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What Alphabet Has on Tap for 2Q17

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Part 5
What Alphabet Has on Tap for 2Q17 PART 5 OF 13

The Bright Side to Google’s Media Cat Fight

Fighting fake news is a costly affair

While the tension that Alphabet’s (GOOGL) Google and Facebook (FB) are having with news organizations could adversely hit their revenues and profits, there is a potential bright side to the festering fight.

Google, Facebook, and Twitter (TWTR) are spending huge amounts of money and time battling “fake news” and other information problems such as online radicalization. Facebook said earlier this year that it was hiring 3,000 people to help screen live videos as part of its war on inappropriate content. The company is also backing a $14-million fund to fight false news stories.

The Bright Side to Google&#8217;s Media Cat Fight

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The time and financial investments that go into the false news war, for instance, could be funneled to more important activities such as investing in more growth or distributions to shareholders in the form of dividends. Yet considering the controversy that actual fake news has stirred up recently, Google and Facebook would spare nothing to fight it.

Working closely with news media could aid fake news war

One of the steps Google and Facebook have taken to combat actual fake news is to work with fact-checking organizations. Perhaps their war on false news stories could be much easier and more successful if they went further and worked more closely with credible news publishers.

For example, by increasing the supply of credible news, false news stories can be crowded out and die a natural death.

News Media Alliance isn’t about revenue alone

News Media Alliance, a trade association of news publishers trying to challenge Google and Facebook through US Congress, argues that its agenda isn’t just about better revenue sharing. The alliance expects its efforts, if success, to contribute to fostering quality journalism.

Members of the alliance include news organizations such as the New York Times (NYT), the Wall Street Journal, which is owned by a unit of News Corporation (NWSA), and the Washington Post, which is controlled by Amazon (AMZN) head Jeff Bezos.

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