Facebook news feed change leaves media out in the cold

Note: This was originally published as the daily newsletter for the Columbia Journalism Review, where I am the chief digital writer

Last week, Meta announced a major change to its Facebook service. Instead of a user’s “news feed” being composed primarily of content from friends and other accounts a user has chosen to follow, the main feed on a user’s Facebook page will be an algorithmically-filtered collection of content from anywhere, and posts from a user’s friends will be moved to a separate page. Mark Zuckerberg, Meta’s CEO, wrote about the proposed changes in May, and now the redesigned feeds are in the process of being rolled out to Facebook’s three billion daily users. As part of these changes, Sara Fischer of Axios also reported that the term “news feed” is being retired as a descriptor for the main feed on a user’s page. Facebook first introduced the news feed in 2006, as a way of making it easy for users to see what all their friends were doing in one place, and while the new feature was not well received by some, it soon became the main interface for the social network, and the driving force behind Facebook’s growth as an advertising vehicle.

According to Axios, one reason why the main feed will no longer be called a “news feed” is that Meta is “de-emphasizing its investment in news content”. The Wall Street Journal reported that Campbell Brown, the head of global media partnerships for Meta, said last week the company is “reallocating resources away from its Facebook News tab, and its Bulletin newsletter platform.” This kind of reallocation—which may be driven in part by the financial pressure the company is under—could mean an end to the payments Meta has been making for the past three years to news publishers who agreed to have their content featured on a separate News tab. Facebook News was launched in 2019, after years of complaints from publishers such as Rupert Murdoch, founder of News Corp., about Facebook stealing content from media companies. The Journal reported that Meta has paid a total of $90 million a year to about 200 news outlets, including more than $15 million a year to the Washington Post, and more than $20 million a year to the New York Times.

Even at the time, many saw the Facebook News launch as primarily a public relations exercise, rather than a sign of any ongoing commitment to the media industry or journalism. Emily Bell, director of the Tow Center for Digital Journalism at Columbia, wrote that a one-on-one interview between Robert Thomson, chief executive of News Corp—parent company of Dow Jones and the Journal—and Mark Zuckerberg, chief executive of Meta, was “a publicity coup for Facebook,” a sign that it had “tamed the biggest beast in the journalism jungle”. Only a year before the new payments were announced, Zuckerberg seemed skeptical of the idea of paying publishers for their news content, saying “I’m not sure that makes sense”. Since then, Meta has been forced to make payments to news publishers in Australia, after that country passed a law that compelled digital platforms to negotiate licensing deals or have them imposed by the government. (Several countries such as Canada and the UK have proposed similar legislation).

The end of the Facebook News tab, and the tacit admission that the main user feed no longer qualifies as a “news feed,” are only the most recent signs that Meta and Facebook’s interest in news continues to decline—apart from payments it is forced to make by legislation, and the remains of a few token programs such as the Meta Journalism Project, which hands out grants and training to local news outlets. When the project was first launched in 2017, as a kind of competitor to the Google News Initiative, Facebook’s announcement made promises about how publishers would be able to use the company’s “Instant Articles” format to generate revenue, and how they would be trained to use Crowdtangle, an analytical tool for social platforms that Facebook acquired. Many have since found Instant Articles to be a bust in terms of revenue, and Crowdtangle appears to be in the process of being dismantled, in part because some Meta executives believe it allowed the media too much access to Facebook data.

Facebook’s history in dealing with the news media is filled with a number of similar examples of promises that have led to disappointment. In 2016, as the Nieman Journalism Lab notes, Zuckerberg and other Facebook executives started “pushing the notion that news video on Facebook was publishers’ bright future, a “new golden age”. The metrics Facebook was using to measure engagement with news video later turned out to be overstated, however, and the company paid a group of news publishers—who had committed significant resources to this new pivot-to-video strategy—$40 million to settle a lawsuit over that fact (although Facebook did not admit any wrongdoing). The Wall Street Journal later reported that the shift to more video in the news feed might have actually driven engagement down rather than up, meaning news publishers actually wound up worse off as a result of following the social network’s advice. An attempt to help push traffic to local news publishers also proved to be a bust.

All of these experiences have come on top of the continued down-ranking of professional news publishing content by the Facebook algorithm. In the latest change, in 2018, Facebook said it was de-emphasizing content from news publishers because users told the company that “public content—posts from businesses, brands and media—is crowding out the personal moments that lead us to connect more with each other,” according to a blog post written by Zuckerberg. At the time, Franklin Foer wrote in The Atlantic that Facebook was doing the media a favor. “It has forced media to face the fact that digital advertising and ever-growing web traffic will never sustain the industry,” he wrote, “especially if that traffic comes from monopolies like Facebook.” Now, media companies will get to learn that lesson all over again, as their content is forced to compete in a new algorithm-driven feed run by company that is trying to compete with TikTok.

Here’s more on Facebook:

Disinfo rethink: Meta said it has asked its Oversight Board of independent advisors for advice on how to handle misinformation around COVID-19. Nick Clegg, Meta’s head of global affairs, wrote in a blog post that while the company remains committed to combating COVID-19 misinformation, it is asking the board to consider “whether we should address this misinformation through other means, like labeling or demoting it either directly or through our third-party fact-checking program”.

Virtually blocked: The Federal Trade Commission on Wednesday filed for an injunction to block Meta, the parent company of Facebook, from buying a virtual reality company called Within, according to a report in the New York Times. “The antitrust lawsuit is the first to be filed under Lina Khan, the commission’s chair and a leading progressive critic of corporate concentration, against one of the tech giants,” the Times reported. “Khan has argued that regulators must stop violations of competition and consumer protection laws when it comes to the bleeding edge of technology, including virtual and augmented reality, and not just in areas where the companies have already become behemoths.”

Literally anxious: Anxiety has been increasing among Facebook staff as Mark Zuckerberg, the CEO of Meta, ratchets up the pressure in order to compete with TikTok, some reports say. “Realistically, there are probably a bunch of people at the company who shouldn’t be here,” Zuckerberg said on the June 30th call, according to a recording obtained by The Verge. “And part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might just say that this place isn’t for you. And that self-selection is okay with me.”

Celebrity critics: Kylie Jenner and Kim Kardashian, two of the most well-known celebrities on Instagram, with a combined 686 million followers, both posted story updates on their accounts on Monday asking Instagram (which is owned by Facebook) to “stop trying to be TikTok.” The two were reacting to changes the service has made to its feeds, with more algorithmically-recommended content and less content from friends and other accounts a user has chosen to follow. “Make Instagram Instagram again (stop trying to be TikTok. I just want to see cute photos of my friends),” Jenner and Kardashian both wrote.

Other notable stories:

GOP politicians are “increasingly shirking sit-down interviews, barring journalists from 2022 events, and skipping debates,” Charlotte Klein wrote for Vanity Fair. At the annual Republican “Sunshine Summit” in Florida, “many local and national mainstream outlets were unable to get press credentials, according to the Tallahassee Democrat,” Klein writes, “including the Miami Herald, Politico, Florida Politics, the New York Times, and the Washington Post“. A Florida wire service, the Wall Street Journal, and Business Insider were among the few mainstream outlets allowed to cover the event. Meanwhile, Paul Farhi profiled Christina Pushaw, the press secretary for Ron DeSantis.

Vox Media is laying off 39 people—about two percent of its current workforce—in an effort to prepare for a potential economic downturn, Sara Fischer reported for Axios. “The company is laying off staffers in a few key areas, including recruiting, some editorial roles and sales,” Fischer wrote. “The cuts are targeted towards certain parts of the company, including some departments within its lifestyle site, Thrillist.” A source told Axios that Vox plans to continue to hire for certain critical roles, but will reduce the pace of hiring.

Sheila Rayam has been named executive editor of The Buffalo News, the first Black journalist and only the second woman to hold that position in the 142-year history of the newspaper, The News announced on Wednesday. “Rayam has been the executive editor of Gannett’s Mohawk Valley news operations, including the Utica Observer-Dispatch, since April 2021,” the paper wrote. “Prior to that, she spent three decades rising through the ranks at the Democrat & Chronicle after graduating from SUNY Buffalo State.”

Vanessa Pappas, the COO of TikTok, announced on Wednesday that the company will soon give researchers access to much of the platform’s data and to its moderation systems, The Verge reported. “Pappas says TikTok will soon provide access to the ‘public and anonymized data’ on the platform so ‘selected researchers’ can “assess content and trends or conducts tests,” The Verge wrote. “Later this year, researchers will have access to TikTok’s moderation tools at its transparency center, a virtual hub where people can learn more about TikTok’s policies and get updates about the changes it’s making.” TikTok has come under fire for the connections that Bytedance, its parent company, has to China.

For CJR, Jem Bartholomew talked with Becca Ricks, a senior researcher at the Mozilla Foundation, whose investigative work highlighted how partisan influencers are evading TikTok’s weak political ad policies. “We zeroed in on conservative organizations like Turning Point USA,” Ricks said. “They’re a nonprofit and they have a dedicated influencer program that’s specifically targeted at funding young conservative content creators on social media. We found a number of influencers who had been flown out to their events or had talked about their relationship with TPUSA.”

Disney on Wednesday confirmed that it will allow political issue ads on the Hulu streaming service, effective immediately, according to Axios. “Hulu has prohibited issue advertising for years, although it has accepted candidate advertising. But now that Disney has majority control over the streamer, it’s moving to integrate Hulu’s policies to match Disney’s,” the site reported. Democratic party groups were upset prior to the change that Hulu was blocking ads related to abortion and gun control.

Grace Abels writes for Politifact about two Facebook pages that say they provide “newsy and up-to-the-minute coverage of Russia’s war in Ukraine,” but actually spread dangerous misinformation. “On a given day, their followers might see videos claiming Norwegians raided Russian ships, Vladimir Putin was defeated on ‘all fronts,’ or that a single British ship blocked a Russian fleet,” Abels writes. “None of those headlines are true. But that doesn’t stop the pages from earning clicks, views and a monetizable following.”

The unlikely survival of the humble avocado

Fascinating story here of how we got the avocado — something that was not a given by any means, as Maria Sharapova describes at The Marginalian (formerly Brain Pickings):

In the last week of April in 1685, English explorer and naturalist William Dampier — the first person to circumnavigate the globe three times — arrived on a small island in the Bay of Panama. Dampier made careful note of local tree species, but none fascinated him more than the tall “Avogato Pear-tree,” with its unusual fruit — “as big as a large Lemon,” green until ripe and then “a little yellowish,” with green flesh “as soft as Butter.” He described how the fruit were eaten — two or three days after picking, with the rind peeled — and their most common local preparation: with a pinch of salt and a roasted plantain, so that “a Man that’s hungry, may make a good meal of it.”

Continue reading “The unlikely survival of the humble avocado”

How COVID affected one person with a chronic illness

Hannah Soyer, who has a condition called Spinal Muscular Atrophy that affects her lungs, writes about trying to negotiate friendships and other relationships with people for whom COVID has been largely a nuisance:

“Before COVID, I’d never faced such blatant disregard for disabled and chronically ill life. I watched friends and family members — people who said they loved and cared about me — take part in activities clearly linked to spreading the virus, like eating in crowded restaurants and attending large parties. These choices felt like betrayals, and each new one stung.

I believe I have a right to exist safely in public spaces. Do others have an obligation to make that happen? What do we owe each other, as humans, as friends? Do we owe each other a chance at living, and how much should we change our lives to do that? Alternatively, do we owe each other forgiveness and the benefit of the doubt, and if so, to what extent?”

The sweet relief of being a tiny speck in the universe

This is from a recent instalment of Ann Friedman’s great newsletter, about the new images of deep space taken by the new James Webb telescope — images of hundreds of millions of stars and galaxies, whose light has only just reached us after billions of years:

“The Earth is a very small stage in a vast cosmic arena,” wrote Carl Sagan in 1994 about an image of our home planet, seemingly alone in the vastness of space, captured by Voyager 1. “Our posturings, our imagined self-importance, the delusion that we have some privileged position in the Universe, are challenged by this point of pale light,” he continued. “Our planet is a lonely speck in the great enveloping cosmic dark.” Now we can see, thanks to the mind-bending chaos of deep space revealed by the Webb telescope, that we aren’t alone in a vast cosmic emptiness. We are alone in a crowd.

The “cosmic cliffs” of the Carina Nebula. This image is about 250 lightyears across

But the effect is the same: Our terrestrial problems have been placed in appropriate context once again. “My life is meaningless!” exclaimed my friend Agatha, in a relatable post about the Webb photos. “I’m so relieved!” Is there a word for this feeling? The comfort of knowing you are a brief speck? I feel it when I’m in a deep gorge or at the base of a giant tree. When I connect with a work of art created in a lifetime that never touched my own. When I behold a thumping rave of faraway galaxies as they existed billions of years ago. 

Google feeling the antitrust heat over online ad business

Note: This was originally published as the daily newsletter for the Columbia Journalism Review, where I am the chief digital writer

On July 8, the Wall Street Journal reported that Google, the search-engine subsidiary of Alphabet, had offered concessions to the US government, in an attempt to stave off a potential antitrust lawsuit targeted at its advertising business. “As part of one offer, Google has proposed splitting parts of its business that auctions and places ads on websites and apps into a separate company under the Alphabet umbrella,” the Journal reported. If this were to take place, the entity created would be worth tens of billions of dollars, according to the sources the Journal spoke with. The proposal was described as a “sign that legal and regulatory pressures on the tech giant are coming to a head.” Over the past two years alone, Google and Alphabet have been the target of half a dozen antitrust actions led by both state and federal authorities, aimed at the company’s control over both the search market and the digital ad market, and members of Congress have proposed a law that would break up Google’s digital ad business. The European Union’s antitrust regulators are also investigating the company’s advertising operations.

Google’s proposal to split its ad operations doesn’t seem to have been warmly received by the US Department of Justice, however. On Thursday, a report from Bloomberg said that antitrust authorities are “likely to reject concessions offered by Alphabet, clearing the way for an antitrust lawsuit over Google’s dominance of the online advertising market.” Bloomberg said a lawsuit could be filed against the company as early as August, according to its anonymous sources. The lawsuit would join a similar suit that was launched by the Department of Justice in 2020, aimed at Google’s dominance of the online search market. According to Bloomberg, the digital ad lawsuit is being handled by Doha Mekki, the second most powerful official in the Department of Justice, which makes the likelihood of a quick settlement remote at best. “You’re going to see a lot more litigation from the antitrust division,” Mekki said at an event in April. “The division’s position is we are not planning to take settlements. Settlements suggest compromise.”

Google’s advertising business is also the subject of an antitrust suit by a number of state attorneys general, led by Ken Paxton, Attorney General for Texas. That lawsuit was filed in December 2020 and remains ongoing in New York federal court. It was recently updated with an unredacted document that details how Google allegedly uses its control of all aspects of the ad market to rig auctions in its favor, boosting its revenue by potentially hundreds of millions of dollars (online ads generated more than $30 billion in revenue for Google last year). Like most of the other lawsuits and regulatory actions against Google for its dominance of the digital ad business, the one from the state attorneys general focuses on one thing: the fact that Google simultaneously controls the world’s largest digital ad buying platform, the largest online advertising exchange, and the largest platform for displaying ads on publishers’ websites. According to Wired, one unnamed employee who was quoted in the state attorneys general lawsuit compared it to “if Goldman or Citibank owned the New York Stock Exchange.”

In May of this year, a group of congressmen led by Mike Lee, a Republican senator from Utah, introduced a bill called the Competition and Transparency in Digital Advertising Act, which would effectively prevent Google from controlling all aspects of the online ad market. Although it doesn’t mention the company by name, it says that any company with more than $20 billion in digital advertising revenue—in other words, Google and Facebook—would be forbidden from owning multiple parts of the online ad sales infrastructure. These digital giants could choose to own the ad sales end of the market, or an online ad exchange, or the ad buying and display business, but not all of them at the same time. The lack of competition in digital ads, Lee said in a statement when the bill was tabled, “means that monopoly rents are being imposed upon every website that is ad-supported and every company that relies on internet advertising to grow its business.”

Among the companies that rely the most on internet advertising are digital news publishers. Instead of selling their own ads, most use ad networks and ad exchanges, the largest of which (in both cases) belong to Google. This allows them to take advantage of both the reader targeting such networks offer, and tools such as “real time bidding,” in which a split-second virtual auction for ad space is held when a page is loaded. The Paxton lawsuit alleges Google uses its control of both the buy side and the sell side of the ad market to rig these auctions. The Competition Markets Authority in Britain, a central regulatory body, recently announced that it is concerned that Google may “illegally favour its own ad exchange services.” One of the dangers of Google’s control over the market, the CMA says, is that it could “reduce the ad revenues of publishers, who may be forced to compromise the quality of their content” or put it behind paywalls.

Google initially succeeded by building a better search engine, the CMA stated in an overview of the online ad market it published in 2020, but “they are now protected by such strong incumbency advantages – including network effects, economies of scale and unmatchable access to user data – that potential rivals can no longer compete on equal terms.” Google disagrees, not surprisingly. In a response to Paxton’s lawsuit in January, Google maintained that the suit was filled with “inaccurate and inflammatory allegations,” and that it “fails to acknowledge that ad tech is a highly dynamic industry with countless competitors.” Google has responded in the past to allegations about the effect it has on publishers by pointing out that its ad technology “helps news organizations make money by showing ads on their websites, apps and videos” and that every year Google pays “billions of dollars directly to the publishing partners in our ad network.”

Here’s more on Google and advertising:

Ad nauseam: An analysis of the online ad market by Digiday, published in February, predicted that Google, Facebook, and Amazon will account for more than half of the global ad market this year—not just digital ads, but all ads. According to one estimate, last year the three companies took in almost three quarters of all global digital ad spending. Google’s ad business, including ads sold on its own sites as well as ads sold through third-party networks, brought in more than $200 billion in revenue, while Facebook accounted for $115 billion. According to a report in the Financial Times, the three tech giants have doubled their share of ad revenues in the past five years.

OpenTube: Google offered in June to let rival ad networks and agents place ads on YouTube, as part of an attempt to settle an investigation by the European Union into its advertising dominance. As part of the case, “the EU competition watchdog singled out Google’s requirement that advertisers use its Ad Manager to display ads on YouTube and potential restrictions on the way in which rivals serve ads,” Reuters reported. If Google can’t find a way to settle the case, it could wind up having to pay a fine equivalent to 10 percent of its global revenue, or about $26 billion.

Bedfellows: Oles Andriychuk, director of the Centre for Internet Law and Policy at the University of Strathclyde in Glasgow, wrote about how traditional media chose to get in bed with Google and Facebook instead of trying to fight them. “The current structure of digital advertising markets makes the Google-Facebook duopoly an unavoidable trading partner for every party in the content consumption supply chain,” he wrote. “The media industry remains the only meaningful market force potentially capable of mitigating the duopolistic order of digital advertising, but traditional media appear to be more interested in partnering with Big Tech than competing with it.”

Other notable stories:

Chinese hackers sent a flood of malicious emails to White House correspondents and other prominent US journalists in the days leading up to the January 6, 2021 attack on the Capitol, according to an analysis by Proofpoint, a US cybersecurity firm, as reported by CNN. The hackers were “scrambling to ascertain whether there would be a peaceful transfer of power in the US,” according to the report, so they used email subject lines about Donald Trump’s attempts to overturn the 2020 election, pandemic relief legislation, and other key US political topics. “Proofpoint attributed the hacking efforts to a group that has been linked to China’s civilian intelligence agency, the Ministry of State Security,” CNN reported.

Tech platforms such as Facebook and Twitter seemed intent on removing misinformation about the war in Ukraine when the attacks first started, but their commitment to do so has waned, according to a report in the Washington Post, based on research from a European nonprofit. “Ukrainian officials who have flagged thousands of tweets, YouTube videos and other social media posts as Russian propaganda or anti-Ukrainian hate speech say the companies have grown less responsive to their requests to remove such content,” the Post reported, and “accounts parroting Kremlin talking points, spewing anti-Ukrainian slurs or even impersonating Ukrainian officials” remain active on social networks.

Britain’s proposed Online Safety Bill is expected to be delayed until the fall, due to the ongoing impact of the resignation of Boris Johnson, the British prime minister, as leader of the Conservative Party, Politico reported. “The bill would impose a legal duty of care on internet companies such as Twitter and Facebook to keep users safe [but] moves to include some legal but harmful content in the scope of the bill have been controversial,” Politico reported. One of the candidates to replace Johnson as leader of the Conservative party, and therefore a potential prime minister, has said that he doesn’t agree with some aspects of the Online Safety Bill as it has been drafted.

A new study authored by a group of social scientists at Stanford, Cambridge, and the University of Pennsylvania suggests that American TV audiences are far more polarized politically than online audiences are. The researchers said they analyzed “billions of browsing and viewing events between 2016 and 2019,” and came to the conclusion that 17 percent of TV-watching Americans are “partisan-segregated” in their content consumption, compared with roughly 4 percent of online news readers. TV news consumers are also “several times more likely to maintain their partisan news diets month-over-month,” the group found. “Our results suggest that television is the top driver of partisan audience segregation among Americans.”

The Guardian announced Thursday that Betsy Reed will be the new editor the Guardian’s US operations. She was previously the editor-in-chief of The Intercept, a position she took n 2015, just a year after the site was founded. While she was the editor, The Intercept won a number of journalism awards, including a Polk Award. Prior to joining the site, Reed was executive editor of The Nation. Reed replaces John Mulholland, editor of Guardian US since 2017, who announced earlier this year he was stepping down. She will be replaced as editor-in-chief of The Intercept by Roger Hodge, formerly deputy editor, and Nausicaa Renner, a former editor at CJR, becomes deputy editor.

A Chinese woman “spent years writing alternative accounts of medieval Russian history on Chinese Wikipedia, conjuring imaginary states, battles, and aristocrats in one of the largest hoaxes on the open-source platform,” Vice reported. The hoax was exposed last month by Yifan, a Chinese novelist, who was doing research for a book. The user, known as Zhemao, wrote more than 200 articles on the Chinese edition of Wikipedia since 2019, and many had elaborate (but fake) footnotes and citations to books and documents. “The content she wrote is of high quality and the entries were interconnected, creating a system that can exist on its own,”John Yip, a Chinese Wikipedian, told Vice. “Zhemao single-handedly invented a new way to undermine Wikipedia.”

Reporters, editors, and producers who work at PBS NewsHour announced that they are attempting to unionize with SAG-AFTRA, which already represents the news unit’s anchors and correspondents, according to The Hollywood Reporter. “The workers, who are calling their group the NewsHour Union, announced their organizing attempt on Tuesday,” the magazine reported. The organizing committee representing the staffers said in a statement that “as the creative engine behind one of the most trusted news institutions in the country, our goal is to strengthen this pillar of American television news by creating a better, healthier and more transparent workplace.”

Greg Burns writes for the Local News Initiative at Northwestern University about a number of small investment groups that have been snapping up local newspapers over the past year or so, as chains like Gannett, Lee Enterprises, and Alden Global restructure their portfolios. “Since 2020, three companies have led the way,” he writes, including CherryRoad Media of New Jersey, which owns 63 papers in 10 Midwestern states; Paxton Media, which is based in Kentucky and owns 115 newspapers in 10 Southern and Midwestern states; and Ogden Newspapers, based in West Virginia, which owns 101 papers in 18 states stretching from New Hampshire to Hawaii.

A bronze mirror with a hidden secret

While plumbing the archives at the Cincinnati Art Museum, curator Hou-mei Sung uncovered what appeared to be an ordinary bronze mirror (prior to the development of glass mirrors, people often used polished bronze to see their reflection). After closer inspection, she realized that when a light was shone on it, the mirror revealed a hidden image of a spiritual figure surrounded by rays. Often called a “Magic Mirror,” this extremely rare work is part of a small collection of similar objects that date back to the Han dynasty (202 BCE to 220 CE)—only a few similar Buddhist pieces from China and Japan are thought to exist.

via Colossal

The Statue of Liberty’s disembodied arm

The Statue of Liberty’s disembodied arm stood in Madison Square from 1876 to 1882. It had been agreed that Frédéric Bartholdi would create the statue while the United States paid for the pedestal. Americans were a bit behind in offering donations, so Bartholdi sent along the arm and torch to help inspire contributions. It took six years of benefit concerts, auctions, souvenir photos, and other mementos, but the full statue was finally dedicated on Liberty Island on October 28, 1886.

via Futility Closet

Also, I learned that the structure holding up the various pieces of the statue was designed by a guy named Gustave Eiffel, who later built a pretty famous tower in Paris. And the arm of the statue was damaged in a massive explosion at a munitions depot on nearby Black Tom Island in 1916 — an explosion that much later was proven to be an act of sabotage by German secret agents.

Twitter takes Elon Musk to court over failed acquisition

Note: This was originally published as the daily newsletter for the Columbia Journalism Review, where I am the chief digital writer

On May 13, a month to the day after Elon Musk filed a notice with the Securities and Exchange Commission saying he intended to acquire Twitter for $44 billion, Musk announced that the deal was on hold, “pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” At the time, some observers said they saw Musk’s concern as an excuse to either back out of the takeover deal or negotiate a lower price, since the value of Twitter’s stock had already fallen by more than 30 percent between when he announced his acquisition plan and when he put the deal “on hold.” On Friday, Musk filed a new statement with securities regulators saying the offer had been terminated because Twitter was “in material breach of multiple provisions of [the purchase agreement,] including making what Musk alleges were “false and misleading representations” about the state of Twitter’s business. The termination notice also states that Musk believes Twitter could suffer a “material adverse effect” on its business because of its under-counting of spam accounts.

On Tuesday, Twitter fired off its own salvo in the ongoing battle over the company’s future: a lawsuit in the Chancery Court of Delaware, where the company is registered, aimed at getting Musk to follow through on his offer. In the complaint, Twitter alleges that Musk “refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.” Despite a legal commitment to buy the company, Twitter says Musk “apparently believes that he—unlike every other party subject to Delaware contract law—is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.” The Twitter lawsuit doesn’t pull any punches when it comes to Musk’s behavior: among other things, it says his attempt to get out of the deal is “a model of hypocrisy,” because he said one reason he wanted to buy the company was to get rid of spam, but then suggested in his termination notice that the amount of spam was the reason he was cancelling the deal.

“When the market declined and the fixed-price deal became less attractive, the lawsuit states, “Musk shifted his narrative, suddenly demanding ‘verification’ that spam was not a serious problem on Twitter’s platform, and claiming a burning need to conduct ‘diligence’ he had expressly forsworn.” The claims that Musk makes in his termination notice, about Twitter allegedly misrepresenting the state of its business, “are pretexts and lack any merit,” the company’s lawsuit adds. Twitter also accuses Musk of breaching the merger agreement repeatedly, alleging that he has “purported to put the deal on ‘hold’ pending satisfaction of imaginary conditions, breached his financing efforts obligations in the process, violated his obligations to treat requests for consent reasonably and to provide information about financing status, violated his non-disparagement obligation, [and] misused confidential information” provided by Twitter.

Continue reading “Twitter takes Elon Musk to court over failed acquisition”

Queen Victoria, 18th century marriage and the rise of the middle class

A fascinating sociological study of what happened when Queen Victoria became a widow and her mourning period interrupted the London Season — the period in which eligible bachelors tried to find eligible young ladies to marry. That interruption led to more intermarriage between peers and commoners, and that in turn helped change the economic landscape in Great Britain forever.

Peers courted in the London Season, a matching technology introducing aristocratic bachelors to debutantes. When Queen Victoria went into mourning for her husband, the Season was interrupted (1861–1863), raising search costs and reducing market segregation. I exploit exogenous variation in women’s probability to marry during the interruption from their age in 1861. The interruption increased peer-commoner intermarriage by 40 percent and reduced sorting along landed wealth by 30 percent. Eventually, this reduced peers’ political power and affected public policy in late nineteenth-century England.