Google’s cagey. Understandably so.
It gave a peek into a sprawling maze of computers in its $600 million data center this week, but wouldn’t say how many it has.
Lots, OK? Can’t give a number.
Involves competitive advantage, intellectual property. Would have to kill you.
Oh, but wait, you say you want a peek at Google’s less-than-stellar quarterly earnings report?
You want that around lunchtime, you say, about 3.5 hours before its scheduled release?
Yes, that’s what happened to the company that’s so scrupulous about data protection that it uses what Wired’s Steven Levy calls “a small cadre of engineers” to attack its own infrastructure, popping leaks in water pipes, staging protests outside the gates to distract attention away from intruders who aim to steal data-packed server disks, screwing around with the ad network, and cutting fiber connections to Asia.
That in-house staging of attack scenarios didn’t really work.
What did bring down this data giant?
What nefarious, complicated scheme of Mission Impossible-esque ninjas and code crunchers caused the company’s earnings to leak out hours early, carving $22 billion dollars from the flanks of Google’s stock value, given the company’s disappointing third-quarter earnings?
Fingers. Fat ones.
It was human error, on the part of financial printer R.R. Donnelly, in whose ranks there exists somebody who now must be getting a stern talking-to, unless the poor sod has already been fed to alligators.
Here’s what Google said in a statement after the early release, which caused its stock to plunge 9% before Nasdaq halted trading in the early American afternoon on Thursday:
"Earlier this morning R.R. Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization. We have ceased trading on NASDAQ while we work to finalize the document. Once it's finalized we will release our earnings, resume trading on NASDAQ and hold our earnings call as normal at 1:30 PM PT."
Wow. That’s certainly a painful example of how accidental data loss can hurt your company.
The third-quarter earnings report was due out after the market closed but was instead published on the Securities and Exchange Commission’s website at 12:30 pm ET on Thursday.
As the Wall Street Journal notes, the report wasn’t quite ready for prime time – a fact denoted by a spot reserved for a canned bit of verbiage from CEO Larry Page that read “Pending Larry Quote.”
Doug Fitzgerald, a spokesman for R.R. Donnelley, told the WSJ that the company is investigating.
R.R. Donnelley’s statement:
"We are fully engaged in an investigation to determine how this event took place and are pursuing our first obligation – which is to serve our valued customer."
Cyber attackers might make for more titillating headlines, but this mess-up shows that even a tech superpower like Google can get its shins badly kicked by data leakage caused by simple human error.
8 comments on “Accidental data leak helps wipe $22bn off Google’s stock value”
Lot of fuss about nothing, the earnings report was due to be released anyway (they can’t change facts). The share price will find its own level again in a few weeks hopefully based on the earnings figure. The only people who lost were those who speculate on shares in the short term, my heart bleeds:-P
My heart bleeds as well, she says, rubbing her fingers together in the standard world's-smallest-violin gesture. I don't know that Google would necessarily agree that it was nothing, though. Methinks not.
Where there is one error, one possibility of a slip-up, there is possibility of further shoddiness.
You guys seem to be copying everyone else in saying that the early release of the doc caused the entire loss. You'd swear from this article if the document had come out, what, 3.5 hours later the loss wouldn't have happened at all.
The loss would have happened anyway. Maybe not as much if the market was closed when the report first appeared but the shares would go down for sure.
Also the graph is a sham. You didn't label the price axis. It looks as though the shares lost almost all their value. You cut off the bottom of the graph at the lowest price after the drop. If the shares had dropped a one half or one fourth of as much your graph would have looked exactly the same.
Fair points – but the graph came from Yahoo Finance. We weren’t the ones who cropped it 🙂
Perhaps for regular Yahoo Finance users the graphing convention is assumed, but with no context a graph without axis labels is pretty meaningless. A graph with labels would be better to include in the blog, such as Google Finance: http://www.google.com/finance?q=NASDAQ%3AGOOG
I don’t think the purpose of this blog is to dig into stocks/shares details – check the provided references and you’ll see that the loss of $22bn corresponds to a drop of 9%, no matter the graph color or font.
Second, direct shares drop isn’t the only consequence. It also made any DLP policy or solution @ Google totally useless – you simply cannot fight idiocy, especially when it comes from your executives.
I respectfully disagree. It wasn't "accidental data loss [that] hurt [the] company." It was high frequency stocks trading that caused the exaggerated loss. Like the first commentor said "The share price will find its own level again in a few weeks hopefully based on the earnings figure". Common sense trading would not have caused that loss, blind computer algorithms did.
Ha ha ha. My heart Profuse Portions of Purple Panther Piss for poor ol' Google.