How a fake press release made everyone think Google was buying ICOA

If you were flitting around a few tech blogs yesterday, you may have read a story about Google’s planned acquisition of a wireless network provider called ICOA. The articles were based on a press release from a service called PRWeb, which said that Google would be shelling out some US$400-million for the service, which provides public areas in the US with wireless hotspots, in a bid to “further diversify its already impressive portfolio of companies”.

The thing is, the press release wasn’t true.

After the initial articles were published by a number of sites, sources from both Google and ICOA confirmed to AllThingsD and TechCrunch respectively that no one was being bought or sold… but not before ICOA’s (very low) shareprice spiked.

Vocus, which runs PRWeb, later removed the post from its website, and sent out a statement confirming that it was a fraudulent release “not issued or authorized by ICOA”:

Vocus reviews all press releases and follows an internal process designed to maintain the integrity of the releases we send out every day. Even with reasonable safeguards identity theft occurs, on occasion, across all of the major wire services. We have removed the fraudulent release and turned the matter over to the proper authorities for further investigation.

While it’s still not clear exactly who issued the release, it seems to have been part of a plan to temporarily raise ICOA’s share price and profit from the boost — the group is not listed on any of the major stock exchanges, but rather on an over the counter (OTC) market, where it trades for fractions of a dollar per share. According to Yahoo Finance figures, the company’s market cap is around US$848 340 — nowhere close to the hundreds of millions Google was supposed to pay for it.

Speaking to TechCrunch, the company’s CEO, George Strouthopoulos, said that he thought “a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles.”

The way in which the (inaccurate) news spread so rapidly has also called into question the reliability of not only the sites who ran the story, but also PR services in general, which handle thousands of releases per day, making it difficult to verify all the posts. While press services are generally viewed as a reliable source, some have already pointed out that they are essentially an information-churning business: services like PRWeb offer to push releases to search engines and major publications for a fee, and the releases are often published by a range of sites with very little editing or additional information.

Image: Raúl Ochoa