Anatomy of an automation disaster Hrush
This post is a little late to the party, but we thought it was rather interesting that the automated scraping of a news site by Google could be the root cause of a $1 billion drop in a company’s share price. Here’s what happened in a nutshell.
Back in 2002, United Airlines filed for bankruptcy, an event that the Chicago Tribune duly covered as news and published, both online and offline. The story lay gathering digital dust in the Tribune‘s archives for almost six years, until a link to the story turned up on the web site of “The Sun Sentinel“http://www.sun-sentinel.com/’. Based on traffic to the site, the Sentinel‘s publishing system automatically grouped the old story with other stories under a tab called “Popular Stories Business: Most Viewed.”
Had the ‘automaton’ stopped there, it’s unlikely there would have been any impact on United’s stock, but we live in the interconnected Internet era of ‘Interwebs.’ Google News’ automated spidering bot came along to visit the Sentinel and the story went from the Sentinel‘s small audience to Google’s massive audience.
One member of Google’s audience (who in all likelihood signed up to receive automated alerts for news stories featuring United), working at Income Securities Advisers saw the news and promptly sent out a summary via Bloomberg News–within minutes, United had lost over $1 billion in market capitalisation.
The New York Times illustrates the sequence of events with this graphic:
The Tribune had this to say:
The December 10, 2002, story contains information that would clearly lead a reader to the conclusion that it was related to events in 2002. In addition, the comments posted along with the story are dated 2002. It appears that no one who passed this story along actually bothered to read the story itself.
In other words–the machine read the story, but couldn’t detect the context; the man saw an alert, but didn’t actually bother reading–a clear cut case of human error compounding machine error and creating a billion dollar disaster for United.
As we recently pointed out, the machines aren’t quite there yet…
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