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September 16, 1998

YAHOO ACTS TO PREVENT RE-REGISTERING

By CBR Staff Writer

New registration procedures on Yahoo! Finance have been put in place to make it more difficult for subscribers whose permissions have been revoked to re-register under another name. Yahoo! Finance has drawn fire over the last few months for its involvement in several instances of apparent stock price manipulation, including Philip Service Corp (CI No 3,451), AgriBioTech Inc (CI No 3,484) and Network Associates Inc (CI No 3,493). In some cases the injured companies have asked Yahoo to divulge the identities of anonymous posters to the message boards, a move that has alarmed privacy activists. Short sellers, who make money when stock goes down, have been accused of posting unsubstantiated rumors about companies and management in order to encourage stockholders to sell their shares. Mike Riley, the producer of Yahoo! Finance, says Yahoo has not taken any measures specifically to combat short sellers. Our message boards are an unmoderated public forum and we don’t make any efforts to regulate what people are talking about, he says. If published material violates Yahoo’s terms and conditions of use, the company reserves the right to remove it – but Yahoo declines even to guarantee that it will exercise that right. When it comes to readers acting on the information they find posted on the boards, Riley says it’s a case of caveat emptor. I can’t comment on specific cases but some degree of responsibility falls on the shoulders of the person who is reading the posting, he says. Because the US Judiciary has come out fairly strongly in defense of the First Amendment on the internet, Riley does not believe that the message boards place Yahoo at risk of prosecution. Besides, he says: It’s not always clear to me that a message board posting is responsible for moving the stock, and not the other way around. Even so, from now on Yahoo will be confirming registration by email before anyone can post to the boards. There were a few people who would re-register after we had revoked their posting privileges, Riley says. There are a small number of people who are just malicious.

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