July 20, 2024

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Truly Business

Here’s how tech is taking over the news media

13 min read

SAN FRANCISCO, CA - SEPTEMBER 13:  Entrepreneur Marc Andreessen speaks onstage during TechCrunch Disrupt SF 2016 at Pier 48 on September 13, 2016 in San Francisco, California.  (Photo by Steve Jennings/Getty Images for TechCrunch)

Entrepreneur Marc Andreessen speaks onstage during TechCrunch Disrupt SF 2016 at Pier 48 on September 13, 2016 in San Francisco, California. (Steve Jennings/Getty Images for TechCrunch)

Last week workers at a San Francisco-based company announced they were forming a union.

“We are organizing because it is more important than ever that companies are equitable and supportive of their employees… [Our company] must support and protect its workforce and create the best environment possible in these turbulent times.”

While this sounds like it could be about a meatpacking plant or plastics factory, the company in question is Medium, a digital media publishing platform created by Twitter (TWTR) co-founder Evan Williams. (You can read the entire statement here.)

That employees at Medium feel the need to join the Communications Workers of America (CWA)—a 100-year-old union best known for repping workers at AT&T and (Yahoo parent company) Verizon—perhaps speaks to a failure by Medium management. Which would be ironic since a number of years ago the company instituted a “Holacracy” model, which it touted as “a radical new theory of corporate structure, a completely management-free environment,” and “by far the best way to structure and run a company.” Apparently it wasn’t all that. The Holacracy was scrapped after three years.

The point is that leadership at Medium have deeply considered the idea of management and its employees still feel it’s necessary to unionize. And it speaks to a bigger point too, which is that even after all these years of tech and media melding together, the divisions between these two businesses are deeper than ever and at the same time becoming more urgent to address as the tech industry inexorably takes over more and more media, in particular the news business.

You’re probably familiar with that latter, takeover point, but I suspect that you may not have considered the totality of tech’s incipient media dominance.

Let’s explore that now.

Tech companies and tech moguls hold sway over the news business in at least three overlapping ways. First, if you include social media platforms (Facebook (FB), Twitter and YouTube) as media—as you certainly should—the tech industry is actually now defined to a great degree by media companies. (We could also include a portion of Apple (AAPL) by dint of Apple News and its music business and LinkedIn, now owned by Microsoft (MSFT).) As measured by audience size and profit (billions), ad revenue (hundreds of billions) and market capitalization and impressions (trillions), all the other media outlets combined aren’t nearly as big as the social media companies.

Adjudicating the frictions that arise from this unreconciled relationship—manifested for instance by whether Facebook et al. should be shielded by Section 230—is no easy matter, even for the likes of brainiacs such as Harvard Law School professor emeritus Larry Tribe who told me this week: “I think the time is ripe for really a full reconsideration of the intersection between the First Amendment and powerful, extensively private social media.” So what should we do, Larry? “I don’t know yet,” Tribe told me. “It’s one of the things that, if I look at my sort of intellectual agenda for the next 10 years, if I’m around for another 10 years, that’s one of the things I’m thinking about.”

Two current flash points are 1) Australia, where the government there is requiring Facebook and Google to pay publishers for news that it outs on their platforms (Imagine that.) And 2) Facebook’s oversight board which will rule soon on whether Trump will be allowed back on Facebook. Just to give you an idea of the lack of consensus there, I asked Tribe, who told me Trump should not be allowed back on, while Bill Gates told me: “I don’t think having him off forever would be that good.” That one will be worth watching.

But even if you reject the idea that social media is media (then why is it called social ‘media,’), tech is coming to dominate the media industry by other measures.

Which brings us to the second means of tech holding sway over media and that is simply buying news organizations. The examples here are high-profile and obvious: Laurene Powell Jobs and the Atlantic, Marc Benioff and Time Magazine, Jeff Bezos and the Washington Post. I guess you could include bio-tech billionaire Patrick Soon-Shiong buying the LA Times, as well as Facebook founder Chris Hughes’ brief ownership of The New Republic.

“Wealthy people who buy a publication do it largely because they believe in its mission and partly for prestige in the community or nationally,” says Rick Edmonds, media business analyst at Poynter. “They used to say of rich people buying papers, it’s more fun than having a bond. It’s kind of like owning a sports team.”

Ownership of these properties by tech billionaires now constitutes a significant slice of American news business and it’s likely we’ll see more of it in the years to come. After all, they are the wealthy people now. On the other hand, does buying one of these businesses really make sense? Many news organizations are fusty and unprofitable and besides there are other, vulture-like buyers circling, such as hedge fund Alden Global Capital which just bought Tribune Publishing this week.

That point segues to our third category of tech influence in media, which is instead of buying, DIY or building one of your own. Here we have the aforementioned Medium as well as First Look (which publishes The Intercept) created by eBay founder Pierre Omidyar. This group of companies isn’t neat and tidy grouping as many digital media or new media companies have mixed pedigrees, like Reddit funded initially by Y-Combinator, then bought by old-school media giant Condé Nast, then spun off and now funded mostly by, you guessed it, Silicon Valley VCs.

I should also make mention of my own organization, Yahoo, very much a creation of Silicon Valley, and ditto for sister publication TechCrunch, also owned by Verizon (VZ). Business Insider, Axios and Vox, to name just three, had blends of old media and Silicon Valley as investors. And of course there are hundreds of other media-like companies birthed in Silicon Valley such as Digg, Flipboard, Quora and so forth.

The startup cycle here is important to note. A few years ago it was generally accepted that the digital media boom was over. As growth slowed, valuations topped out for the likes of BuzzFeed, Vice and HuffPost, and VCs cut back on funding new ventures. That proved to be a false peak. Podcasts became all the rage and soon enough entrepreneurs founded scores of audio companies and platforms. And more than that a new wave of red-hot social media companies have taken the stage, most notably TikTok, which now has 1.1 billion monthly active users (MAUs), as well as much smaller but high-profile entities, Substack and Clubhouse. All three have deep Silicon Valley funding roots; TikTok’s parent ByteDance via Sequoia Capital China and Substack and Clubhouse through Andreessen Horowitz. (Other Silicon Valley and non-Silicon Valley investors have bought stakes as well.) Though it varies by company, these investors have a strong or even dominant influence on the workings of these platforms. And remember all those billions of eyeballs and dollars flowing to TikTok, Substack and Clubhouse come at the expense of traditional media.

Facebook co-founder, Chairman and CEO Mark Zuckerberg prepares to testify before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill April 11, 2018 in Washington, DC. (Chip Somodevilla/Getty Images)

Facebook co-founder, Chairman and CEO Mark Zuckerberg prepares to testify before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill April 11, 2018 in Washington, DC. (Chip Somodevilla/Getty Images)

More on Andreessen Horowitz in a moment, but first a bit more on the relationship between Silicon Valley and the media, because it’s become a hot-button issue for some very simple reasons which seem to get lost in the heat of the debate.

Historically, as in say before the 2016 election, tech companies were mostly covered by a small group of tech reporters. It was a pretty insular world, with the subjects and their Boswells more or less on the same page. There were hard-hitting stories and scandals, but the general idea that tech companies, while of course money-making ventures, generally had honest intentions and were even forces for good in society, was more or less accepted by many tech journalists.

But this changed over the past half decade, particularly as Google (GOOG, GOOGL), Facebook, Apple, Amazon (AMZN) and a revived Microsoft grew into global giants with tentacles reaching into all facets of society. Why did these halo-topped companies lose their luster? “There’s been this growing animosity between Silicon Valley and mainstream media,” says veteran business journalist Jim Ledbetter, chief content officer of Clarim Media, which owns Techonomy and Worth magazine, who for a time was the head of content at Sequoia. “I remember seeing that image of beat up Mark Zuckerberg on the cover of Wired [in 2018] thinking ‘wow.’”

There are bonafide reasons behind the shift in perspective. Societal conflicts like privacy and election integrity came to the fore. There were scandals at companies like Theranos and Zenefits. Employees at these tech giants—heretofore the happiest, most privileged people on the planet—began to agitate over issues like working conditions in warehouses, gender and racial equality and #metoo issues, and contracts with the Defense Department. Lawmakers took notice and began berating the companies. And journalists began to write stories about these issues, and new journalists without any historical knowledge or relationships (not that this should be a requirement) began to write about tech companies.

Now the bloom is off the rose. Increasingly Silicon Valley feels itself under attack, some even suggesting there is conspiracy by the media to write negative stories, a point of view shared on forums like the now defunct website Slate Star Codex, (The New York Times in particular seems to draw tech’s ire), engendering all manner of dust-ups on Twitter and now on Clubhouse too.

Behavior has changed. To be sure, some high-profile executives like Tim Cook, Satya Nadella, Mark Zuckerberg and Sheryl Sandberg still appear in traditional media, but increasingly, leaders like Larry Page, Sergey Brin, Jeff Bezos as well as Larry Ellison and Marc Andreessen, some of whom used to engage with media, are eschewing traditional news outlets.

And why not, particularly since they can now communicate without media filtering directly to audiences on Twitter, Medium, LinkedIn and Substack, platforms in which they either invested or whose founders or other investors they know well.

As for the animosity and finger pointing, not surprisingly, there’s truth on both sides while the extreme views are generally off-base. Fact: People in Silicon Valley want to make money and yes, want to change the world. They can be arrogant, clueless entitled and can act badly. They generally have good intentions but can create products which have negative consequences.

We journalists on the other hand want a story, not necessarily a good one or a bad one, just a story. Understand though that calling people out on hypocrisy and misdeeds is our job. And yes, we too can be arrogant, clueless, entitled and can act badly. Both sides probably have more in common than they realize or would like to admit.

Some journalists and some in Silicon Valley care more about this than others. And that brings us to Marc Andreessen, co-founder of the powerful VC firm Andreessen Horowitz, (whom I noted recently as possibly decamping from Silicon Valley.)

As I mentioned earlier, Andreessen is one of those Silicon Valley potentates who used to be much more public facing, but now he and his firm apparently aren’t doing interviews, reflecting the increasingly fraught relationship between media and technology, (see more detail in this piece). (A company spokesperson declined to make anyone available for this article.)

It’s a bit of a paradox because I’ve interviewed and spoken with Andreessen a few times over the years and I can tell you he’s someone who cares about media, and more than that is taking an active role in reshaping it as an investor and behind the scenes. “The running joke of the firm is that we’re a media company that monetizes through venture capital,” Andreessen told Wired in 2018.

“Every media company is a tech company now, and every tech company not only needs to have a PR wing but also produces its own content and manages user-generated content,” says Meredith Broussard, a data journalism professor at the New York University journalism school and author of, “Artificial Unintelligence: How Computers Misunderstand the World.”

Andreessen’s eyes were opened early on. Twenty five years ago to yesterday, (2/19/96), Time Magazine put then 24-year-old Andreessen on its cover, barefoot on a throne-like chair with the cover line: The Golden Geeks: “They invent. They start companies. And the stock market has made them Instanaires. Who are they? How do they live? And what do they mean for America’s future?” At that point Andreessen, co-founder of Netscape, was riding high after that company’s IPO from the year prior.

By 2009 Andreessen and his partner Ben Horowitz founded their eponymous firm, (also known as “a16z”) which I remember well as I was editor of Fortune at the time and we did an exclusive cover story on the firm’s launch. Two years later Andreessen penned his famous “Why software is eating the world” op-ed for the Wall Street Journal.

Andreessen, through his familiar @pmarca twitter handle, practically invented the tweetstorm seven or eight years ago. Bloomberg counted that he tweeted over 20,000 times in the first half of 2014, which was right around when Twitter went public (November 2013), a company in which a16z had invested.

Twitter is hardly the only digital media company a16z has had stakes in. Here’s just a partial list: Facebook, BuzzFeed, Pinterest, Reddit, Medium and Digg as well as newer investments like Substack and Clubhouse. (To be clear, this is just a sliver of the 890 investments a16z has made, according to crunchbase, but it’s substantial within that industry.) BTW, nowadays Andreessen doesn’t tweet so much, and when he does, lately it’s been about appearing on Clubhouse.

It’s worth noting too that a16z has had a significant in-house content, or content-marketing effort for some time now. Six years ago the firm hired Sonal Chokshi from Wired to be its editor-in-chief. The company produces all manner of articles, videos, podcasts and newsletters. Given where a16z sits and the brainpower there, it makes sense that some of it is revelatory. Some of it though is preachy, lost in the weeds and axiomatic.

Now a16z is stepping up its media presence even more, announcing late last month that it is “building a new and separate media property about the future that makes sense of technology, innovation, and where things are going…expanding and opening up our platform to do this on a much bigger scale.” The firm hired Maggie Leung from NerdWallet as executive editor apparently to manage the operation.

The announcement goes on to say a16z will welcome contributions for articles, op-eds, newsletters, video and more, even offering pitch guidelines. But just when you think, wow, maybe a16z really is creating a traditional media company you come across this line: “Our lens is rational optimism about technology and the future.” Ahh. A risk here is creating content only for the Silicon Valley echo-chamber.

“Companies have always put out content,” says Broussard. “There have always been corporate magazines — Amtrak magazine, and other magazines put out by corporations. Nobody thinks Amtrak magazine is going to destroy democracy.”

“Marc has always been good at media,” says a former a16z person. “Ben’s a good writer and other people there are great at social and creating content. Now they feel they can go out on their own, which may or may not be true depending on what kind of audience and impact they want.”

Here’s where I come out on all this. First regarding a16z: It’s too bad people there don’t talk to the media anymore, but that’s their prerogative. It’s also their prerogative to create as much content as they want. Just don’t call it journalism, (not that a16z has) which would allow for the creation of content critical of the firm, its portfolio companies or tech in general. It sounds like that won’t be happening, although who knows. As far as a16z’s investing in media companies, more power to it for doing so, and more power to Marc and Ben for using and promoting these companies.

When speaking to Bill Gates this week I asked him if he ever thought about investing in or buying a media company like Jeff Bezos. Not interested. “I’m glad somebody is providing long term capital for great interactive news, but I don’t see myself [doing that.] I’ve gotten pretty full up,” Gates said.

Part of Gates being full up is a massive, traditional media campaign for his new book “How to avoid a climate disaster,” which includes him doing interviews, (including with schlubs like me), which may result in stories where he is criticized or even where journalists play gotcha or twist his words. I’ve asked Gates about this and he essentially says it comes with the territory. Meaning if you want to reach as many people as possible, you have to put yourself out there and absorb the slings and arrows from The New York Times and others.

I was thinking about Gates’ influence when I noticed he has 53.7 million followers on Twitter. As for Marc Andreessen, he has 813,000. Of course it’s just one metric, but on Twitter at least, Bill is some 66 times more impactful than Marc. To be sure, Gates does have the advantage of being the richest guy on the planet for many years, but Andreessen has some world-beating ideas too. Maybe Andreessen doesn’t care if he reaches a wider audience, but if he does, it may be difficult to do so inside the ecosystem of a16z.

This article was featured in a Saturday edition of the Morning Brief on February 20, 2021. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.

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