engadget had to say for itself. I think Ryan does a good, appropriately thorough job responding to those concerns.
By the time I caught the story in my RSS reader (I usually read the Engadget stories right in the reader but I followed this one to the site) the retraction (of sorts) had been posted to the site. I don't see the harm except that if I hadn't followed the link to the site I would never have known that the story had been retracted.
engadget i think that you was completely right, and certainly you cannot be blamed for reporting the truth. the truth was that an internal apple memo had been sent= and you rightfully reported this. you cannot be blamed for apples lack of internal security procedures to prevent such an instance from occurring. i only hope this situation does not lead you to not report immediately on news which you receive in the future due to the fear of spreading an inaccurate rumor. i cherish and read your blog every day precisely because i know that you have the latest news and speculation and report only with the highest integrity. do not let one mistake that was out of your realm of control dictate future policy which could negatively affect your loving readers
I highly doubt Apple was responsible for the email as a method to flush out a mole. If they were they more likely would have posted something to the effect of a new product launch or something. Not a delay on two of its most anticipated products that could cause a major hit in their stocks.
Every major paper in the U.S. has a page where they list corrections because, guess what folks, people aren't perfect. Now engadget has used this source before and deemed them reliable as their other information has panned out in the past. They corrected the story once they realized the information was false. Welcome to life everyone. Some days it's good. Other days it sucks.
While I agree that it was probably in Ryan's best interest to go ahead and report the story without full confirmation of the facts, let us all remember that a well-known anchorman was canned for doing something similar to Bush not so long ago. Personally, I don't think Ryan should get the axe because I enjoy his articles and I'm sure he feels absolutely terrible about it, and like he said, a lot of other people in that situation would have reacted the same way. Unfortunately we will never know if another media outlet would have scooped the story had Ryan not done it first. It's kind of like how NBC got the pictures from the VA Tech killer. What do they do? Sit on the pictures and hope he didn't send out the same package to CBS, CNN, etc, or run the pictures? Of course you run the pictures. NBC execs can say it was about making the decision whether or not it was appropriate, but we all know that they were afraid of being scooped.
If anyone lost money, it was all day trading people, not people who know how to invest in a winning stock and will stick with it until the run ends. Anyone with 1/16th of a brain can see that Apple stock is not near the end of it's run. Apple stock would still go up in the long run had this rumor been proven true because the iPhone hasn't even been released yet. Apple stock is still rising, long term investors know that and didn't sell. People with stop loss orders are people who are gamblers, and if you're gambling with the stock market (or at a casino mind you) you should expect to lose, but hope to win. When you do lose, don't go whining to anyone about it, because investing in the stock market, whether long term or short term, is a gamble. If you want a very secure investment there are other options out there.
That was a great statement! Only wish others could man-up like you all have done.
If engadget were the type of blog that posted a one sentence apology of "sorry we fucked up," do you think it would be mentioned in the NYT? How can you bash a writer for going with an internal memo confirmed to have been received by multiple employees? That would be like the scene at the end of Vegas Vacation when Chevy Chase stares at the winning lottery ticket on the floor for like 30 seconds while a carpet sweeper almost destroys it.
And people whining that AAPL lost $4 billion of market cap yesterday need to calm down. The stock closed down .17 percent yesterday and is up 2 percent today; unless you bought AAPL on Tuesday and intended to sell it Wednesday you really need to shut the fuck up. And if you had a stop condition put on AAPL that if it fell more than 5 points to sell all your shares, 1) you are a horrible investor and 2) you are playing the short game and deserve to lose money. If you look at a 52-week graph of AAPL stock the slope is steeper than Lombard St. in San Francisco.
I applaud Ryan and any engadget staffers who agreed to run the story. keep up the excellent journalism
I totally agree with you Brad. This bullshit about a "huge impact on their stock value" is a load of crap. Doesn't anyone know anything about investing? It's a PAPER LOSS unless you bought and sold at exactly the wrong time. I'm sure that did happen to some day traders, but they are nothing but compulsive gamblers in my eyes and I have absolutely no sympathy for them.
Go to Yahoo Finance and pull up their trend for that day. It was a dramatic, but extremely short-lived, dip in value. If you held the stock through that, like I did, this news item had ABSOLUTELY NO IMPACT ON THE VALUE OF YOUR STOCK.
You sound believable. But the SEC might still have to investigate in case somebody profited knowingly. Should be a fun experience (like any experience). That sort of thing was bound to happen anyway. Blogging is growing up is all...
Engadget--
While I do enjoy reading the website and understand what you wrote, as someone who works in the financial market as an analyst, your posting had serious consequences for Apple and its shareholders (of which, I am one of them). Certainly, any news story could have a financial impact, whether positive or negative, on an entity; however, when a planted/untrue/uncomfirmed story receives press and has huge (in this case, four billion dollars) impact on an entity's valuation, there's no doubt that an inquiry should take place by the SEC.
I am disappointed in what happened and how yesterday's events unfolded. In our information overloaded-society, the proliferation of news can have biased impacts on companies, governments, and individuals. Particularly, when there is a substantial financial impact, the bias will seem greater.
Alas, i hope that an inquiry takes place. The media should feel free to publish what is wishes, but when the story is false and has a huge financial impact on a company, it's money that talks... Sorry, Engadget. I really feel bad for you all.
Be careful next time,
"Chris"
Yes, any Journalist would have jumped on the story, this is why editors are important to actually reign in some of the enthusiasm for chasing the ever enticing Scoop.
Hindsight is 20/20 -- a mistake is a mistake.
I think this should function more to put engadget on notice that it's a much more infuencial website than had been known, all you can do is work to do better next time.
I love Engadget, and it's also quite fun to read. If you want to talk about professionalism, this retraction here is the best example of that.
Keep up the excellent stories. Seriously, I wouldn't know how the crap that's out there so easily without Engadget - whether it's the newest Notebooks to feature the new Intel chipset, or whether it's plants, powered by LED lights, that can purify air in your home (that sounds funny, doesn't it?)
Do you even know the definition of a retraction?
http://www.m-w.com/cgi-bin/dictionary?sourceid=Mozilla-search&va=retraction
What was posted today was nothing of the sort. I don't blame E-Gadget for wanting to be first. It makes headlines. That is all this is about. The very notion that "its all for the readers" is bullshit. What its about is getting your name spread far and wide via crediting the original source. Nothing like having ZDNET, CNET, every Mac site on the net have a nice big PHAT link to engadget on their page to draw in hits. Come on guys. I love Engadget but don't piss on my head and call it rain.
"It's obvious that Engadget maintains pretty high standards of journalistic integrity and for a small goof like this, how can we hold it against you in any way."
It wasn't a "small goof". Apple's stock actually dropped on the news, which was picked up by various national news orgs. When you're talking a large company like Apple, even a 2% stock drop can mean millions of dollars lost for investors... but as always, it's usually the small investors that get hurt the most.
I think this highlights one of the big dangers in relying on blogs for info, though. I don't know if I really fault Engadget for this or not. On the one hand, it *is* a blog - nobody ever said this was CNN we're reading here. By nature, the site deals with rumors and subjective opinions, and the whole idea is to post things quickly.
On the other hand, this isn't just *any* blog - it's part of Weblogs, Inc., which is owned by AOL Time Warner. It's fully ad supported. It is a commercial site, not just some guy posting stuff from his basement. Given that, I think they have a little more responsibility in making sure they get their facts straight than the average blog would.
I also think that, just generally speaking, if bloggers want to go around calling themselves "journalists", then they need to act like journalists. There are accepted and standard journalistic best practices that were not followed here (the whole 2 sources thing, to name one). You can't have it both ways. You can't call yourself a journalist and then act like some guy posting whatever rumor he comes across because he thinks if it's on the internet, it must be true. That's the difference between bloggers and journalists; you can be one or the other, not both. So yes, Engadget needs to realize the responsibility that comes with being a "journalist" on a large commercial editorial site.
As I've written this, I guess I've come to realize that I do fault Engadget for this. They need to take their jobs a little more seriously, and realize the effect that their stories can have on the companies they're covering (whether they asked for that or not). I don't think it's too much to ask for Engadget to ensure the accuracy of their stories.
damned if you do, damned if you don't, but damned if this won't make me read engadget all the more often. The legitimacy of your blog as true media is shown by the seriousness with which the market takes you. Of course it's a hot topic and a hot story and people get hot under the collar, but if you hold the good stuff then who's going to read.
nice work gents.
In the mean time, Apple has narrowed down who the leak is. This person probably won't be an Engadget source for long.
damned if you do, damned if you don't, but damned if this won't make me read engadget all the more often. The legitimacy of your blog as true media is shown by the seriousness with which the market takes you. Of course it's a hot topic and a hot story and people get hot under the collar, but if you hold the good stuff then who's going to read.
nice work gents.
While I am not thrilled that Engadget get in hot water over this, I am glad to see that we now have irrefutable proof that blogs are just as relevant as the traditional media outlets. Blogs and crowdsourcing (see: www.assignmentzero.net) have definitely changed the landscape, and I feel for the better.
I love you Engadget, and would have done the same thing in Ryan's shoes.
" and we believed that would have been a disservice to our readers." Really? Try "a disservice to our advertisers." I think that fits better, don't you?
Nope. We have a strict separation in advertising and editorial here. Furthermore, our pay structure is not traffic-based. In other words, our editors -- myself included -- don't stand to make any more or less money based on our traffic patterns.
Where is your remorse? WHERE is your apology to AAPL shareholders who took a financial hit on stop-losses because of YOUR failure to check facts.
I've seen a lot of ass-covering and excuses from you, but not one hint of an apology.
Shame on you.
Seriously, you've got a 5 point stop loss? What sort of idiot investor are you? You're obviously playing the RISKY short game, not a serious investor, and deserve to lose your money, GAMBLING on day flux like that.
Moron.
If I wanted to get my news based on press realises I would get the paper.
All Engadget did was tell us about something they received, I still find it interesting thought it turned out not to be true - so was worth posting.
I think all this shows is how little faith people have in Apple. Microsoft announces delays all the time and they don't get dropped like a hot rock. I would be careful about buying apple share as this shows that they are volatile and likely to be over valued.
maybe.
consider if the leaker had been doing these things for a while, the stock is going to recover eventually, the op sec of Apple, once compromised is gone for ever. Price per trade will recover, esp. if iphone is released on time, etc. secrets never return.
A
First off the stock market is a joke. While obviously a necessary evil. People need to realize they are putting money into something whose value could change drastically over an analyst prediction of what might happen. But thats another topic, one that I admitedly am not qualified to participate in.
Its the readers that put the pressure on you. How many times have you posted a new story only to see numerous responses like 'This has been on [insert site here] forever' or something to that effect. So we put the demands that the news (and journalism in general) must provide us with the latest rumor, gossip, and the occasional truth. And we criticize when your not the first one with the story. And apparently we criticize when that story turns out to be false. We should not expect it both ways.
The arguement that "your bigger and more read, and that means you have to take responsibility for your stories" is only valid if you resign your own free will to the media anyway. Just because more people read your site doesnt mean you should change your stories or how you post them.
Just my 2 cents.
Thanks for the clarification on my misuse of the word. The definition from the dictionary defined retract as "to recant or disavow something", which is what I thought this new article did, maybe even if it was implicit: a retraction of the first story incorrectly reported. I guess I should have called it "correction" or even "clarification". I don't think that matters, and that wasn't the point of my post. Obviously it's not what you had issue with, either, because what bothers you was Engadget's error in the first place. So, it's ok, and don't be so bitter!
It's interesting how your "sister" site (bloggingstocks) attempts to point out how unbelievable the e-mail was. In other words it is obvious that Apple would not have handled such a sensitive issue via an open e-mail to its employees (http://aapl.bloggingstocks.com/2007/05/17/the-iphone-rumor-had-many-red-flags/). The underlying message in their editorial is that ANY investor with an ounce of common sense should have known the info was false (basically putting the blame on the investment community). Maybe this is true, but if it is true for the investor, then it should be just as true for you. Yet, your site attempts to explain how legitimate it seemed. Sounds like a bunch of CYA after the fact.
It's Apples fault, they shouldn't have monkeys in the building monkeying around with their *internal mail system*. It's not like the memo came from the easter bunny.
I don't understand how you could lose so much trust over this. The way I see it, anything and everything in the tech industry should be taken with a grain of salt -- even stuff from Apple (or the company in question) themselves. It wasn't Engadget's fault at all...just a fluke.
If people hold this against you, they've got issues.
You are treating this as if it's an "oopsie" issue and a CYA explanation is worthy of exoneration. We're talking about a major blunder that cost a company $4 billion in market cap value, and more million$ to retail investors. You don't squirm out of something like this with a few paragraphs of, "Um, it's not my fault."
I love Apple, but the fact of the matter is it's NOT Engadget's fault. Apple will come right out of this as soon as the fuss dies down. There's not going to be long term consequences. 4 billion is a lot of money, but if you can lose it that quick, you can get it all back just as quick.
Yes, it's a terrible thing, but it IS NOT ENGADGET'S FAULT in any way, shape, or form! Engadget made the best decision they could.
The culprit here is whoever sent the email! THEY are the ones to be mad at!
Now I understand why Engadget takes the blame, because people need to blame SOMEONE, and we don't know who did it, so let's blame the press!
Engadget is one of the few big sites that still cares about its users and telling TRUE, ACCURATE, MEANINGFUL information. For most press companies, it is ALL about the money. That's not so with Engadget...they show time and time again they actually care about their user base.
Engadget is not to blame here, the bastard(s) who got into Apple's system is/are to blame.
It was worth it just to see Gizmodo get all high and mighty about how they never make mistakes. Also to see them freak out about their beloved Apple losing money was pretty entertaining as well.
"That could have been any time, though, an hour, three hours; we were obviously sitting on a pretty major story, and we believed that would have been a disservice to our readers"
I'm sorry, I just don't see how waiting for a couple hours for verification would be a disservice to us, the readers. Getting verification and accurate information IS the valuable service you provide us, not being first, being the best and most trustworthy.
Seriously, I do not think that what you did was in anyway less than professional. Major news outlets run retractions everyday, and usually take at least 24 hours to do so. Your correction came quickly, and was not buried on page 24. Y'all are straight.
Hmm.... it may take time to repair our relationship, but I'm glad you learned your lesson.... thank god I didn't sell.
I don't understand why every one is so upset (and I own Apple stock!).
If Engadget did nothing but print a bunch of Press Releases, I wouldn't bother coming here. I'd go to Sony's website, or Apple's website, or Microsoft's website. I go to Engadget to get a "pulse" of what is happening in the industry and I expect the information here to be speculative at times. Optimus Maximus keyboard, anyone?
I'd want to know if an memo is bouncing around Apple regardless of its internal authenticity. Where are those ultraportable backlight LED macbooks that were supposed to be released on Tuesday? Did Apple lose $4B over that? I don't think so. So why should Engadget publish those rumors, but not publish a much more "legitimate" rumor? And then get blamed when a bunch of people are stupid enough to dump stock over it.
>ABSOLUTELY NO IMPACT ON THE VALUE OF YOUR STOCK.<
Have you ever heard of a stop-loss on a stock? Let's say Joe buys AAPL at $105 with the belief that the stock will grow. To be safe, he sets a stop-loss at $100 should there be a legitimate dip. If that happens, his loss is limited to that $100 minimum he set.
Joe leaves for work yesterday morning and AAPL is doing fine. Then the engadget blunder hits. Joe's stop-loss kicks in and he's out of AAPL. OH, but mere minutes later, engadget says, "OOPS!"
AAPL climbs back up to the level where Joe was still in a plus situation, but now Joe is out.
Why did this happen? Because Ryan Block did not check his facts. He owes so many people an apology, not a multi-paragraph excuse.
U don't understand, the stock lost value BECAUSE people lost money selling it.
If anything, this should just prove what a journalistic powerhouse that Engadget has become. I don't know if many of you share my sentiment, but in today's traditional news sources, all you hear about are tragic stories, and I find Engadget a refreshing alternative news source. I check it multiple times a day, and I trust their stories. However, this is not the first speculative post they've ever made, and I hope to god it's not their last. Great news is based on speculation, and I don't think any news outlet could survive without it.
I applaud Ryan for his thorough response to this situation. A couple of years ago I had the opportunity to speak with Ryan about a product my advertising agency was promoting. It was the iMuse Media Server Series, and his post about its specs created a large amount of interest in the product and the company. Ryan was extremely nice and seemed very grounded.
And to Ryan, if I would have kept your phone number, I would have called you and told you personally that you should not hang your head about this. You are a great journalist and have countless fans. I would suspect that those who lost money yesterday will make it up and then some it the coming days. Apple's stock is extraordinarily resilient.
To all of Engadget (and Ryan in particular) keep up the good work and keep reporting the stories as you see fit. You were, are, and still will be the best source of technology news on the web.
What is interesting is how much a spoofed internal email can hurt a company. A boatload of bad press and a not-insignificant stock drop followed an fairly easily prevented situation:
"Faking internal emails is one of the easiest things to do, ever. Just telnet into port 25 of your internal mail server and EHLO to your heart's content! I've only ever seen a very very very few companies ever who have locked this down. It's still rather trace-able which is why you don't see many people pulling this stunt. My guess is that someone in IT was "on their way out" and decided to have a little fun and send this little parting gift."
That right there is absolutely incorrect. It *shouldn't* and doesn't have to be the easiest thing in the world. If a company the size of apple is running sendmail or any other email server that vulnerable they deserve to have their stock go in the toilet. That is just bad IT practice. Companies with a properly configured exchange server would never have had that happen as the server will actively prevent distribution of spoofed email from an internal source. For a company that relies on internal information control as much as Apple to have such an abysmal internal mail system (whether because they were using an antiquated and crappy mail server, or simply were not capable of properly configuring a capable server) is unacceptable and while stock holders lost confidence in Apple for the wrong reason, the loss of confidence was deserved.
Hey Apple, John Hodgeman doesn't get spoofed internal email on his PC using microsoft programs...
Exchange has nothing to do with a "properly configured server". Microsoft didn't invent SMTP authentication and thank goodness there is enough prior art to keep them from patenting it. It's just as easy to fake emails on an Exchange server if SMTP Auth is not enabled or disabled for certain circumstances (ie that cheap UPS that can send alert emails that the boss thinks is the greatest trick since sliced bread but it doesn't support SMTP Auth). In fact, Exchange is just now getting SMTP capabilities that the others have had for years and heaven forbid you should ever need log data to track abuse down.
Engadget reporters, you keep doing what you do. My personal take is anyone who dumped stock over a web site post that quick are probably the same folks that fall for the pump-and-dump scams. I gamb... er, invest too but I keep it spread out so a dip like this doesn't sink the ship over the long term. Now can we get back to the gadgets?
Nice article but it won't keep the SEC off your back. Fun times ahead no doubt.