IphonescandalI’m sure you’ve heard at least something about the recent happenings over at Engadget with the phony iPhone email? It’s been plastered all over the blogosphere, and for good reason.  We had decided not to write about it, but after reading more commentary around the web, we decided we would.

I’ll catch you up to speed in just a minute in case you haven’t heard about it, but I decided to write about this event simply for that fact that on Wednesday, everybody saw first hand just how extremely powerful a blog can be, and a few lessons were learned.

In a nutshell, on Wednesday, Engadget (a popular gadget blog) received news from a trusted source who they know works at Apple, saying that they received an internal memo from Apple corporate stating that the iPhone and the next OS X have been considerably delayed.  It looked just as any other internal Memo would in format, and there was no reason for the handful of Apple employees who received the memo to doubt its accuracy. 

Engadget tried to contact Apple PR for comment and to confirm, but got no immediate response, so they posted the news. Within six minutes Apple stock plunged, and went from $107.89 to $103.42. The result? $4 billion was erased from Apple’s market capitalization for a short period of time.

Apple finally responded and said that the email that came from their internal system was in fact a hoax, and Engadget quickly posted that it wasn’t true.  Apple stock recovered, and the blogosphere has gone crazy over it since then.

Engadget has received a lot of heat for all of this, and posted yesterday explaining in further detail what happened because many people lost trust in their reporting skills.

What came out of all of this was proof that blogs do have power, more than anybody probably ever thought or expected. One post by Engadget cost many people a lot of money in a very short period of time. And it’s a good thing Apple responded to Engadget which is another lesson for big companies out there – they need to be sure to respond to blogs because the companies can undoubtedly be impacted by what they say.

I also thought it was interesting that people were hinting that Engadget employees were involved in a stock scandal with this, except that Engadget noted yesterday that no one at Engadget is allowed to own stock in the companies that they write about.

I’m also wondering who it was that sent out the email, and why. Was it a disgruntled employee who was headed out anyways and wanted to make one final ripple in the water?

It was a big week of lessons learned in the blogosphere. I don’t think any company will ever underestimate the power of blogs, because they move information quick, and it spreads fast. And I don’t think bloggers, particularly those who know they hold a lot of influence, will take reporting on big issues lightly. It’s not just a small buzz around the web that they’re capable of starting these days, it’s a big whirlwind that grows almost instantly and can cause damage.

Update:Apple is now saying that the email did not come internally, it was just made to look like an internal email.