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NY Times rattles IT industry with analyst ban

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On Nov. 10, the New York Times declared a radical change in its editorial policy. The paper ceased quoting technology analysts in stories, if the analysts do business with the vendors mentioned in the articles. The policy shift has proved so radical that the Times has failed to adhere to it.

The Times needed only 121 words to ban cozy analysts from its sacred pages.

"An article in Business Day on Tuesday described a decision by Microsoft to offer movies and episodes of television shows for downloading through its Xbox Live online service in the United States," the paper wrote in an editor's note.

"The article quoted Rob Enderle, principal analyst at the Enderle Group, discussing the features that set Xbox Live service apart and its position in the market. But the article did not note that Mr. Enderle had Microsoft as a client, a fact later pointed out by a reader. Mr. Enderle does consulting work for several of Microsoft's product groups, though not for the one developing the Xbox; still, had The Times known of Mr. Enderle's work for Microsoft, it would not have sought out his opinion on the product."

A few months back, we documented a similar incident where Enderle appeared in an Economist story eviscerating Sun Microsystems. Enderle does count or has counted the likes of IBM, HP, Dell and Microsoft - all major Sun rivals - as clients - a fact the Economist failed to disclose. The analyst/consultant took exception with our approach to the issue by saying that his work for Sun competitors centers on PC technology, which has "nothing to do with" Sun's overall business - a statement made true only by Sun's ineptitude selling thin client terminals. [Ironically, in his letter to The Register, Enderle celebrated his contributions to a New York Times story about Lenovo being misrepresented by politicians and the press. The analyst has counted Lenovo as a client, although that's not disclosed in the story.]

The Times, however, appears to have similar concerns to us. The paper is not comfortable quoting the analyst on Microsoft matters even when he doesn't cover the particular product line in question.

(The Register tends to quote analysts far less than most IT publications. We do not require reporters to place opinions in the mouths of pundits as many organs do, and we spend a great deal of time critiquing the analyst community. That's not to say that we're perfect. We too quote industry analysts without disclosing all their ties to vendors.)

Technology analysts have escaped the same burdens faced by peers in the financial analyst racket. Following the recent corporate scandals, most financial rags now disclose the positions held by authors and quoted analysts at the end of stories. The editor's note from the Times would seem to suggest that the paper now feels a similar policy should hold for technology analysts or that they should not be cited at all when their clients are involved in a story.

Robbing Rob

It's curious to us that the Times has singled out Enderle here.

Since Nov. 10, the paper has plugged Gartner eight times, IDC once, Jupiter Media once, Forrester Research once, ABI Research once, the Yankee Group once and the list goes on. The phrase "an analyst" appears in close to 20 technology stories since Nov. 10 and almost always accompanies a quotation.

Speaking of which, let's see what triggered the Enderle/Microsoft ban.

In a story about Microsoft's XBox, Enderle described the direct relationship between the game console, download services and the TV.

"What makes this big is that there's no PC in the middle,'' he said.

The statement does little for the story other than adding a touch of enthusiasm.

Later, the Times added the following:

Mr. Enderle said that apart from simplicity, another feature that would set the XBox Live service apart is that it will be the first service to sell downloadable movies in high definition, at a resolution similar to or better than a DVD.

Until now, he said, most studios have been reluctant to allow cable channels to show movies in high definition for fear of piracy, but that would be less of a threat on XBox Live.

Let's compare those comments with some found in a Dec. 1 story on Microsoft's new Windows and Office software. The piece touched on Microsoft's Sharepoint collaboration software - a popular product, according to Michael Silver at Gartner. "That's a big lock-in factor and it helps Microsoft, at least for the next few years,'' he said.

Later, Jim Murphy, from AMR Research summed up Microsoft's new flagship products. "This is a better Windows and a better Office, and there is no feasible alternative for most companies,'' he said.

The story failed to disclose whether the analysts' firms maintain a relationship with Microsoft, although you can be sure they do.

The analysts' statements seem just as enthusiastic as Enderle's, and a similar - if not the same - relationship appears to exist. So why does Enderle get the rough treatment?

We had some long discussions with Enderle about our story earlier this year. During one chat, he charged that our "tabloid like approach" to reporting on him put smaller analysts at a disadvantage. The big firms such as Gartner and IDC can handle some bashing, but a one-man shop like the Enderle Group could suffer greatly from even an unsophisticated, small-time smear campaign.

Enderle has a strong point.

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