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Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Results matching “Facebook”



What do you get if you ask 600 tech industry news readers to rank the top tech scandals of 2017? You get a very long infographic!

Here’s the nutshell details of the survey courtesy of Brionna Lewis at  Instamotor, an online used car market:

Top Five Tech Scandals of 2017

  1. Facebook, Twitter and Google testify about Russian meddling in the 2016 election
  2. Equifax announces data breach
  3. Uber admits to 2016 data breach and hacker bribing
  4. Google engineer sends sexist memo
  5. Female engineer unveils sexist culture at Uber

Instamotor found a large amount of goodwill towards the scandal ridden companies:

Facebook: 3 in 5 respondents (60%) say Facebook is at least “somewhat trustworthy”, with nearly 1 in 5 (19%) ranking them as “very trustworthy”

Uber: More than half (51%) of respondents say Uber is at least “somewhat” trustworthy, with 12% ranking them at “very trustworthy”

Equifax: More than 2 in 5 (42%) say Equifax is at least “somewhat” trustworthy, with nearly 1 in 5 (19%) ranking them as “very trustworthy”

Here is the timeline of the scandals as an infographic:


The media industry continues to be disrupted and former high flying new media companies are being hit as revenues from advertising continue to fall despite increased readership.

Monika Bauerlein, CEO of Mother Jones magazine lists some the recent troubles:

Buzzfeed, the big media success story of the past decade, projects missing its earnings targets by some 20 percent.  CNN faces shortfalls, despite its incredible scoops and a political climate that’s had all of us glued to the headlines.  Mashable, another investor darling, announced its sale for about a fifth of its valuation just two years ago.  The Daily Beast, owned by the same parent company as Tinder, is looking at a sale, and    Univision is on the hunt for someone to take a piece of the former Gawker sites.  Alternative weeklies are on life support and Conde Nast is making cuts. 

Journalism Is Imploding Just When We Need It Most – Mother Jones

Bauerlein writes:

Some blame the Google and Facebook algorithms (could real news getting caught up in the fight against the fake stuff?). Others speculate that readers and viewers are simply tiring of the 24/7 onslaught of crazy.

Her strategy for magazine survival is to build trust with readers through important investigative journalism projects in the hope they will donate money.

I hope you’ll consider joining (or re-joining) the community of some 50,000 MoJo donors with a tax-deductible gift here

Foremski’s Take: 

Asking for money seems to work for a specialist magazine such as Mother Jones which has never had to completely rely on advertising. But asking for handouts is not a sustainable business model -- it can only work for a very small number of publications.

We need something viable, scalable and available to all.

The darlings of the new media sector such as Buzzfeed, Gawker, and Mashable attained massive amounts of traffic yet even they were unable to run fast enough to stem the race to the bottom on declining advertising revenues.

Google is also racing to the bottom. Every quarter it reports less money per click than the same period in the prior year. In it's most recent quarter it reported 18% less -- a larger than expected decline. But it beat Wall Street estimates because it found more places to show more ads.

Traditional and new media companies cannot match the scale and the low costs of the platform-based media companies. They have additional advantages such as avoiding the label of a media company and thus able to shun the costs of maintaining community standards in regards to hate speech and fake news.

Google and Facebook can survive the race to the bottom for much longer than the media companies that rely on people rather than software to create content. But they are media companies run by engineers and they don't understand the economics of the business and their effect on the industry.

Unequal relationship...

Google and Facebook need news content but they take too much of its value and return too little. Media companies complain that the traffic is of poor quality and hard to monetize.

For example, Mother Jones spent $350,000 on an investigative series that was tremendously popular online but was only able to recoup $5,000 in online advertising revenues.

Media beggars...

Billionaires such as Jeff Bezos and Warren Hellman have stepped in to try and help out the media industry, and Patreon collects donations for worthy media ventures.

But begging is not a business. Handouts cannot scale and they mask a very serious problem that is not addressed -- the continuing instability in the media business model.

We need innovation in the media business model so that it rewards quality journalism with reasonable profit margins that enable reinvestment, growth and vigorous competition. We do not have this or anything like this. And there's nothing on the horizon.

Garbage collection...

This is an incredibly serious problem because without a trusted and healthy media sector we cannot make the right decisions to govern ourselves and lead our future.

Garbage in -- garbage out.

- - -

Please see: Fake news problem: Facebook is a media company run by engineers

$GOOG Analysis: Google's rapidly narrowing future

Journalism+Silicon Valley: What Balance Of Power?

No good news for media industry in Internet Trends report

Analysis: Facebook's 3,000 editors...Is it still a tech platform?



During the recent hearings in Washington representatives of Facebook, Google and Twitter were asked if they were media companies-- they replied that they identify as technology companies.

Facebook and Google don't want to be classed as media companies because then they have to pay for the responsibilities of being media companies.

But these are rich companies and they can afford the extra costs of employing editorial staff. It would create a little bit of a level playing field with traditional media companies who have to carry the costs of civil responsibility.

Apart from expensive regulatory issues Facebook faces another problem: it’s a media company run by engineers.

This is why it has trouble dealing with media problems such as fake news. It doesn't have any media professionals that understand the issue and know what to do about it -- and have the seniority to execute. Facebook employs former journalists and editors but they were not hired to deal with fake news.

Engineering fake news...

The Pew Research Center recently surveyed 1,000 technologists about the problem of fake news and 51 percent said nothing can be done while 49 percent said the opposite. Which means these "tech experts" don't really know one way or the other.

Why not ask media professionals? It's a media problem not an engineering problem. After all, you wouldn't ask reporters about Javascript's scalability in web projects.

Facebook is a media company that doesn't know how to be a media company.

But it can learn. And it doesn't have to learn the hard way by making business mistakes that the media industry solved many decades ago.

There's several things that can be done very quickly that would go a long way to curbing fake news at Facebook, Google and elsewhere.

Engineers know how to code but media professionals know how to code the culture and spot the fakes. Media engineers will one day be a hot new profession.

- - -

Please see: Analysis: Facebook's 3,000 editors...Is it still a tech platform?

No good news for media industry in Internet Trends report

Media company or tech platform? The hugely important battle to redefine Facebook

Journalism+Silicon Valley: What Balance Of Power?



Facebook (and Google) is finding it harder and harder to avoid being seen as a media company. I’ve called Facebook, Google, Yahoo and many others — high-tech enabled media companies for more than a decade. I’m glad others are seeing that: publishing pages of content with advertising around it is a media company. 

This video interview with Scott Galloway, marketing professor at NYU, underlies this issue of is Facebook a media company? If it were classed as a media company it would create a little bit of a level playing field with traditional media because it would have to hire a lot of humans and its costs would rise dramatically. If Facebook loses its platform status you can bet it will make sure Google does as well.

Scott Galloway, a marketing professor at NYU and author of the new book "The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google," discusses Facebook.

He says the company has embraced many aspects of a media company, but seems allergic to many of the associated responsibilities. He worries that the youthful management at Facebook doesn't have the historical context for the importance media plays in our society, citing Russia's manipulation of it during the 2016 presidential election. He doesn't buy the excuse that Facebook can't possibly screen its advertisers, and says they don't want to do it because it would hurt their profitability.

Scott Galloway says Facebook could screen its advertisers if it wanted - Business Insider



Acquired 56

Europe’s Brexit problem could be to blame…

There's a big slowdown in dealmaking in the global Technology, Media &Telecommunications (TTM) sector with the value dropping by $92 billion or nearly a quarter during the first nine months of this year reports Mergermarket.

There have been $299.5bn of deals compared with $391.1bn during the year ago period. The number of deals: 2,370 held steady.

The US has the largest market share at 43% of global deal value with 892 transactions worth $127.9bn including the largest deal of the year so far: The $14.4bn acquisition of Scripps By Discovery Communications.

Europe reported 813 deals valued at $47bn and is likely to end the year at a record low market share due to uncertainty from Brexit.

Elizabeth Lim, senior analyst at Mergermarket singled out Japanese giant Softbank in a "buying frenzy" acquiring a wide range of companies in AI, chips, and robotics. Softbank has acquired 26 companies so far this year — three times last year's investments.

She included a quote from Masayoshi Son, CEO of SoftBank:

"Every industry that mankind created will be redefined. The medical industry, automobile industry, the information industry of course. Every industry that mankind ever defined and created, even agriculture, will be redefined."

The top three deals in the global TTM sector for the first nine months of 2017:

  1. $14.4bn Discovery Communications acquiring Scripps Networks Interactive.
  2. $12.7bn Idea Cellular acquiring Vodafone India
  3. $10.6bn Bain Capital consortium acquiring Toshiba Memory stake.

Mergermarket report.

Foremski’s Take: Fewer big deals means bad news for Wall Street bankers but small deals are good news for Silicon Valley’s startups because it means exits for the investors. And capital comes back to go around again.  

Fewer big deals could signify something else: there are few large target companies left that are worth acquiring. And will there be others to take their place? Startups are rarely able to grow larger than 100 people before being acquired.

Digital vulnerability…

There’s another trend at work with a longer horizon: The tech industry is becoming the media industry as an example of how the transformation of all business into digital businesses means every industry is vulnerable to high tech large scale business platforms such as Google, Facebook, Amazon and maybe Apple. 

If you are a top competitor in the bricks and mortar world,  you would have to build stores and warehouses and expand into new geographies — scaling takes years. In the digital world — if you are the better competitor — business scaling takes just days. And scale always wins. 

The global digital transformation that is underway — of all businesses across all industries — leaves every company vulnerable to disruption from highly efficient business tech platforms. Take a look at the digitization of the media industry. It will be repeated in other industries.  Deal flow value will shrink again.



Internet trends 2017 report 15 638

There's no good news for media companies in the latest Internet Trends report from VC firm Kleiner Perkins Caufield & Byers as Google and Facebook share an astounding 85% of all new Internet advertising.

Last year it was 74% — an acceleration that demonstrates the competitive advantage of scale these companies have in the media sector or as Mary Meeker the report's author succinctly writes: "Big Get Bigger & Go After Other Bigs."

Meeker is a partner at KPCB, one of the first VC firms in Silicon Valley's famed Sand Hill Rd. She was a popular Wall Street analyst during the dotcom boom.

Here are some of the very bad Internet trends for those media companies that are not Google or Facebook:



Timothy Lee at Vox reports:

Facebook is hiring 3,000 people to stop users from broadcasting murder and rape

Facebook has faced a string of incidents where users have filmed shocking events — like rape and murder — and uploaded them to the site. Critics argued the company wasn’t doing enough to address the problem.

Today, Facebook CEO Mark Zuckerberg took action to address those complaints, announcing that the company was going to hire 3,000 people — on top of the 4,500 staff it already had — to help it respond more quickly to reports of abusive behavior in the platform.

 

Facebook, Google, Youtube,  and Twitter define themselves as platform companies and not as media companies for a very important reason: as a media technology platform they are not legally responsible for publishing content posted by users as long as there are mechanisms to flag and remove the content.



Workplace 02444

We are in an era of “Hyperscale companies” such as Amazon, Facebook, Google, Microsoft and Apple that limit opportunities for startups warns Sam Altman, head of Y Combinator,  Silicon Valley’s influential investment group, accelerator and educator. 

The warning was part of a long 2017 YC Annual Letter:

Altman wrote: “We’re now in the era of hyperscale technology companies…
Companies like Amazon, Facebook, Google, Apple, and Microsoft have powerful advantages.”

“I expect that they will continue to do a lot of things well, have significant data and computation advantages, be able to attract a large percentage of the most talented engineers, and aggressively buy companies that get off to promising starts."

This situation “is unlikely to reverse without antitrust action.” 



SummerLove

 The California Historical Society has opened a Summer of Love photo exhibit and is collecting people’s stories about this very important cultural event.

To riff on the famous call to action voiced by Timothy Leary at the Human Be-In "turn on, tune in, drop out", we invite you to "log on, tune in, and join us" in this journey. If you have something to share—your first hand experience of the Summer of Love, an event you are planning, a book or article you are writing, or your memories of the era— or if you are interested in supporting this effort, please contact us.

It’s not just in technology that this small little place in the world leads the world. 

Here’s more information from Anthea Hartig, Head of the California Historical Society:



Newsroomlayoffs

The Fake News epidemic is a direct result of our continued failure to create a stable business model around professional news media. We seem to have forgotten that the news media sector continues to be in turmoil.

Take a look at a few of the headlines above from last year. And in just the first few days of 2017:

- Medium — one of the most popular online publishing sites says it will cut 50 jobs and change to an unspecified business model. Medium was founded by Ev Williams, founder of Blogger, co-founder of Twitter.

It doesn't pay for much of its content yet this digital-first social media savvy media company is struggling. All media companies are in the disruptive path - not just digital.

Ev Williams wrote:



FacebookCampus 1740

Every day Facebook publishes millions of pages of content with advertising - what's "not a media company" about that?

Yet Facebook founder and CEO Mark Zuckerberg has lately been determined to identify Facebook as a tech company who's engineers are on a global mission of simply trying to connect people with each other.

Reuter's Giulia Segreti reported on Zuckerberg's recent comments in Rome, where he visited the Pope.



Uncertain 2

Journalism’s uncertain future

This book looks interesting- Journalism’s Lost Generation: The Un-Doing of U.S. Newspaper Newsrooms by Scott Reinardy, a journalism professor at the University of Kansas.

Deron Lee at CJR, writes

When Scott Reinardy began studying the state of morale in newspaper newsrooms more than 10 years ago...He didn’t know the industry was about to enter a traumatic period of upheaval that would deplete the ranks of journalists around the country and force newspapers to reassess their mission...in that tumultuous decade.

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