GOOGL Alphabet Inc

By Lukas I. Alpert 

Alphabet Inc.'s Google and Facebook Inc. are making concessions long sought by news publishers whose business has been hurt by the platforms' dominance, moves that some in the media industry see as an effort to pre-empt potential regulatory backlash.

Google last week announced changes to how it ranks stories on its news page to better promote original content, addressing publishers' long-running complaints that their scoops were often overshadowed by quick rewrites by other outlets.

Facebook, meanwhile, is negotiating with media outlets to pay them for the rights to publish their stories in a special news feed on the social media platform, and will rely on humans to determine which stories to feature, The Wall Street Journal reported last month.

"The platforms are finally recognizing the massive role they play in our ecosystem and that pretending that they are neutral distribution channels just doesn't wash with regulators or with the public either," said Lydia Polgreen, editor in chief of HuffPost.

Top state law-enforcement officials from across the country last week launched antitrust investigations into Facebook and Google, further pressuring tech giants already under federal scrutiny over whether their online dominance stifles competition.

Congress has opened an antitrust probe into Google, Facebook, Apple Inc. and Amazon.com Inc. Over the summer, the Federal Trade Commission imposed a $5 billion fine and oversight conditions on Facebook for privacy violations.

While the probes haven't focused directly on the platforms' relationships with news publishers, the media industry has seen its business model severely disrupted by tech giants, particularly in online advertising. Together, Facebook and Google controlled 60% of the U.S. digital advertising market last year, according to eMarketer.

Google executives said the prospect of regulation didn't influence their effort to better promote original news, adding that technological advances had finally allowed the company to address a longstanding concern among publishers.

"The challenge of identifying and precisely ranking original reporting has taken years to address and has proven extremely difficult," said Richard Gingras, Google's vice president for news. "What has changed is that we now have a lot more technical capabilities than we had 10 years ago."

Facebook has expressed a commitment to improving its partnerships with news outlets, particularly those that publish legitimate, high-quality reporting.

"We understand the critical importance of rewarding publishers that put their resources into original reporting, which is why it's been one of our guiding principles for the news tab since we decided to develop the product earlier this year," said Campbell Brown, Facebook's vice president for global news partnerships. "It's important to get this right."

The outlets Facebook pitched on its news tab include the Journal's publisher, Dow Jones, people familiar with the matter said.

While many in the news industry welcomed Google's algorithm tweak to help original reporting rank higher on Google News, several said they would reserve judgment until they could ascertain whether the change was making an impact.

"With all of these things, you don't know what it means until you see it in practice," said David Chavern, president and chief executive of the News Media Alliance, a trade coalition representing some 2,000 news organizations in the U.S. and Canada, including Dow Jones.

Mr. Gingras wrote in a blog post last week that Google had made changes to keep stories containing significant original reporting higher in search rankings for longer. It also had changed guidelines for some 10,000 human raters charged with checking the algorithms' work, to give greater prominence to news sites with reputations for producing high-quality journalism and with records of industry awards, such as the Pulitzer Prize.

"We have long argued that provenance must be a priority and so applaud any change that actually highlights the qualitative difference in journalism and ends the crass commodification of content," News Corp Chief Executive Robert Thomson said in a statement. "We will closely monitor these alterations to the algorithm and trust that the promised reforms do indeed eventuate."

News Corp, the Journal's parent company, has been developing a news-aggregation service called Knewz.com that is designed, in part, to promote original reporting over quick rehashes of existing articles.

Google's rating-guideline change raised concern among conservative publishers who have long claimed big platforms have a liberal bias that leads them to unfairly downgrade right-leaning articles.

"I'm happy about this if they implement it fairly," said Neil Patel, co-founder and publisher of the Daily Caller. "But with Google, there has always been a lot of opacity about how they run their algorithms, and the worry is there will be a similar lack of transparency about how they define who they think is a respected publisher."

Facebook has been offering news outlets as much as $3 million a year in licensing fees to use headlines and article previews in a special news section it aims to launch later this year, the Journal reported last month. The social-media platform has been offering some smaller, regional publishers fees in the range of $500,000 annually, a person familiar with the matter said.

News Corp Executive Chairman Rupert Murdoch and BuzzFeed Chief Executive Jonah Peretti have both called on Facebook and Google to pay organizations that provide quality news.

"Those of us who do a lot of original reporting are thrilled Google is fixing this frustrating bug, but we're still waiting for Google and some other platforms to follow Facebook's lead in recognizing the real value they extract from our original journalism," said Ben Smith, BuzzFeed's editor in chief.

Earlier this year, Apple announced a partnership with more than 300 magazines and several digital media outlets and newspapers, including the Journal, for a $9.99 a month subscription news bundle called Apple News+. As part of the deal, publishers would split 50% of the revenue based on readership of their stories.

Write to Lukas I. Alpert at lukas.alpert@wsj.com

(END) Dow Jones Newswires

September 18, 2019 05:44 ET (09:44 GMT)

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