Social networks encroaching on news organizations’ turf took another turn this week when Facebook announced its latest effort — hiring a squad of editors to select stories.
Whether this helps the largest social network redeem itself after past gaffes in its effort to deliver news remains to be seen. At the same time, it shows how the value of news stories in keeping users on a website, as Apple, Google and Twitter also build out reporting operations.
Facebook’s initiative calls for hiring a group of no more than 10 full-time experienced journalists who will choose articles and other material for News Tab, which the company will test in October.
Facebook has relied on contractors and algorithms to select stories, which has caused it no end of headaches. It has suffered withering criticism for bias in its articles selection after a 2016 Gizmodo story said that a team of independent contractors that Facebook had hired were quashing stories from conservative news organizations and about Facebook itself.
Facebook sees itself as a major news provider, and after the bias debacle and other issues involving its use of news and information, it announced last year that it would prioritize news from “trusted sources.”
But it has also had a tempestuous relationship with news outlets from which it gathers material and regulators who have looked with increasing intensity at the company’s influence on public discourse. The company’s evolving approach to its news operations has also reflected internal turmoil about this part of its business.
An Offer to License Content?
Recently, according to The Wall Street Journal Thursday, Facebook offered to pay licensing fees of as much as $3 million to ABC News, The Washington Post, Bloomberg News, and The Wall Street Journal’s corporate parent, News Corp.’s Dow Jones, for access to headlines and article previews. The initiative represented an about-face for Facebook founder Mark Zuckerberg, who has long resisted pressure from publishers to pay for content.
Facebook couldn’t be reached for comment.
It wasn’t clear at the time of publication how many companies will accept Facebook offer. But Facebook faces strong competition as a news source.
Apple, Twitter and Google, among others have been building their news operations. They see news as a way to generate more advertising, which provides the companies’ most important revenue stream. Facebook and Google account for about half of all online advertising spending.
Meanwhile, traditional news organizations have been more receptive about working with social media sites. News Corp Chief Executive Robert Thomson recently announced partnerships with Apple and Twitter, which “recognize the value of our content,” and that the company was holding talks with others.
“What I can say is that the terms of trade and the tenor of our talks are now vastly different to even a year ago,” Thomson said.
Social media companies have drawn increasing regulatory scrutiny, something that Facebook would like to minimize. The company has already received a $5 billion fine from the FTC tied to the Cambridge Analytica scandal in which it shared users’ data without authorization.
Waves of Disruption
But Zuckerberg has acknowledged that Facebook must improve its procedures for gathering and distributing news.
The tech giants use original content, including product guides and news articles, to attract and engage audiences. In turn, they hope that this leads readers to make purchases via their sites.
Social media’s growing role as a primary news outlet is part of a dynamic shift that has created new challenges for media organizations. According to media analyst Gordon Borrell of Borrell Associates, publishers have weathered three waves of disruptors in recent years.
“The first wave was Google, which hurt the classifieds and directory businesses, mostly,” he wrote Karma in an email. “The second wave was Facebook, which hit radio and perhaps direct mail and other print advertising channels.
Borrell predicts that Amazon’s emergence will create a “third big wave.”
“I’m hearing a few forecasters pegging them at $38 billion in ad revenue in a few short years, which would put them roughly where Facebook is right now,” he said.
Amazon launched an invitation-only program called Onsite Associates that includes product guides by outside publishers. If a user adds a guide’s listed product to their cart, publishers receive a commission. According to Digiday, some publishers are earning six-figure checks, while others are seeing minimum windfalls.
According to eMarketer, Amazon’s advertising revenue is expected to hit $3.92 billion in 2019, a53% increase from last year. That is coming at the expense of Facebook and Google. A 2018 eMarketer survey found that that nearly 50% of U.S. internet users started product searches on Amazon while only 34.6% started product searches on Google. Amazon has a treasure trove of information about consumer buying habits.