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Blogonomics The Upside Of Transparency

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by Felix Salmon
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Nov 01 2007 12:00am EDT

Blogonomics: The Upside of Transparency

You won't be surprised to hear that I think it pays for companies to encourage their employees to blog, and to be as open as possible. But don't take my word for it. Instead, take the word of Rohit Aggarwal, Ram Gopal, and Ramesh Sankaranarayanan, all of the University of Connecticut, who have just published a 37-page paper on the subject, entitled "Negative Blogs, Positive Outcomes: When Should Firms Permit Employees to Blog Honestly". I'll let Chris Dillow sum up the upside of negative posts:

Such postings attract more attention and page views than bland pro-company posts, which means that subsequent, positive posts get more attention. What's more, because the employee is free to post bad things, these positive posts are more credible.

The paper does get extremely technical, and I'm not remotely qualified to judge the methodology, which includes things like this:

An empirical model is developed to account for the inherent non-linearities, endogeneity and unobserved heterogeneity concerns, and potential alternative specifications.

But if anybody at Condé Nast ever complains about me criticising the mothership (and to their credit, they never have), I'm going to point them right here.

And while I'm on the subject of transparency, many congratulations to Andrew Leonard, who writes the excellent How The World Works blog for Salon: as of today, he has a full RSS feed! There's now no reason at all not to subscribe to his blog: go and do it, now.

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