Corporate Finance


CFO looks at 50 corporate Web sites to assess how well they keep investors informed.
Stephen BarrFebruary 1, 2000

If you logged on to the Internet and wanted to find out about the latest quarterly earnings for International Paper Co., you would need to look no further than the corporate home page ( Right there, in the middle of the computer screen, you’d find a green hyperlink labeled “1999 4th Quarter Earnings Press Release.” Click, and you’d go right to the company’s January 1 release.

Finding The Boeing Co.’s ( latest earnings takes two clicks–one to reach the investor-relations home page, a second to reach the release. Campbell Soup ( requires three clicks; Lycos Inc. takes four; Philip Morris Cos., five. Such disparate results prove what the estimated 25 million investors who gather corporate financial information on the Internet already know: online investor relations is all over the map and changing every moment.

“We have to make these sites user-friendly,” says Edd Grigsby, vice president of investor relations at Phillips Petroleum Co. “I believe that if you have to click more than three times to find any key piece of investor information, you’re going to lose people.” By the way, it takes three clicks on the Phillips site (

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The explosive growth of the Internet is not only changing the way companies conduct their business, it also promises to forever alter the way they communicate business performance. With investors demanding instantaneous access to corporate disclosure, and regulators pressuring for more openness, effective IR on the Web will be key to building shareholder value in the future. Information availability may soon determine which companies benefit from market insight and which are hurt by market ignorance.

In a review of more than 50 IR Web pages selected at random from the Wall Street Journal”s “Index to Businesses” from Wednesday, November 24, 1999, CFO did more than count clicks. Based on conversations with corporate executives, IR consultants, and shareholder advocates, we identified seven critical features that make for an exemplary investor.

What we found was that only two sites, Dayton Hudson Corp. ( and Motorola Inc. (, came anywhere close to excelling in all seven categories.

With the explosive growth of online investing, with the days (and nights) of extended trading hours nearing, and with more global investors, the desire among shareholders for direct, immediate access to relevant, timely, and well- organized information has never been greater. And it will continue to grow.

No longer will a company’s shareholders be a relatively small group. There are currently an estimated 10.5 million online trading accounts, the overwhelming majority of which belong to individuals looking for convenience and lower fees, not to day traders. That number is expected to double by 2001, and the equity assets in these accounts will reach $3 trillion by 2003, from about $400 billion at the end of 1999.

“You’re going to be looking at an increasingly fragmented shareholder base,” advises Louis Thompson, president and CEO of the National Investor Relations Institute. “You won’t be able to go to your top 10 investors and cover 50 percent of your outstanding shares anymore.”

Moreover, Thompson notes, even institutional investors are turning more often to the Web for corporate information. In a recent survey by the Association for Investment Management and Research, 65 percent of analysts and portfolio managers indicated that a corporate Web site makes it “easier to provide an accurate analysis of a company.” Little wonder the Internet is emerging as a critical tool for promoting a company to investors.

“Companies whose materials are most available will be the ones who most attract capital,” says Nell Minow, a former principal at LENS Inc., an activist money manager in Washington, D.C. “If you make it hard to find information online, you’re telling investors that you’re not committed to letting them know how you’re doing. And they’ll go elsewhere.”

Although every Web site is distinct in design and feel, the most effective IR tools share these characteristics:


On most of the corporate Web sites surveyed, it took no more than three clicks to reach a company’s latest earnings release. Only Merck had a permanent hyperlink at the top of its corporate home page. Other one-clickers, such as The Home Depot Inc. (, removed the link from their home page as the subsequent quarter wore on.

But the number of clicks to a key piece of information is not the only measure of accessibility. Inclusion of an explicit “Investor Relations” button on the home page is another, though many companies make investors guess where to look.

Consumer-oriented sites, like Nike Inc.’s (, and sites that are largely portals for E-commerce, like Inc.’s (, make it even harder. They tend to put their general corporate or IR hyperlinks in less-prominent places, typically at the bottom of the home page. “There should be a button at the top, no matter how unhip it looks,” says Minow.

Organization is also important for helping guide investors. The latest earnings release for Broadcom Corp. ( is only two clicks from the home page, but it is buried among other corporate releases and hard to locate. Financial press releases, experts say, should be grouped separately.


Most visitors to a company’s IR pages are either current or prospective shareholders. “What they want to know, in 30 seconds or less, is why they should invest in the company,” says Jeff Christensen, executive vice president of Christensen & Associates, an investor relations consultancy based in Scottsdale, Arizona.

Increasingly, sites include a corporate background, history, and fact sheet buried behind various links on the IR home page. But few use that main page to clearly and concisely state the investment value offered to shareholders. Dayton Hudson is the most direct, stating in bold type: “We remain confident that Dayton Hudson can continue to deliver 15 percent annual earnings per share growth over time.”

Others use the IR home page to promote their business models and market positions. Under the headline “A Wealth of Knowledge,” Electronic Data Systems Corp. ( states in a graphic way that it offers “end-to- end business solutions” to the E-commerce market. Still others, such as Inc. (, McDonald’s Corp. (, and SFX Entertainment Inc. (, rely on text (and too much of it) to convey an overview of the company’s vision. Saks Inc. ( and Sigma-Aldrich Co. ( put their succinct mission statements on their corporate home pages.

“CFOs tell me all the time that there is no company out there that’s exactly like theirs,” Christensen notes. “But they need to do a better job of communicating that to investors.


According to a study conducted last June by the National Investor Relations Institute (NIRI), 13 percent of companies were Web- casting their earnings conference calls live, while an additional 35 percent said they were considering doing so. And that was before Securities and Exchange Commission chairman Arthur Levitt turned up the heat on selective disclosure and, in a speech last October, urged all companies to open their conference calls to the public.

“You’re going to have to do it soon,” predicts NIRI president Louis Thompson.

In addition to offering more Web- casts, leading-edge companies are archiving audiotapes of recent talks and the PowerPoint slides from those presentations. According to Rob Adler, president of, a Boston- based consultancy that provides IR Web services, IR traffic has doubled quarter-to- quarter for clients that provide such multimedia tools, but has grown an average of only 15 percent for others. The reason: “You’re giving people truly valuable information they can’t get anywhere else,” he says.

“Levitt advocates more openness,” Christensen comments, “and technology can help make presentations available to everybody, not just professional investors.”


Technology can also help keep investors coming back to your IR pages on a regular basis. On about one-third of the sites we observed, investors could sign up for “E-mail alerts” that notify them about new developments at the company–everything from an earnings release or SEC filing to the annual meeting, to a road show schedule, to upcoming speeches at industry events.

Some closely followed companies have tens of thousands of investors receiving E-mail alerts, says CCBN’s Adler. In the past year, the number of companies offering such a service has tripled, to more than 600.

“Investors can’t be expected to skim through dozens of sites every day to see if something is new,” says Grigsby of Phillips. “This gives them a heads-up to go to your site.” Three hundred people have signed up for this so- called push technology since the company instituted it a little over a year ago.


It takes some work, but you can find the latest earnings release for Delta Air Lines Inc. ( in just three clicks. However, if you want to know any more about the company, forget about it. The Web site is all about selling airline tickets, and offers virtually nothing to inform investors.

Delta is an anomaly these days. Every other site we reviewed offered a basic package of financial information, including links to financial and other corporate releases, annual reports, SEC filings, stock quotes, and a stock chart. About half had a set of frequently asked questions, background on management and directors, a calendar of upcoming earnings announcements and other relevant events, and a compilation of the company’s financial fundamentals. About 20 percent permitted direct stock purchases using a credit card.

Our survey found only a handful of sites with a list of analysts who follow the company and a table of analysts’ consensus estimates. Experts predict these features will become standard fare as more investment decisions are guided by changes in analyst recommendations and company earnings relative to consensus estimates.

Some of the sites we looked at included the analysts’ phone numbers and some didn’t; SFX posts the analysts’ E-mail addresses. The estimates, which we found on sites for KeyCorp ( and Omnicom Group Corp. (, among others, include projections into 2001. Disclaimers about the forward-looking implications of these estimates may quiet some lawyers, but others worry that posting the consensus is tantamount to telling the Street you’re “comfortable” with its numbers.

“You’re tying yourself into that estimate,” opines consultant Christensen. “You can put disclaimers on it, but you run the risk of lawsuits if you don’t meet them.” There is universal agreement that the IR pages should not offer a direct link to analyst research reports, and less than 1 percent of companies do.


Boeing CFO Deborah Hopkins has built an improvement plan for the giant airplane manufacturer linked to key financial and operational metrics, and the IR pages offer several links to data that reflects the company’s progress. You can look at a “Value Scorecard” that shows short- and long-term goals on such measures as inventory turns, facility consolidation, and operating margins.

Even more impressive are the series of pull- down windows on Boeing’s IR home page. These allow you to look at a vast array of supplemental financial information, as well as such nonfinancial data as orders and deliveries, production system improvements, prices, and the current market outlook for commercial planes. Similar information is available for Boeing’s other divisions.

Investor demand for information more timely than quarterly results is expected to grow. That might be satisfied by requiring regular Web-postings of such data as sales figures– something many retailers and carmakers already do–or perhaps direct, real-time access to key performance metrics, (see “Back to the Future,” September 1999).

Of the sites reviewed, Boeing’s has the most robust set of data, with Microsoft’s a close second. The software giant provides “analysis tools” that let you download in Excel format historical financials dating back to 1985, revenues by sales channels and product group, and the income statement in six other languages and currencies. The “do-your-own forecasting” feature, as the site puts it, allows investors to project the FY2000 income statements by plugging in whatever assumptions you like. Add another billion dollars in sales, and see that ripple through.


Some companies recognize that investors with IR questions would rather reach out and feel they are touching a real individual. Sigma- Aldrich posts the name, E-mail address, and direct phone number of its treasurer, Kirk Richter, on its IR home page. Aetna, Phillips Petroleum, and TRW Inc. ( do the same for their IR directors.

“If people want to get hold of someone, they should be able to do that,” says Richter, who says he gets about 10 queries a week.


The information most sought by users, based on a review of 950 IR Web pages.

(Chart omitted) Who Does What Well?
Using the Wall Street Journal’s “Index to Businesses” from Wednesday, November 24, 1999, we chose corporate Web sites to review for their investor-relations pages. Here’s where we suggest you look for examples of effective online IR practices.


  • Boeing
  • Foundation Health Systems
  • Home Depot
  • J.P. Morgan
  • Merck


  • Dayton Hudson
  • Electronic Data Systems
  • Motorola
  • Sigma-Aldrich


  • Boeing
  • Dayton Hudson
  • Host Marriott
  • Microsoft
  • Motorola


  • Dayton Hudson
  • Immunex
  • KeyCorp
  • Lycos
  • Motorola


  • Electronic Data Systems
  • Home Depot
  • Motorola
  • Omnicom
  • SFX Entertainment


  • Boeing
  • Cisco
  • Federal Express
  • McDonald’s
  • Microsoft


  • Aetna
  • Motorola
  • Phillips Petroleum
  • Sigma-Aldrich
  • TRW

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