The media industry is on some pretty shaky ground these days, with advertising revenue and readers both disappearing faster than an ice cream cone on a July afternoon. And whenever Facebook moves the levers of its news feed algorithm, you can almost hear that shaky ground shifting underneath almost every news outlet, since so many of them rely increasingly on Facebook for their livelihood.
In most cases there are two easy ways to tell when Facebook makes a meaningful change to the algorithm: One is that media companies start to moan about how their traffic from the giant social network has been declining rapidly for no apparent reason. And the other is that Facebook writes a blog post trying to explain the changes in as diplomatic a tone as it can muster.
The complaints from media outlets have been coming for the past several months, with some reports of sudden traffic declines as high as 40% compared with last year. And on Wednesday we got the Facebook blog post—in fact, two of them. One, written by a senior product VP responsible for the news feed, was called “Building a Better News Feed,” and the second is called “News Feed FYI.”
There’s a lot of hemming and hawing about how Facebook doesn’t choose what kinds of information to show you, which of course is factually incorrect, and appears to be mostly a rhetorical dodge in order to get around accusations of favoring certain viewpoints in trending topics. What Facebook means is that the algorithm chooses what to show you—as though the algorithm was some kind of omniscient entity, and not a thing programmed by flawed human beings.
In any case, the main point of both posts is fairly obvious. Facebook wants more personal posts about friends and family, and therefore it is going to de-emphasize other types of posts—and by that, it mostly means the vast majority of what news organizations produce (including what Facebook pays them to produce). “Facebook was built on the idea of connecting people with their friends and family. That is still the driving principle of News Feed today,” one of the posts explains.
The upshot for news companies is the same as it has been almost every other time there has been an algorithm tweak. As the second blog post puts it—in the opaque and passive-aggressive language favored by the world’s largest social network—”We anticipate that this update may cause reach and referral traffic to decline for some Pages.” In other words, watch out below. But enjoy the dog photos!
Mathew Ingram is a senior writer at Fortune. Follow him on Twitter or reach him via email.
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BITS AND BYTES
Things look good for new U.S.-EU data privacy pact. After initial hesitancy, regulators seem poised to approve "Privacy Shield," which will govern how digital information is transferred between America and Europe—and how it is protected and used in both regions. The framework replaces the Safe Harbor pact, which was struck down last year for not going far enough to protect European citizens. We're still several weeks away from a final agreement. (New York Times)
SoftBank faces scrutiny over Nikesh Arora. The Securities and Exchange Commission is investigating potential conflicts of interest involving the company's former president, reports Bloomberg. SoftBank recently cleared Arora as part of an internal investigation brought after allegations made by an investor group. Arora resigned last week because SoftBank founder Masayoshi Son is sticking around longer than expected as CEO, the job that Arora was being groomed for. (Bloomberg)
San Francisco lawmaker wants tech companies to pay more taxes. City supervisor Eric Mar has proposed a 1.5% payroll levy, called the "Fair Share Measure" that he said would raise more than $120 million in new funds to help fund more affordable housing. The idea needs the support of at least six more supervisors to make it onto the November ballot. (Time)
Google Capital makes first investment in public company. Alphabet's growth-equity fund put $46.4 million into Care.com, a nine-year-old company that manages a national network of childcare and elder care providers. The infusion makes Google its largest single investor. (New York Times)
Satya Nadella will soon be a published author. The Microsoft CEO is working on his first book, titled Hit Refresh, which is due out in fall 2017. It's part memoir, part technology primer, part executive advice tome. (The Verge)
Wireless charging company seeks CEO. Thorstein Heins, a former CEO of BlackBerry, quit his most recent post as chief executive of Powermat Technologies, citing a hostile work environment. The startup is working on technology for juicing up gadgets without having to plug them into an electrical outlet. (Bloomberg)
Why no driverless trains? Tech firms and industrial designers are working on autonomous cars, trucks, and airplanes but we hear little talk about taking engineers out of locomotives. That doesn't sit right with freight-rail industry executives, who think the technology could help nagging safety concerns. (Bloomberg)
Google will buy even more wind power. It has arranged to buy the entire output of a 160-megawatt-capacity wind farm being built in Norway for at least 12 years. The value of this particular deal, its first in Europe, wasn't disclosed. But over the past several years, Google has invested more than $2 billion in various clean-energy projects. (Reuters)
THE DOWNLOAD
Why Zendesk CEO Mikkel Svane obsesses over customer service. Svane earned his title in 2007 because co-founders Morten Primdahl and Alexander Aghassipour were busy writing code for the trio's customer-service software startup. "We found happiness in doing something where we could each make a difference, have an impact, explore our own limits," he says.
Svane spoke with Fortune about what makes for a satisfying customer service interaction, how bots and virtual reality technologies will transform conversations, and why he thinks more businesses should let their agents abandon scripts that guide what they should and should not say. Here are excerpts of that conversation.
IN CASE YOU MISSED IT
Inside Kohl's plan to win the department store tech wars by Phil Wahba
Cisco and IBM's new partnership is a lot about talk by Jonathan Vanian
Why Wall Street wants your iPhone installment payments
by Aaron Pressman
Amazon adds seasoned finance exec to board by Leena Rao
Man claims he invented iPhone in 1992 and sues Apple for $10 billion
by Don Reisinger
Why Amazon's latest cloud storage option could fend off Google
by Barb Darrow
Box sweetens cloud pitch with service that helps move digital files
by Heather Clancy
Uber is starting to monitor drivers for bad behavior by Michal Addady
ONE MORE THING
350 million and counting. That's the number of "active" devices that are running Microsoft's latest operating system, Windows 10, as its one-year anniversary approaches. The software giant's goal is to surpass 1 billion within three years. (Bloomberg)
This edition of Data Sheet was curated by Heather Clancy.
