November 1, 2017 Last Updated 8:27 am

Social media companies grilled by Senate subcommittee, fail to show self-regulating is working

Morning Brief: The NYTCO reported a strong third quarter, with both total revenue and profits up, but print ad declines of over 20% were a bad sign for other newspaper companies, still too dependent on print advertising, yet to report

The terrorist attack in NYC, the exile of the Catalan president, the sixth game of the World Series… there are good reasons why most people didn’t pay much attention to yesterday’s hearing in the Senate. But major news organizations had reporters there and so we can now see just what a mess the big techs and social media companies are making of their platforms. People are paying attention, but whether the executives at these companies are taking things seriously is another question. It doesn’t look like it.

The Subcommittee on Crime and Terrorism of the Senate Committee on the Judiciary held the meeting with social media representatives dubbed Extremist Content and Russian Disinformation Online: Working with Tech to Find Solutions. It was a chance for social media companies to explain what they saw during last year’s election, and what they are doing about it. Senators were rightly skeptical, as the social media companies treated the Congressman about the way they treat the public and the press, which didn’t make the members of the committee very happy.

What is particularly annoying is that the social media companies assume we are all idiots and cannot see what is right in front of our faces: Facebook delivers fake news and targets it; Twitter is awash in troll accounts, with the president having millions of them, all designed to promote him and Russian interests; Google delivers content that financially benefits itself, and fails to differentiate real news organizations from those established to influence politics only.

TechCrunch, Josh Constine:

Congress grills Facebook, Twitter, Google on shells hiding election meddlers

How can internet giants know that innocent-seeming U.S. companies aren’t actually shell vehicles for malicious foreign actors to buy ads to interfere with elections? The short answer is they can’t, and that drew questioning from a Congressional probe today into Facebook, Twitter and Google being used to manipulate the 2016 presidential election.

The hearing saw Facebook’s general counsel Colin Stretch dodge whether Facebook supports the new Honest Ads bill, instead touting the self-regulation it’s implementing. Google’s Richard Salgado affirmed that the company sees itself as a technology platform, not a media company or newspaper.

USA Today, Roger McNamee:

Despite Congressional testimony, Facebook still isn’t fully cooperating

This week a Facebook executive testified before Congressional committees investigating Russian interference in the 2016 election. The evidence is now overwhelming that Facebook, along with Google, Twitter, and other social media platforms, was central to the manipulation. The company has confirmed that Russian manipulation touched as many as 126 million Facebook users, but is doing everything it can to limit the scope of the investigation.

Not cooperating fully is a terrible for strategy for the country and for Facebook. With mid-term elections only a year away, the country has not even internalized the scope of the 2016 manipulation, much less taken sufficient steps to prevent a repeat in 2018. There is no way to get to bottom of the problem quickly without full cooperation from Facebook, cooperation that has not been forthcoming.

The Atlantic: Does Facebook Even Know How to Control Facebook?
NPR: Mark Zuckerberg’s Big Blind Spot And The Conflict Within Facebook
Slate: Once Dismissive, Facebook Now Says 126 Million Users Shown Russian-Generated Election Propaganda

The president is on Twitter today repeating whatever he sees on Fox & Friends. That a 71 year old man is so easily manipulated is a sad sight.

It is too bad, therefore, that Fox & Friends doesn’t cover business news because if it did they would have reported that The New York Times today reported their third quarter earnings and said that total revenue was up 6 percent and profits grew dramatically (see earnings report here). The report would not be good news for a man who constantly calls the paper ‘the failing New York Times.’

While it was a strong report for the Gray Lady, there were still things that were concerning.

The NYT has long since turned the corner on ad revenue versus reader revenue. But the continued ad losses should not be ignored just because subscription revenue continues to climb.

In the third quarter ad revenue fell 9 percent. What is troubling is that continued higher readership should, in theory, eventually translate into higher digital ad revenue… and it is, digital advertising revenue increased 11 percent. But print ad revenue fell a whopping 20.1 percent in Q3.

OK, what does this mean? For the NYT, not as much as it will for other newspapers. The NYT has broad national reach, so it can attract national digital advertising. But other papers have far less reach and are still dependent on local ads. A 20 percent decline in print advertising tells me that when other newspaper companies report later this week and into next we may see pretty scary numbers.

One of the first newspaper companies to report this quarter was McClatchy, and they said that while digital ad revenue grew 8.2 percent, total advertising revenue was $115.3 million, down 13.4 percent.

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