Home World Business Facebook, Google are ‘wastelands’ without news, News Corp chief says

Facebook, Google are ‘wastelands’ without news, News Corp chief says

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Problems are on the horizon for news organisations and Facebook alike unless the relationships between these companies can be made “equitable”, News Corp chief executive Robert Thomson has warned .

He revealed Facebook’s Mark Zuckerberg and Cheryl Sandberg and several other lead executives recently visited News Corp to talk through the issues facing news creators and social media platforms.

News Corp chief executive Robert Thomson recently met with Facebook. News Corp chief executive Robert Thomson recently met with Facebook. 

“They’re very dependent on what we produce and therefore need to recognise that unless there’s a more equitable relationship then we’ll have problems,” Mr Thomson told the UBS 45th Annual Global Media and Communications Conference.

“I think there was a recognition at the end [of the meeting with Facebook] that for the relationship to be a fruitful one, particularly on subscriptions, something needs to happen because the current model with Facebook is not working.

“Clearly, if you took our quality content and the content of other newspapers and content creators from those sites they’d be pretty barren wastelands.”

Some steps had already been made to level the playing field for news organisations, including the end of ‘first click free’ on Google, where subscription articles weren’t properly indexed allowing the organisation that broke the news to end up lower down on Google searches than a “knock-off site”.

In an “era of fake, false news” he said verified audiences and authentic content was critical for both business and society.

“It’s important for us to stand up for quality content and environments that enhance advertisers reputation and don’t degrade them.”

This comes as the company announced its launch of new US advertising platform, News IQ, to protect brands from showing up next to inappropriate content.

The diversion of advertising away from traditional media towards internet platforms is one issue of a new government-directed inquiry by the Australian Competition and Consumer Commission.

But while there were difficulties that needed solving, the real gem in the crown was the real estate arm of the business – including REA Group in Australia and Realtor.com in the US.

The home buying market is particularly lucrative for advertisers, even in indirectly related products, as moving house is often a trigger for many other purchases and changes, including a new car, TV and local supermarket.

He said News Corp would focus on “sensible adjacencies” – including mortgage finance, and other areas close to the core expertise of the business.

A research note from Macquarie Wealth Management published on Tuesday said the major opportunities for property giant REA Group, and its rival Domain Holdings Australia, were not in relying on real estate listings, but in growing their presence in the mortgages, insurance, and comparison and connection industries.

Domain is majority-owned by Fairfax Media, publisher of the Sydney Morning Herald and The Age.

The mortgage broker market alone in Australia was estimated to be worth $2 billion, or about two and a half times the size of the online advertising industry.

“Property portals are uniquely positioned to participate in growth”, Macquarie analyst Bob Liao’s research note said.

Already, both companies have started taking steps in this direction.

REA has a 1.5 per cent revenue market share of the mortgage market since acquiring mortgage brokers SmartLine.

And Domain also moved into the home loans space in June with Domain Loan Finder, in which it has 60 per cent ownership as part of a joint venture with Lendi.

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