Wednesday, January 20, 2010

Learning from European IR Websites

First, a brief announcement: registration is now open for my seminar, “Fundamentals of Investor Relations” to be held February 24th at The Houstonian Hotel. If you are interested in attending, simply go to my web site, click on the Seminars tab and follow the instructions at the bottom of the page to register. We are offering a high quality educational experience at a compelling price.

And now for something completely different (apologies to Monty Python): Like most modern day office workers, I spend a lot of time in front of my computer getting information off the web. When I do research on companies, I usually start at a general financial information site (my personal favorite is Google Finance, but there are plenty of others out there) to get a quick overview before moving to the company’s investor relations site. What I find when I get there is that many of the investor sites for U.S. companies tend to be very cookie cutter in their approach. In short, the sites are not very interesting or innovative. My impression is that the sites have been assembled from a menu of standard options, sort of the way you can order off a Chinese menu.

I find this somewhat depressing, given the decline in print media as a means of delivering a company’s story and the inherent flexibility that the web provides. As I thought further about it, my conclusions were that there are probably two factors at work here. First, most companies choose to outsource the process of building and maintaining the investor web site portion of their company’s site. I can’t say I blame them for this, as A. doing this well is beyond the capabilities of most smaller companies and B. if you’ve ever worked in a large corporation that maintains the web site internally, you know that investor relations is well down the priority list of most programmers.

Second, the market for providing outsourcing of investor relations sites is essentially a duopoly in the U.S., with all the implications that has on pricing and innovation. Least you think I’m just talking through my hat, over the past couple of years I have spent a fair amount of time looking at European investor relations web sites, and in a number of respects, they do it better. For example, as you can see in the screenshot below, the Italian energy company ENI has a killer main IR page that allows you to customize how you want the information to look through the use of movable widgets.

Or how about a graphics generator for your key data? The screenshot below comparing net income to free cash flow is a graph I generated on the website of EADS, the European defense contractor. The entire process took me six clicks of my computer mouse – no cutting and pasting, and no downloading financials and parsing through the entries and fussing with excel charting functions.

Finally, we live in an increasingly mobile society, but U.S. investor sites seem to think that everyone is sitting at their desk. Below is a screenshot of the Stay in Touch page for Aviva, the U.K. insurance company that gives investors a number of ways to receive their information.

The point of all of this is that here in the U.S. we tend to get a bit insular. We have the largest and most robust capital markets in the world, so naturally we think everything we do connected to those markets is the best as well. However, there seems to be some very innovative things being done for investors in Europe. We could improve our web sites by broadening our horizons a bit.


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