A Stock-Killer Fueled by Algorithm After Algorithm
What made a six-year-old article about a bankruptcy filing by United Airlines reappear on Wall Street traders’ screens on Monday as if it were fresh news, prompting a sell-off that erased $1 billion in the company’s market value in a matter of minutes? The path the article followed from forgotten archive entry to present-day stock-killer has begun to emerge, and it raises some interesting questions about how news rockets around the Web.
Both human error and far-from-foolproof technology seem to have played a role in the episode, which involved a 2002 Chicago Tribune report; the web site of the Sun Sentinel, a Florida newspaper owned by the same company; the Bloomberg News financial wire service; and Google, all apparently unwittingly.
The Tribune Company laid out the results of its preliminary investigation into the incident in a news release late Tuesday afternoon, beginning with a line that painted its newspapers as victims of circumstances beyond their control:
The December 10, 2002, Chicago Tribune article on United Airlines’ bankruptcy filing, along with thousands of others stories in the searchable database of the Sun Sentinel website, was accessible for years.
The trouble seems to have started on Sunday, when a link to the old article turned up on a page on the Sun Sentinel site that automatically lists the most popular business stories of the moment. Why did such old news suddenly garner enough attention to land it there? Tribune hasn’t offered an explanation so far, except to say that the story was not promoted elsewhere on the site. So one open question is precisely how many clicks it took to earn a spot on that ranking — dozens? hundreds? thousands?
Any effort to find out more would lead down the many roads that readers may follow before converging anyplace on the Web. Sometimes, there’s an obvious answer tied to the news. Sometimes, it’s seemingly random phenomena. Just one look at Google Trends, the search giant’s version of a most-popular chart, would yield both kinds of items.
Had the old article merely spent a bit of time on that Sun-Sentinel list before returning to the archive, no harm would have been done to United. But a second piece of software apparently stopped by to analyze the work of the first one, and it would call the article to the attention of a much larger audience.
Normally, Web sites welcome the arrival of Google’s “bots,” which “crawl” around the Internet, following links and cataloguing the content they find for users to search. Indeed, many sites have been optimized in recent years specifically to make it easier for Google’s bots to detect new material quickly and bring it to Google’s monstrous audience. Most-popular-articles rankings are one place where Google News bots find the headlines they aggregate for readers. Up it went.
And there lies a rather big catch, which constitutes the biggest disagreement between Google and Tribune. Google believes that the fact that the bankruptcy article dated from 2002 was not obvious to either robot or human:
It has been widely reported that many readers were unable to determine the original date of publication of this article, and our crawling was similarly unable to recognize that the article was old.
For its part, Tribune says that no one who actually read the story could have mistaken it for fresh news:
The December 10, 2002, 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. It appears that no one who passed this story along actually bothered to read the story itself.
Neither assertion contradicts the other, but Tribune seems surprised by a reading style that is commonplace in the age of Google. As Nicholas Carr wrote in an Atlantic essay entitled “Is Google Making Us Stupid?” last month, “Once I was a scuba diver in the sea of words. Now I zip along the surface like a guy on a Jet Ski.”
As for preventing another similar incident, leaving sharper date cues for Google would seem to be far easier than changing the habits of millions of readers. In this case, though, it only took one reader to open the barn door for United stock’s shockingly swift decline — the one working at Income Securities Advisers, who saw the item on Google News and sent out a summary of it on Bloomberg News.
Stripped from its original context, the report gave traders who were already nervous about airline stocks just enough information — “UAL Files for Bankruptcy” over the weekend — to start them pounding the sell button, and not enough time to think twice about salvaging whatever was left of their stake.
Of course, software had a hand in the sell-off as well. “The damage was exacerbated by the growing use on Wall Street of automated programs that trigger stock trades without any human interaction,” The Wall Street Journal reported.
As the search for blame returned once again to something rather than someone, it appeared that United and its shareholders will have a hard time getting satisfaction after an astonishingly bad break.
