• by Diane Mermigas , June 6, 2008

When moguls speak, they need to duck for the boomerang.

In many ways, the chief executives have become products of the digital revolution: pop-culture stars who make even hardcore journalists swoon. These new-age media moguls are savvy about playing to conference crowds, making a venerable TV impression, and artfully hiding behind obscure, safe on-the-record comments as heads of public companies. But they are powerless to exert much damage control over the inevitable boomerang of comments, changed circumstances, and all-around cyber-smacking.

The textbook case was former Bear Stearns CEO Alan Schwartz. In March, he insisted there was no imminent threat to the investment bank's liquidity--just days before it was rescued from bankruptcy by JP Morgan Chase.

Both executive candor and pretense are standouts in an endless torrent of viral news. On the eve of a favorable court ruling, an often acerbic Barry Diller was heartfelt and frank in reflecting on the possibility of losing InterActiveCorp. in his legal battle with nemesis John Malone. But when it comes to candid and visionary, News Corp. Chairman and CEO Rupert Murdoch tops them all.

The late Larry Tisch, as CBS' majority shareholder and CEO in the late 1980s, had no qualms about categorically denying plans to sell company assets in my interview with him, only to ceremoniously announce the sale of CBS Music days later. Having interviewed the biggest and brightest media leaders, I still say the honorable way out (given stiff disclosure regulations) is "no comment."

But the Internet age's relentless glare of headlines, comments, statistics and instant analysis presents corporate executives, the media and consumers with a new dilemma: determining the truth.

There is the truth of the moment--without context, shades of truth, intended truth, or conditional truth. There is the truth of blogs, professional news organizations and press releases--all of them selective in their spin. Even quarterly-earnings releases can be prepared to present information favorably. The mandatory 10K filing for public companies comes closest to a truthful snapshot in time.

The press and the public want a quick fix of truth in public speeches, conference appearances and investment banking presentations. It's usually a glimpse of persona, a brief, thoughtful exchange, a juicy quip, the company line or cautious response. What executives don't say is often more important than what they do say--and usually raises more questions than answers.

For instance, comments from Yahoo CEO Jerry Yang that he is still trying to "understand" Microsoft's interest during a conference last week (preserved in perpetuity online) were discredited this week. A court released a complaint Yahoo fought to conceal detailing its board's poison pill tactics to sabotage Microsoft's unsolicited bid. Activist shareholder Carl Icahn, leading a proxy fight to remove Yang and his board, ranted: "How can Yahoo keep saying they're willing to negotiate and sell the company on the one hand, while at the same time they're completely sabotaging the process without telling anyone?"

The sound-bite phenomenon has become routine in this presidential election year. McCain has a senior moment, confusing the names of countries or speaking without cue cards. Hillary Clinton misspeaks or is misunderstood, sending a racial high-voltage jolt through both parties. Barack Obama's inspiring, some claim calculating, discourse is tailor-made for cyberspace--and it won him a presidential party nomination, despite the lack of detailed plans and a razor-thin track record.

In an age of information and image overload, and five-second attention spans, do we hear what we want to hear? Do we hear what they want us to hear? Do we ever hear what we really need to know?

The power of the message and the manipulation of public attitudes has long been the science of political and corporate strategists, advertisers and ad agencies, and PR firms. The pushback from the press and advocacy groups has been freedom of information and the right to know--if you can find it. Even activist investors play an important role in digging up the buried facts.

With the proliferation of news and information, and deeper immediate access to records, it should be easier than ever to identify the truth from all the hype and chatter. Instead, we latch on to one simple thought skillfully relayed without taking the time to verify it. The truth becomes the carefully fashioned message, or what executives choose to telegraph. Most corporate chiefs do their best to walk the fine line.

In his comments at two conferences last week, Time Warner CEO Jeff Bewkes conceded the company "may have overpaid" for U.K. social Web site Bebo to replace the community AOL has lost in its transition to free access. Moreover, having invented social media, AOL should now be dominating it. It was refreshing and easy. Then Bewkes said Time Warner is not actively shopping AOL--seen as damaged goods for years--but would be open to considering "the right offer." It was reported as news--although it is the same stance Bewkes and his predecessor, Time Warner chairman Dick Parsons, have maintained for years. What's he supposed to say?

The churn of old news and speculation recast daily as new information and predictions can be wearing. The "gotcha" moments, true revelations and rehash--whether the product of corporations, the media or creative bloggers--become a massive blur that generally resembles what we already know. We all have a responsibility to assure that truth doesn't become a victim of the Web's endless spin-cycle or the masterful manipulation of those who prefer not to talk about it.