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Jun 30, 2016

Bits | The Business of Technology - June 30, 2016: Feeling Stung by a Fickle Friend Named Facebook

The New York Times

Thursday, June 30, 2016

The chief of Facebook, Mark Zuckerberg, at a conference in April.
The chief of Facebook, Mark Zuckerberg, at a conference in April. Eric Risberg/Associated Press
Facebook’s relationship with the media industry is a bit like the old fable of the scorpion and the frog.
If you need a reminder, the fable goes something like this: A scorpion asks a frog for a ride across a river. The frog smartly refuses because, well, it’s a scorpion. But the scorpion says that if he stings the frog while they are in the water, they’ll both die.
The frog accepts this logic, takes the scorpion on his back and goes into the water. So what does the scorpion do? It stings the frog anyway, dooming both of them. When the frog asks why, the scorpion says, “It’s my nature.”
The metaphor goes only so far, of course, because there are plenty of frogs happy to work with Facebook, regardless of its sting, and it is hardly a drowning company. The social medianetwork now has 1.65 billion users and shows few signs of slowing down. It has become an advertising machine — the envy of every internet company not named Google.
The future of the media industry, however, is a little more muddled. Facebook courted older outlets like The New York Times and The Washington Post as well as younger outfits like Vox and BuzzFeed as partners to create news products tailored for its news feed. In return, the news sites would get lots and lots of traffic.
The downside? Facebook can be a fickle friend, as old partners like the game company Zynga can attest. And on Wednesday, surprising no one familiar with its track record,Facebook said it was changing the algorithm that manages itsnews feed.
The upshot: You’ll see more photos and posts from your friends, and fewer news stories and videos from Facebook’s business partners. That means less traffic to the news sites, and more bad news for an industry that has seen more and more ad dollars disappear into giant internet companies.
— Jim Kerstetter
 
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