Bruno Guissani posted an illuminating piece on the impact of cover stories in leading magazines on the performance of highlighted companies. What comes to my mind is the correlation with the Gartner Hype Cycle, the .com bubble ten years ago and the adoption cycle of Rogers (mass media = late majority ?). I wonder what this means for Google ? It seems its performance is still great. And how does this work in the blogosphere ? I would guess this reversal of fortunes is different in the blogosphere due to fact that bloggers are more in tune with the realities of companies relative to mass media. They are innovators and early adopters in my view.
"Three researchers at RichmondU's Robins School of Business have studied the companies that featured on the cover of three US business magazines (BusinessWeek, Forbes and Fortune) over a period of 20 years, to try to determine whether positive stories were associated with superior future performance and negative stories with inferior future performance of the featured company -- in other words, whether the coverage was a good predictor. Quick answer: yes, but in reverse.
As the researchers put it in their paper, "positive stories generally indicate the end of superior performance, and negative news generally indicates the end of poor performance". No wonder the paper's title talks of cover stories as "effective contrarian indicators". Not particularly flattering for journalists."