appearing on the AIMR Web Site at <www.aimr.com>

Investor Relations

Most of these Web Chats concern analysts' functions that can be substantially aided, even accomplished, by machine and electronic networks. Some of the functions that, previously, could not even be contemplated have become everyday reality, like reading a wide range of foreign-sourced press. Now I would like to address investor relations directed at analysts. From its 1998 survey, the National Investor Relations Institute   found that a vast majority of member companies have web sites with an investor relations section and use email to communicate with analysts and investors. While the expanded use of communications technology for investor relations is impressive, the content could be much, much improved. And we can foresee the day, not far away, when equity financing will use the new tools to become quite different, more efficient and more functional.

Let's start with the ubiquitous analysts' lunch with company presentations. Some see these as the central function of regional analysts' societies. Today, they are beginning to be replaced by company presentations on the web. Not surprisingly, a July 28, 1998 Prudential Securities' interview of Intel's Chairman, Andy Grove, was broadcast live on the Internet. If analysts participate live in a web cast, rather than from the more convenient archive version, there is usually provision to email questions. During its 1998 Annual Conference in Phoenix, Arizona, on May 20, 1998, AIMR broadcast a portion of the program live over the web (its first live web cast was from my living room in Switzerland in April).

An extension of the analysts' presentation is a financing road show. Company management often travel around the world at great expense saying the same thing over and over. Now with NetShow from Microsoft, a "road" show can be on the web, substantially improving not only content, but also everyone's attention and investment of time.

A few thousand companies and organizations now have a web presence with information for shareholders. You can view annual reports, press releases, current earnings, etc., on the web sites of companies such as PictureTel, AIMR, and United Asset Management. Most often the reports are in the same format as the paper-published material. Companies such as AT&T, for example, also permit registered shareholders to vote their shares via the Internet. Some, like Boeing and Disney, go beyond with company product videos and periodic management video presentations. But none, to my knowledge, maintains an FAQ section sparked by analysts' question. Instead, the same information is replayed, each time pretending that what is common, and has to be shared by law, is individual. Some alert company will use the FAQ concept to create a live prospectus, in real time.

Analysts struggle to understand company dynamics, and companies struggle to educate analysts in the forces that drive their businesses. Occasionally, the analyst has had direct industry working experience but usually not. So both parties have a keen interest in developing an informed constituency among influential analysts.

Tools are available. We have entered the world of business simulations. Imagine playing a business "game" to make strategic decisions. With programs from Powersim, for example, the executive can model complex problems "that involve time delays, use of real world data, manipulating multi-dimensional arrays and choosing an appropriate simulation algorithm."

Readers of this column know I am a longtime fan of video conversations. I've used PictureTel for years and recently note that MS NetMeeting works just fine except when Internet traffic is heavy. Because of the broad potential uses of videochats and videoconferences, there are a growing number of alternatives. I use some features of Intel's Create & Share in conjunction with RealPublisher on my system to record and publish daily video clips for my web site, and there are others that would be comparable.

Not only can we do the current job better (and I have not commented here on capabilities of data and search), but imagine what can be done in financing. Web techniques are not well adapted to the letter of today's regulatory procedures. However, the SEC is conversant with securities transactions via the Internet and knows that rules have to change to fit the global, instant, continuous, full/equitable disclosure and low cost potential of the web. Effective March 23, 1998, the SEC issued a detailed interpretation about the use of Internet web sites and cross-border securities offerings to U.S. persons (that would require registration with the SEC). The SEC's Interpretation further observed: "The interaction between the U.S. securities laws and the Internet can be expected to continue to evolve. As technology and practice develop, we may revisit these and related issues."

Issuers who imagine continuous, real-time offerings, assumption of specialist duties and responsiveness to market opportunities are being realistic. It will only require a few innovators to demonstrate that their goal is market improvement.

* * *

This column is the last of my regular contributions to Web Chat. My goal was to get it off the ground and to promote analysts' use of web tools. Done . . . and now it is time for analysts in daily practice to share their specific work applications with each other.

I shall continue to comment on these and other issues in the daily commentary on my web site at http://www.deanlebaron.com, and I am writing a book on investment matters which will be appearing as a work-in-progress on the site before publication. Of course, I'm available to AIMR and its members who would like my assistance.

Thanks for giving me this chance to promote my passions, both for the web and for machines and their use in our work.

Dean LeBaron
August 10, 1998

email <deanlebaron@compuserve.com>

website <http://www.deanlebaron.com>