Google and Mainstream News Goofs Caused United Plummet

United Airlines stocks plunged Monday after news the air carrier was filing for bankruptcy protection was published on the front page of Google News. United shares fell over 75% in a confused six minute period during which trading in the stock was halted so market regulators could figure out what the heck was going on.

When the source of the story was discovered, the red lights flashing on Wall St. paled in comparison to the embarrassed red faces found in Mountain View CA and Broward FL, and the angry red faces of United Airlines lawyers. The run on United Airlines shares was caused by a series of malfunctions, some human and some algorithmic.

In reality, United Airlines was not getting ready to file for bankruptcy protection. United had already done that. Six years ago. In short, the fiasco was caused by a very big error which was caused by a series of systemic mistakes.

Somehow, a real story (written in 2002) about United Airlines post 9-11 financial issues from the Chicago Tribune was reprinted late Saturday (September 6) in the South Florida Sun Sentinel. From there, it was picked up by two extremely important news sources, Bloomberg and Google News, both of which ran it as if it were a current article.

Google says it perceived a new link (to the story) added to the Sun Sentinel website on Saturday September 6 at 10:26pm Pacific which was inserted after Googlebot’s last crawl at 10:17pm. That link lead to an article titled, “UAL Files for Bankruptcy.” The link appeared in a box labeled, “Popular Stories: Business” (Google News Blog)

On Monday morning, the story was inserted on Bloomberg by Income Securities Advisors, a company based in Miami which publishes financial information to the Bloomberg website. While searching for information on distressed companies, one of Income Securities Advisors’ reporters conducted a Google search using “bankruptcy 2008″ as the search query. The six year old story came up as the #1 result with a link to the Sun Sentinel story.

The Sun Sentinel uses a web-based template that automatically inserts the date on dynamically created pages (such as a story from the archives). When the reporter from Income Securities Advisors saw the story in the Sun Sentinel, the date September 7, 2008 appeared at the top of the page, just below the SunSentinel.com logo.
Thus, both Googlebot and a live reporter viewed an article that appeared to be fresh, even though the information contained in the article was six years stale. Google News published a link to it and, upon finding that link, Bloomberg’s third-party reporter reported it.

The story was published on Bloomberg at approximately 10:55am when United shares were trading at $11.51. Within a minute, share prices had fallen to just over $3.00 and trading was halted. Five minutes later, at 11:01, trading resumed and by 12:30pm, United stock had recovered most of its share value, trading at $11.30/share. Bloomberg deleted the story from its pages around 11:08am.

According to a statement from the Tribune Co., owner of the Sun-Sentinel, “The story was located in the archive section of the Web site of the Sun Sentinel in South Florida. The story contains information that would clearly lead a reader to the conclusion that it was related to events in 2002. In addition, the comments posted along with the story are dated 2002.”

Unfortunately, it didn’t work that way. Google News is an automatic news agrigator. It finds stories from trusted sources and then reads those stories the same way a live-reader might. In other words, Google News was served the same template an actual live-human reader (such as the Income Securities Advisors reporter) would see. That template, served by the Sun Sentinel clearly shows the date as September 7, 2008.

So, who gets to take the blame in this case? That’s something the Securities Exchange Commission will be looking into. Information spreads at the speed of light and millions of stay-at-home traders use instant information to make their choices. Similarly, many stock trades are automatically triggered by events such as a sudden drop in share prices. It is very possible to use misinformation to trigger an event in which those with correct information stand to profit wildly.

Google is partially to blame for spreading misinformation however, Google’s information machine is automated. Income Securities Advisors is partially to blame for inserting a stale story as if it was real news. The Tribune Co., owners of the Sun Sentinel are partially to blame because it was their newspaper which published the link leading to an archive story that was packaged to appear current. In other words, everyone involved except United Airlines and its shareholdes appears to be at fault to one degree or another. Ultimately, it was a series of systemic screw-ups that caused United Airlines shares to plummet earlier this week.