Financial Data at Corporate Web Sites: Does User Sophistication Matter?

This study investigates companies' decisions to disseminate financial information at their corporate Internet Web sites. We expect that companies tailor the selection of data items presented at their sites to the relative sophistication of their user base. Based on prior literature, we predict which financial information items are likely to be preferred by analysts, proxying for sophisticated users, or by retail investors, who are generally less sophisticated users. Consistent with our hypotheses, the results suggest that the information provided at Web sites varies systematically with companies' levels of analyst following and retail ownership. Higher levels of analyst following are associated with relatively objective, more extensive data, and higher levels of retail ownership are associated with relatively subjective, more abbreviated information.