More news yesterday reminds us that Google CEO Larry Page and Facebook CEO Mark Zuckerberg are today’s press barons, though they don’t want to be. Business leaders need to erase and replace their long-established understanding of how the media work.
The latest sign is Facebook’s announcement yesterday that it is retooling its Trending section, which lists topics that are being widely discussed on the site and that Facebook algorithms figure would be of interest to each user. New algorithms will try to weed out topics that are based on just one news report – the better to eliminate “fake news.” The new algorithms will look instead for topics being covered by several media outlets, trying not to be misled if several outlets cover a fake-news outbreak because it’s fake news. The personalization feature will also be discontinued; every user in a given country will get the same list of Trending topics.
Facebook is clearly making the change because of controversy that arose after the election, when some people speculated (without reaching a conclusion) that fake news that was spread via Facebook’s vast reach might have influenced the outcome. Facebook really does not want to be – and cannot be – the fact checker of billions of posts, yet it could not fail to act in response to the controversy. The company last month announced a plan to encourage users to flag fake news and to discourage them from sharing disputed posts. Yesterday’s announcement was the next step, and more will likely follow.
The reality that all of us (including Facebook) must accept is that 44% of all U.S. adults get news from Facebook. So says Pew research, which is now a year old and probably understates the real number. No other media outlet comes near that figure. Facebook emphatically does not want to be considered a news media outlet, but if a plurality of U.S. adults get news there, then that’s what it is.
Google announced that it had evicted 200 publishers from its AdSense network in November and December, some of them for being fake news sites. Again, the motivation is clear. Google took heavy criticism post-election when its algorithms gave high placement to a fake news item claiming Donald Trump had won the popular vote. Like Facebook, Google hates the idea of being part of the news media; its Google News site amalgamates stories from other sources and is entirely algorithm-driven. But its massive audience – over a billion monthly active users as of a year ago – makes it a media titan, like it or not.
One more factor. As media audiences move steadily online, remember that Google and Facebook together accounted for 99% of all the growth in online advertising in last year’s third quarter. It’s a duopoly. How incumbent news media will finance themselves becomes murkier by the day.
How will the news business look in five years? I have no earthly idea. But that’s the world that all business leaders must try to envision.
You can share Power Sheet with friends and followers here.
What We’re Reading Today
J&J to buy Europe’s largest biotech company
The $30-billion deal for Jean-Paul Clozel‘s Actelion Pharmaceuticals gives Johnson & Johnson a larger stake in rare-disease treatments. The deal ends weeks of negotiations in which Alex Gorsky‘s J&J walked away from the deal, then returned to the bargaining table a week later. Actelion will spin off its drug-discovery operation into a standalone business. WSJ
De Blasio questioned by prosecutors
New York City Mayor Bill de Blasio confirmed that prosecutors from the Manhattan district attorney’s office questioned him about his fund raising for Democratic state senate candidates in 2014 and whether his operatives tried to circumvent contribution limits. NYT
National Parks oppose Trump on global warming
National Park Service employees tweeted facts about global warming on official park handles, a clear jab at President Trump, who is a climate change skeptic. Parks Service chief Tom Crosson said no gag order has been placed on its social media activity. A Badlands official park account had previously posted climate change figures, which officials erased, leading someone to create an AltUSNatParkService Twitter account. Fortune
Ban Ki-moon hints at South Korean presidential bid
The former UN Secretary General has criticized a likely candidate for president and says the election should be a “new step for development.” The historically conservative Ban, who is widely expected to run, has indicated he may not run with either party. Progressives have said he’s “Mr. Half-Half,” since he has favored positions held by both sides. Korea Herald
Building Better Leaders
Companies that grew organically…
…delivered greater shareholder returns than businesses that grew through acquisitions. The main reason was that organic growth requires less capital, though it takes more time. McKinsey
To break a bad habit…
…envision if-then scenarios. Say you want to drink less with friends; think, “If I’m offered a drink by friends this Friday, then I will say I want a glass of water.” New York University psychology professor Peter Gollwitzer says you’ll more likely succeed with a clear plan for implementing your resolution. Fortune
Master gradual persuasion while courting new clients
To court new clients, be careful not to give too much away. You and a client could agree on stages in the courting process that allow for the free flow of ideas while you receive minimal payments at each stage. Stanford Insights
Mexican president considers canceling meeting with Trump…
…after Trump‘s executive order to begin the process of building a border wall, which has enraged Mexican citizens and lawmakers. President Pena Nieto was set to meet with Trump next week and has reiterated that Mexico will not pay for any wall. While Trump’s order can begin the planning process, Congress will need to approve the considerable funding needed for such a project. The Hill
Leaked copy of executive order paves way for ‘black site’ prisons
The leaked order that President Trump is expected to sign would permit the CIA to restart ‘black site’ prisons holding terrorist suspects. It would also open the door to resume torture during interrogations. The Guardian
Trump to issue executive order to investigate voter fraud
Standing by his unsubstantiated claims that voting by illegal immigrants caused him to lose the popular vote by three million, Trump is expected to issue an executive order to investigate his claims. All 50 states have verified their voting results, with no reports of widespread fraud. Trump argues that many illegal voters are registered in two states; though voting in multiple states would be illegal, even Treasury Secretary nominee Steve Mnuchin and Trump’s daughter Tiffany are registered in two states. Fortune
Up or Out
Facebook has hired Hugo Barra to head its virtual reality and Oculus business. Reuters
Ford Motors has hired former Apple executive Musa Tariq as chief brand officer. Fortune
Tribune Media CEO Peter Liguori will step down in March. WSJ
Fortune Reads and Videos
Target raises standards for ‘green products’…
…with new guidelines on ingredients. By 2020, it wants full ingredient lists on beauty, baby, cleaning, and other products. Fortune
Trump Hotels plans to triple U.S. locations
It’s looking to expand in Dallas, Seattle, Denver, and other cities in the next four to eight years. Fortune
U.S. airlines want help…
…from President Trump in blocking a new nonstop Emirates flight from Athens to Newark, saying it would cost U.S. jobs. Fortune
Tostitos will temporarily offer a new chip bag that can detect…
…when you’ve been drinking. Just breathe on it; if it detects alcohol, it will display a $10 Uber discount code. The bag is timed for the Super Bowl. Fortune
Quote of the Day
“By flagrantly violating its Open Skies agreement with the United States at the start of the Trump administration, Emirates is throwing down the gauntlet…[W]e look forward to working with President Trump and his team to enforce these agreements and protect American jobs – something that the Obama administration failed to do.” — Jill Zuckman, a spokesperson for Partnership for Open and Fair Skies, which represents U.S. airlines, as they try to recruit President Trump in stopping a new Emirates flight to the U.S. Fortune