Tech Industry

Net a boon to private investors

Cyberian Outpost is one of several firms planning to let mom-and-pop investors listen to a live Webcast of its earnings conference call.

In another example of a company using the Internet to arm investors with more information, computer retailer Cyberian Outpost plans to let mom-and-pop investors listen to a live broadcast of this week's quarterly earnings conference call via the Internet.

Cyberian plans to report its second-quarter earnings on Thursday, and the online retailer will be joined next month by the likes of Motorola and Yahoo. The portal giant will release its results on October 7. Motorola will release its earnings on October 5, but will hold its conference call until the next morning before the markets open.

Individual investors have historically lacked live access to the quarterly telephone conference calls company executives present to analysts and sometimes the media. At best, some companies give small players access to taped versions of the call, hours or sometimes the day after it was held.

But an increasing number of companies--technology and otherwise--are using the Internet to broadcast annual shareholder meetings, present virtual roadshows of companies seeking investments for an initial public offering, and loop individual investors into earnings conference calls with streaming audio. They also are using automated email messages with reminders of earnings reporting dates or calendar changes.

"I thought it would be a good idea if we could open [the call] up as much as possible," said Kate Vick, Cyberian's chief financial officer. "I just think it's nice to provide a level playing field for the individual investor. Institutional investors tend to get more direct access to a company."

But technical limitations still can hinder individual investors' access to the information. Some investors may find the streaming audio or video can "drop out" while accessing the presentations, for example.

"Every once in a while a user will email in a complaint," said Stan Woodard, vice president of business services for Broadcast.com, a supplier of streaming audio and video technology. "A lot of people try to get a 56-K [modem] feed and they don't have a 56-K [device]."

Over the past couple of years, Broadcast.com has seen the type of companies using this technology change.

"Early on, it was the tech companies. They were closer to the Internet and understood it," Woodard said. "Now people see a wide range of companies doing it. One of the first nontech companies was Texaco."

Broadcast.com ran Texaco's first- and second-quarter earnings broadcasts and has since added other companies, such as Nike, to its lineup. The majority of companies use Broadcast.com's technology for conference calls, followed by shareholder meetings and product announcements.

On the conference call front, analysts still use a toll-free number to dial into the conference, which allows them access to also pose questions to executives. The public, however, remains in a listen-only mode during the calls.

Motorola had been an exception to that rule, allowing its investors to access its conference calls. That policy has chaned, however. Tim Callard, Motorola investor relations manager, said investor access to Motorola's conference calls has been an evolving process.

"We used to let investors join the conference call on the 800 number. But we had to pay a per-minute [ and per-person] charge for the conference calls and that wasn't cheap. Then we went to a toll number. But the Internet is cheaper and doesn't tie up the listener's phone line," Callard said.

Motorola has hundreds of listeners tapping into its earnings broadcast and the usage has remained steady, he noted. "The call lets investors listen to management, the tone of their voice, and the conviction of their numbers," Callard said. "The conference call is more of a subjective and has [question-and-answer sessions]."

Although Motorola has not Webcast its shareholder meetings, it may consider doing so down the road, he said. The company is also looking at a service by Corporate Communications Broadcast Network, which offers interactive tools for companies' investor relations Web sites such as allowing investors to go to a company's Web site and set up automated email messages for financial information and reminders such as reporting dates for earnings.

"We used to fax investors information," Callard said. "Now we want to email everything."