Not All Big Tech Is The Same

The showdown down under is heating up. Earlier this week, Google agreed to pay tens of millions of dollars to big news organizations to get ahead of a new law in Australia that would force them to do so. Facebook, on the other hand, dug in its heels and said, "No."

Facebook and Google's vastly different reactions to this pending legislation highlights a mistake many make by using a term like "big tech" to describe Facebook (FB), Amazon (AMZN), Google (GOOG, GOOGL), Microsoft (MSFT), Apple (AAPL), and other "household name" tech companies. The only thing these companies have in common is that they translate data into wealth. Other than that, their business models and priorities are entirely different.

Facebook is a social network using data to promote engagement. The data it uses is user-curated and user-created. Facebook does not care where this data comes from. Real news, fake news, your crazy conspiracy theory, someone else's crazy conspiracy theory… as long as you will engage with it (and it puts you in the mood to click on an ad), it's OK with Facebook. You can say Facebook collects and acts on data that describes your aspirations.

Google is an advertising optimization engine that collects and uses data that describes your intentions. For Google, credible news from credible sources is key; it can't organize the internet if it doesn't have all the information it needs to do so.

Characterizing this fight as "Google is willing to pay, but Facebook is not," is factually correct, but there's much more to the story.

Here's what the NY Times had to say about the story:

Facebook Blocks News in Australia, Diverging With Google on Proposed Law

With Australia moving to make the tech companies pay for news, Facebook took a hard line, while Google has struck deals to pay publishers.

SAN FRANCISCO — For months, Facebook and Google have been locked in a stare-down with news publishers and lawmakers in Australia.

At the heart of the fight is whether the tech giants should pay news organizations for the news articles that are shared on their networks. Under a proposed law from the Australian Competition and Consumer Commission, both Google and Facebook would be required to negotiate with media publishers and compensate them for the content that appears on their sites.

Facebook and Google have fought hard to prevent the Australian law — which is expected to pass this week or next — from forcing their hands. But on Wednesday, the two companies sharply diverged on how to head off that regulatory future.

Google began the day by unveiling a three-year global agreement with Rupert Murdoch’s News Corp to pay for the publisher’s news content, one of several such deals it has announced recently where it appears to be effectively capitulating to publishers’ demands. Hours later, Facebook took the opposite tack and said it would restrict people and publishers from sharing or viewing news links in Australia, in a move that was effective immediately.

In conciliatory language toward publishers, Don Harrison, president for global partnerships at Google, said that the company had invested to help news organizations over the years and that it hoped “to announce even more partnerships soon.”

Facebook struck a distinctly different tone...

Continue reading at NY Times.

Shelly Palmer is Fox 5 New York's On-air Tech Expert (WNYW-TV) and the host of Fox Television's monthly show Shelly Palmer Digital Living. He also hosts United Stations Radio Network's, ...

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