Two phony press releases announcing the bogus acquisition of a search engine company by Microsoft and Google purporting to be from a PR firm the company does not work with were issued last week via a discount wire service, sparking damage control by its PR reps.
Two PR pros from different agencies involved in the fallout also said the incident raises questions about the capabilities of discount press release disseminators.
A news release attributed to Chicago-based S&S PR was issued after 4 p.m. on Thursday, "Sept. 31" by 12PressRelease.com and WiredPRNews.com announcing that Local.com was acquired by Microsoft. The news sparked an uptick in the NASDAQ-traded company's shares in after-hours trading.
Steven Simon, CEO of Chicago-based S&S PR, told O'Dwyer's that was "stunned" to be cited by the phony release as his firm has never worked with Local.com. He was quickly contacted by Madison Alexander PR of Irvine, Calif., Local.com's actual agency, to sort the mess out.
Dan Chmielewski, principal of Madison Alexander, said the initial concern was that the release was part of a so-called pump-and-dump attempt to manipulate Local.com's shares. His firm worked with the client to issue a statement later on Thursday and use various social media platforms to spread the word that the release was phony.
"We got a considerable amount of coverage pointing out that it was a fake announcement, more coverage than the acquisition release attracted," he said.
Enter Business Wire
A second release was issued under similar circumstances on Friday, Oct. 1, announcing Local.com's acquisition by Google, but the author inserted "Business Wire" into the release, bringing that larger company, which has a contract with Local.com, into the fold.
"We were able to unleash the Berkshire Hathaway people on these sites," Chmielewski said of BW's parent company.
Business Wire contacted the company –- IPDGroup.com -- which owns a site that published the WiredPRNews.com release that included the BW tag and it was promptly removed.
12PressRelease does not provide any contact information by phone or email. Simon said an SEO-experienced staffer was able to trace the origin to Rotterdam, The Netherlands.
Chmielewski said the individual sending out the release paid for the two services with a PayPal account, likely making the transaction traceable.
NASDAQ has been contacted about the matter.
Chmielewski said he's made some progress in having the bogus releases removed from other sites that picked them up, but noted the frustration in working with the two originators.
BW, Chmielewski and Simon said the episode shows a credibility risk in using relatively unknown wire services. The releases contained several red flags, the two executives noted, like typographical errors and unconventional structuring.
"There are a host of very bad, free or cheap press release services and I think people understand that you get what you pay for," he said.
Simon said using a major service like PR Newswire or Business Wire lends legitimacy to the news being sent.
"Business Wire's vetting process serves to protect against this type of abuse of our own service, while the many free or low cost 'options' are vulnerable to this type of fraud," said Phyllis Danutono, BW's co-chief operating officer.
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