Big Tech throws money at the local news problem

Illustration: Aïda Amer/Axios

Major tech companies and moguls are pouring lots of money into initiatives to support quality journalism, after months of bad headlines about fake news and the longer-term struggles of business models for journalism, especially at the local level.

Why it matters: The efforts are meant to show tech's support for quality journalism, even though its products and business models often feel at odds with fostering a quality news ecosystem.

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Microsoft President Brad Smith discussed the topic with Axios' Kim Hart at an editors' gathering in Redmond, Wash....

"I think we should all care about high quality journalism. ... I keep hoping that we’re gonna see the journalism profession come out the other end. Remember, a decade ago, people were saying, 'Gee, there’s no future in high quality audio visual entertainment.' It [was] being decimated by cable and then a new business model emerged."

Driving the news: Facebook says it's granting $300 million to news programs, partnerships and content over the next 3 years, matching Google's commitment of $300 million towards news initiatives last year and following Craig Newmark's $20 million donation to the CUNY Journalism School.

• Facebook's project is meant to support local journalists with immediate newsgathering needs while helping them build long-term sustainable business models, on and off its platform.
• Facebook says it's targeting local news because it became evident it would have the biggest impact in this sector after working with publishers via its accelerator programs.

What's new: WordPress, the content management tech company owned by web development giant Automattic, is also investing six figures in The News Project, Axios has learned.

• On Monday, WordPress also announced the launch of Newspack, a publishing platform aimed at local news outlets that's backed by Google, the Lenfest Institute, the Knight Foundation, and others.

Be smart: In many cases, it's a mutually beneficial relationship. Tech companies need quality local news to drive community engagement and trust, while local news companies could use help from tech leaders to support innovation.

"Tech leaders recognize the promises of technology better than anyone. They are increasingly aware also of the challenges — from misinformation to declining trust in media — that while not new, are being propagated at record speeds due to the pace and growth of the changes in our media ecosystem."

Jennifer Preston, VP for journalism, Knight Foundation

Between the lines: While the news industry welcomes these contributions, it will be difficult to reverse the tense relationships tech companies, and in particular Facebook, have had with publishers.

• Many in the industry feel as though tech platforms have taken away a lot of ad revenue that used to fund high-quality newsrooms and have allowed low quality news to thrive on their platforms.

"There's a lot of critics out there in the local media space and there are a lot of bad feelings about algorithm changes Facebook made made last year. But local media still recognizes the need work with platforms and be more collaborative."

Nancy Cawley Lane, president, Local Media Association

Yes, but: Local news publishers have traditionally had a more welcoming relationship with technology companies than larger national publications.

The bottom line: These efforts are often opportunistic investments, just as much as they are philanthropic efforts.

Go deeper: Where the death of local news hits hardest