The Wall Street Journal (article behind paid firewall) covers the latest company crisis started on social media. At CIC, we call this Crisis 2.0 (crisis starts on blog/BBS, and then is picked up by mainstream media). This is the first of 2007, but the article gives a quick summary of some of the bigger ones in 2006:

Starbucks is the latest example of a personal beef escalating into a national issue. This past April, Yum Brands Inc.'s KFC had to reshoot and replace an ad that bloggers complained insulted students. In June, outrage among bloggers led to a class-action lawsuit against Dell Inc. after the company inserted the wrong processors in laptops. (That lawsuit was thrown out by a court in December.) And in September, Procter & Gamble Co. faced an online uproar over its handling of concerns about trace metals in its brand of SK-II cosmetics. Public anger in that case was motivated less by worries over product safety than by P&G's decision not to apologize to customers and make speedy refunds.

For more on the Dell case, see here.
More on Dell and KFC in our sample CIC watch here (PDF).

My quote in the article is here:

The best strategy is to monitor for these crises, to catch them early before they get so big," says Sam Flemming, the CEO of Shanghai consultancy CIC data LLC, which works for Pepsi and Nike Inc. "And then you should react quickly. Consumers feel like they should be listened to. If they feel like they're being ignored, it makes things even worse.

I don't think my full meaning is made clear here. Definitely, companies should be tracking, but it is not necessarily true they need to always react. Not every complaint online is a crisis. And, as others say in the article, if you do react, HOW to react is key. Posting a response on a blog or in a forum can lead to even more problems.

In the case of Starbucks, it is important to remember that the "crisis" is now a "mainstream" crisis, not just one sitting in social media. Decisions on how to react should be made based on a full understanding from a PR perspective (and sometimes legal), not just an online perspective, and in this age of Crisis 2.0, decisions should be made fast. This is another reason why PR firms need to "get" social media. If they don't, the social media is going to "get" them.

By the way, the article mentions the term for such crisis', based on Watergate.

Here are some examples from our sample CIC watch report: