NEW YORK (Reuters) - A false Internet report that Apple Inc’s Steve Jobs had suffered a heart attack briefly slammed his company’s stock on Friday and raised fresh questions about the delicate relationship between traditional and new media.

Apple Inc CEO Steve Jobs speaks at Apple's "Let's Rock" media event in San Francisco, California September 9, 2008. REUTERS/Robert Galbraith

The posting on iReport.com -- a citizen journalist site owned by Time Warner Inc’s CNN -- is the most recent incident in which a faulty online report created brief, but wrenching, confusion among investors.

Apple quickly denied the report about its chief executive, but not before its stock dropped more than 2 percent, hitting a 17-month low of $94.65. It later recovered, climbing as much as 4 percent, before closing at $97.07, down 3.03 percent for the day.

The report claimed Jobs was rushed to the emergency room after suffering “a major heart attack.” CNN later removed the posting from iReport.com and disabled the user’s account.

“iReport.com is an entirely user-generated site where the content is determined by the community,” CNN said in a statement. “Content that does not comply with Community Guidelines will be removed. After the content in question was uploaded to iReport.com, the community brought it to our attention.”

A spokeswoman added that CNN attempted to reach the user -- based on information that was provided at registration -- but was unsuccessful. The iReport.com site carries a disclaimer stating: “CNN makes no guarantees about the content or the coverage on iReport.com.”

The incident highlights the risks involved with mainstream media organizations tapping into what is often referred to as “citizen journalism,” the unedited and unfiltered presentation of news by non-professional reporters such as bloggers and eyewitnesses to events. Reuters is among those that have undertaken efforts in the area of citizen journalism.

While more news outlets are welcoming contributions from their audience, so far there has been little agreement about standards, and they often rely on trust. To be sure, mainstream media has reported its share of incorrect news, and media experts said that it would be unfair to tarnish a vibrant movement in journalism based on one high-profile incident.

“Are we going to let one bad apple besmirch the entire orchard? That’s ludicrous,” said media consultant and Buzzmachine.com blogger Jeff Jarvis.

The report comes about a month after Jobs, who is often perceived as irreplaceable as Apple’s leader, appeared thin, but jaunty as he introduced new iPod digital music players.

He walked on a stage in front of a screen that flashed “The reports of my death are greatly exaggerated” -- a quotation borrowed from Mark Twain.

Before that event, investors had been concerned about the cancer survivor’s health after he appeared thin at another product launch in June. In 2004, Jobs, 53, said he had undergone successful surgery to remove a rare type of pancreatic cancer.

Volatile trading in Apple’s shares on Friday may also have been influenced by Barclays Capital’s report that it slashed its price target on Apple to $135 a share from $180.

Jimmy Wales, founder of the user-edited encyclopedia Wikipedia that has emerged as the biggest reference site on the Web, said community-editing helps catch the vast majority of errors or outright falsehoods on such sites.

“Within the community people know each other and they know when to trust each other,” Wales told Reuters. “Occasionally there are errors that slip through and make headlines.”

“The paradox is that it is hard for CNN to move into citizen journalism because the errors are much more believable if it is from CNN than it would be from just any citizen journalist site,” Wales said.

Last month, a nearly 6-year-old news story on the 2002 bankruptcy filing of UAL Corp resurfaced on the Internet, briefly crushing the airline’s shares.