The Weekly Wrap for Saturday, 20 January 2018

DEEP DIVE These are early days but 2018 may well be remembered as the year the worm turned on Facebook and Google. Long seen as benevolent masters of the universe (not least because of their high-minded raisons d'être)  these two companies have become so pervasive that while ordinary monopolies are scrutinised for their market power, these two inspire regular debates on not just a regulatory but also a philosophical level. In fact we can write with near certainty that everyone who reads this has used at least one if not both of these services in the last 24 hours. These businesses are global. They are personal. And this week they shared plans for the future that not only reveal the extent of their reach, influence and vision, but could also spell doom for the global news industry. A target of convenience. PHOTO: Chris Carlson / AP Shares and dislikes - Facebook has been in the news a lot this week. 1,004 Danish teenagers face charges for sharing underage revenge porn on the platform, an Indonesian high school student was jailed over an insulting post directed at president Joko Widodo and the company has been coerced into investigating Russian meddling during the 2016 Brexit vote. But behind the scenes a far bigger shift is underway, one that will leave an indelible mark on global media. The News-less Feed - If you count yourself amongst Facebook's two billion users, your daily scroll is about to change. CEO Mark Zuckerberg announced this week that user-created 'original' content from family and friends will be prioritised within the News Feed - at the expense of news articles and other so-called 'public content'. It was a firm statement of intent following months of rudderless drift during which Facebook had studiously avoided its problems with news.  But how did things get to this point, and why did Facebook step into the news game in the first place? There would undoubtedly have been many reasons: the mobile revolution, panicked publishers, fair-weather advertisers and a turf war with Twitter. But behind it all was the likely pressure on what was then a newly listed public company to increase the number of times a user visited Facebook, and the amount of money each visit generated. The simplest way to do this was to increase the amount of content displayed to the user, by supplementing the existing news feed of dinners, engagements and baby photos with external 'public content' created by publishers and brands. And so executives at Menlo Park watched as the world's largest news organisations followed their readers onto the platform and the notion of going viral entered the lexicon and also quickly became a fundamental goal for publishers. BuzzFeed and others soon built revolutionary new businesses to manufacture viral, clickable content on Facebook. Insecurity preferences - While users were distracted by clickbait the personal information they were revealing to Facebook was being used by advertisers in novel (and it tuns out, nefarious) ways. During the 2016 US presidential election Russia used Facebook's detailed data to attempt to sway the loyalties of individuals through personalised propaganda. Unsurprisingly then, company executives have spent much of the past year being dragged before committees on Capitol Hill and upbraided. Regulators, intelligence organisations and the general public smouldered. Browbeaten, Facebook went into damage control. Hundreds of content editors were hired, fake news pages were banned, measures for verification and validation were added, and deeper partnerships with publishers mooted. But with each passing month and each failed countermeasure a realisation bloomed: Facebook shouldn't be the world's gatekeeper for news (and couldn't feasibly even if it wanted to). So Facebook opted out of the news. There has been a significant amount of hand-wringing in the press over this decision. A step away from news seems a prudent business decision for Facebook given the lurking threat of regulatory action. Although the market didn't agree, and it shaved some $3.3b off Zuckerberg's personal wealth. Still, it's not hard to imagine him sleeping better knowing that Facebook may be returning to something similar to his initial vision.  Unfortunately, what's good for Facebook may not be so for publishers who have become increasingly dependent on it for reach. Some of the newer 'digital-native' media companies derive up to 90% of their reads and views from Facebook - and even the legacy newspaper brands get up to 40% of their online reads through social media. Luckily some of these organisations have had the foresight to diversify their revenue model (principally by selling online subscriptions) and will survive. Many more, starved of reads and advertising dollars on Facebook, will put up paywalls in coming months. Others will collapse. Those who are heavily reliant on clicks will no doubt produce more of the "snackable" video content that Facebook's rumoured video tab will feature. Still, industry insiders hold grave fears for the future of companies like Vox and BuzzFeed . Popping the pop-ups - The trouble doesn't stop there for publishers and advertisers. In just a few short weeks Google is going to change the internet with a built-in ad-blocker on its Chrome browser. It's doing this ostensibly to streamline the user experience and combat predatory advertisements - a fear exacerbated by the recently discovered Spectre security flaw. And so from mid-February Google will block any advertisements that don't meet a new standard set by The Coalition for Better Ads. As it happens, the most powerful member of The Coalition for Better Ads is Google itself. And publishers will also be required to pay the Coalition in order to be certified as compliant. Removing auto-playing video, intrusive fullscreen ads, and popups from the web may seem a noble thing to do. But bear in mind that more than half the online advertising dollars in the world went to Google and Facebook last year. Now, under the guise of improving users' web experience Google is deploying brazen tactics that will almost certainly hurt its competitors. Businesses will now have the option of either advertising through Google's own ad business or risk not reaching the 45% of Americans who use Chrome as their browser. Google now owns the most popular operating system in the world, the most popular browser in that operating system, the most popular search engine in that browser, and the world's biggest advertising business. This isn't vertical integration, it's vertical fusion. And the fallout for everyone else is radioactive. WORLDLYWISE Oliver Ivanovic and the flag he died for. PHOTO: Bojan Slavkovic / AP A politician slain - Five bullets might be all it takes to push the young semi-state of Kosovo off a precipice. Since Kosovo's unilateral declaration of independence from Serbia in 2008 Oliver Ivanovich has been one of the few voices of reconciliation in the Serbian community. On Tuesday he was assassinated while walking into his office in the divided city of Mitrovica (ruled by Kosovar Serbs in the north and Kosovar Albanians in the south).  In 1998 the majority-Albanian population of Kosovo wrenched itself from Serbian influence in a bloody pitched conflict. At the centre of this was Mitrovica, where Ivanovich and a band of others fought a defensive guerrilla war against Albanian partisans. A NATO intervention the following year reined in the vastly more powerful Serbian military. A shaky peace was overseen by the Untied Nations but for the 40,000-50,000 Serbs living in North Kosovo it was a disaster.  Ivanovich was a complicated figure: fighter, peacemaker, alleged war criminal, and now, possibly martyr. The wounds from 1998 are still fresh and while Belgrade recognises Kosovo's institutions it (and its primary backer, Russia) do not accept Kosovar independence. It's likely that the slaying of a Serb politician at a time of boisterous nationalism in Serbia will destabilise this tense scenario. Nassar is berated by Judge Aquilina. PHOTO: Brendan McDermid / Reuters "Pure evil" - Extraordinary scenes were beamed around the world this week from the sentencing hearing of Larry Nassar. The disgraced former doctor for the USA Gymnastics team was forcefully lectured for over half an hour by Judge Rosemarie Aquilina for wanting to avoid hearing victim impact statements from the 140 women and girls he had molested. For well over a decade Nassar used his position of power to molest aspiring gymnasts (many under the age of thirteen) under the guise of medical examination. It's believed that Nassar contributed to severe mental health issues (and the early retirements) of many Olympic-capable athletes. Elsewhere in the United States this week a grotesque suburban nightmare unfolded when an emaciated teenager wandered into a police station south of Los Angeles. With almost no social skills, the girl led police to the home she had just escaped from. The young woman and her 12 siblings (aged between two and 29) had been shackled, occasionally tortured and starved since birth by their parents, Dave and Louise Turpin. All suffered debilitating physical and mental health issues - some were so isolated from the external world that they did not understand the concept of police when their door was eventually broken down. It looked like a normal suburban home from the outside. WHAT ELSE HAPPENED An Israeli soldier in the occupied West Bank town of Jenin. PHOTO: Mohamad Torokman / Reuters The European Union threw a spanner in the works when it outlined how Brexit could be reversed An official accidentally sent an SMS alert to all Hawaiians that a North Korean ICBM was on its way to the island A government funding bill has not passed Congress ahead of today's budgetary deadline America halved its contribution to the UN body that aids Palestinian refugees amid heightened tensions Bangladesh began repatriating Rohingya refugees to Myanmar despite continued ethnic violence in Rakhine state Bitcoin collapsed in value during the week; shedding almost half its value and dragging down other cryptocurrencies SoftBank closed a deal to become Uber's largest shareholder; triggering a suite of internal reforms Ethiopian authorities released popular opposition leader Merera Gudina from jail as part of a broad amnesty agreement American spy agencies revealed their surveillance of Chinese ships that were assisting North Korea dodge sanctions Turkey began shelling American-allied Kurdish fighters in northern Syria THE BEST OF TIMES... Get that out of your beak. PHOTO: AFP You can recycle that - The European Unions executive body has mandated that all plastic packaging sold within the EU must be recyclable by 2030. This extraordinary measure (along with a push to ban single-use plastic containers like coffee cups) will hopefully spark similar action everywhere else. Poetic (in)justice - In an incredible turn of events, a large contingent of Israeli rabbis have taken inspiration from Anne Frank in their efforts to shield African asylum seekers from deportation. At a conference discussing their plight an entire auditorium of religious leaders offered their homes and houses of worship up as sanctuaries. THE WORST OF TIMES... Straight to landfill. PHOTO: SMH Fast fashion - A virtuous cycle has been broken in the industry of international clothes recycling. In India several cities specialise in recycling fabrics that arrive from charity bins all across the world into emergency blankets. But now as consumer tastes have turned to cheap-import fast fashion the process has been shattered. Wedding fears - Many Gulf-watchers were shocked last week when a video was circulated around the internet of a gay couple in Saudi Arabia hosting a mock wedding ceremony.  This week we discovered that the men in the video and several of their guests have been taken into custody. Despite the high-profile publicity stunts to suggest growing liberalism there; homosexuality is still entirely taboo in the kingdom and punishable by death.  P.S. Your weekend long read... Depending on your politics George Soros is either one of the most generous philanthropists of the last hundred years or a sinister propagandist. This week the FT tackles how and why Soros is locked in combat with a populist government in Hungary.