Commentary

Dell Dismisses Lawsuit Story As 'Old News'

Here in Austin, it's always a big deal when Dell Inc. makes national news. But a story in today's New York Times made news in a big, unwanted way for the company.

Piecing together just-released details from a lawsuit against the company, the article details troubles Dell had with OptiPlex computers the company sold to business and education customers from 2003 to 2005. Sales reps, the story says, were told to play down problems with the machines, which suffered from faulty capacitors that could leak, and which could pose a fire danger.

Over the last few years, Dell has been slowly trying to rebuild its reputation with more thoughtfully designed, well-reviewed new products, a stronger emphasis on support and corporate services and more aggressive marketing. That's why this story in particular, a reminder of Dell's downward slide in the mid-2000s, has got to sting.

Surprisingly, Dell said in a statement (as reported by the Austin American-Statesman) that the lawsuit is "Old news" and won't affect its current business. That's a hard argument to buy given that these lawsuit details were just released. As for whether it will or won't affect Dell today, the story already seems to have affected Dell's stock price and you can't really put a dollar figure on bad buzz or loss of reputation caused by negative publicity.

A story like this has the potential to spread and affect everything that is working around it.

Kind of like a leaky capacitor.

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