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Mark Zuckerberg’s Fake News Fight

Facebook’s Mark Zuckerberg on Friday night posted a message on his Facebook page about so-called fake news and the controversy over his company’s role in carrying it to hundreds of millions of users. “The bottom line is: We take misinformation seriously,” he said. Immediately adjacent to his post when I checked it, at the top of the “Sponsored” column, was a photo of Clint Eastwood and the the headline “Clint Eastwood gone at 84 – ‘In loving memory’ messages pour in from fans around the world,” plus a link to a website with the word “news” in its name. The news was, of course, entirely fake. Clint is fine.

Zuckerberg is in an impossible spot. Since the election he has been under attack based on conjecture that made-up information presented as news, mostly pro-Trump, and circulated on Facebook may have tipped the election’s outcome. This is like blaming AT&T and Verizon for the lies people tell on the phone, but of course it’s also different. Everything on Facebook runs through Facebook servers and can be analyzed by the company, which is critical to its pitch to advertisers that they can target their ads, within limits, based on users’ interests and histories. So why can’t it stop phony news?

The answer is that the task is impossible. What is news, and what is a news organization, as distinct from what any random human chooses to say on his or her Facebook page? Any of Facebook’s billion-plus users worldwide can set up a page with a plausible-sounding newsy name and start writing any nonsense they like in a journalistic style, and any other user can like it, and then anything can happen. A New York Times case study explains how a completely false report on anti-Trump protests in Austin, Texas, by a man with about 40 Twitter followers was shared more than 350,000 times on Facebook.

No organization could possibly monitor and confirm all such reports, as Zuckerberg realizes. “We do not want to be arbiters of truth ourselves,” he said in his post, “but instead rely on our community and trusted third parties.” He shouldn’t have to worry about this at all – getting in the middle of what his users say to each other is arguably the opposite of his proper role – but he’s confronting the reality that he must take some kind of action. He will likely make several changes enabling users to report false information more easily, perhaps inviting third parties to add warnings to stories that appear suspect, blocking ad revenue to repeat offenders, and other actions.

Regardless of what Zuckerberg does, business leaders must prepare for being victimized by fake news. It’s happening already. A headline at a news site called TruthFeed recently quoted PepsiCo CEO Indra Nooyi as telling Trump supporters to “take their business elsewhere.” Trump supporters called for a boycott, the stock fell – but the quote was fabricated. She never said it.

The words “media” and “news” have taken on strange new meanings, and we all, like Zuckerberg, have to figure out the implications for ourselves.


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What We’re Reading Today

Wells Fargo hit with new oversight
The Office of the Comptroller of the Currency said it’s revoking the portion of a $185-million settlement with Tim Sloan‘s Wells Fargo saying the OCC wouldn’t increase oversight of the bank. Well Fargo Bank, whose board is separate from the parent company’s, must now give written notice when replacing executives and board members and will no longer receive expedited reviews of proposed new bank branches. These are typical restrictions for troubled banks. Los Angeles Times

Honda to stick with North American plans for now
CEO Takahiro Hachigo says that the company won’t change its North American development and production arrangement, which includes two plants in Mexico, until president-elect Donald Trump takes office. Hachigo will wait to see whether Trump exits or renegotiates Nafta, as he promised in the campaign. Reuters

Impact of Facebook removing fake news
CEO Mark Zuckerberg on Friday outlined potential responses to the spread of fake news on the social site. Any action poses risks to Facebook; removing stories could reduce interactions and drive users away, and the company could be criticized as a media organization trying to shape what users think. Fortune

Donald Trump meets with Indian business partners
In the midst of choosing key appointees, president-elect Trump met last week with three Indian business partners. Trump’s team called the meeting a courtesy call. Sagar Chordia, Atul Chordia, and Kalpesh Mehta have discussed expanding their real estate partnership with the Trump organization, raising questions about how Trump will separate his business dealing from the presidency.  CNBC

Building Better Leaders

Understanding your business credit score
Fewer than one-third of small businesses don’t have an account tied to a line of credit, and 72% don’t know their business credit score.  Entrepreneur

How to send a cold email…
…seeking advice. Whatever you do, don’t ask, “can I pick your brain?”  Fortune

How do you know when it’s time to disrupt the business?
Do it when times are good. Once growth slows or stagnates, it may be too late.  Harvard Business Review

Transition Update

Romney considered for Secretary of State
VP-elect Mike Pence said yesterday that Mitt Romney “is under active and serious consideration” for the post. Romney called Trump “a con man” and “a fraud” during the campaign. WSJ

Wilbur Ross potential Commerce pick
The billionaire distressed-debt investor met with Trump on Sunday. Ross has spoken about reviving damaged companies, particularly in the steel and coal industries, which Trump promised to rebuild.  CNNMoney

A Muslim registry isn’t ruled out
Trump‘s chief of staff designate, Reince Priebus, said the team hasn’t ruled out a Muslim registry but isn’t discussing it. Trump has cited Japanese internment camps during World War II as precedent. Fortune

Fortune Reads and Videos

Walmart will offer Cyber Week deals…
…the moment Black Friday begins. It’s an effort to build sales momentum while countering Amazon. Fortune

Self-driving cars set to hit Boston
The startup nuTonomy has permission to test its vehicles on a few roads before year-end. Fortune

IRS wants all records of those in the U.S. who bought bitcoins…
…from the Coinbase exchange between 2013 and 2015. It suspects tax evasion.   Fortune

In first interview outside Brietbart, Trump adviser Steve Bannon…
…says he isn’t a “white nationalist” but is an “economic nationalist.” He also told the Hollywood Reporter, “Dick Cheney. Darth Vader. Satan. That’s power.”   Fortune

Happy Birthday

George Zimmer, founder and former CEO of Men’s Wearhouse, turns 68 today.  Mercury News

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