Monday, June 5, 2023

Startup that evaluates the reliability of news sources says it’s profitable

NewsGuard, a four-year-old startup that scans the internet and evaluates the reliability of news sources, says its own business is reliable enough to be profitable.

The company more than doubled its revenue in 2021 year-over-year thanks to licensing deals with advertisers and other firms that use its rankings.

NewsGuard is currently expanding into new areas, such as ratings for individual TV shows, and new markets, including Canada, co-CEOs Steven Brill and Gordon Krovitz said in a joint interview.

“To the extent that we can give people more information about which sources are trustworthy, and to the extent that we can help advertisers stop subsidizing misinformation online, we think we can make a real difference to the news environment and increase the credibility of trustworthy sources,” Krovitz said.

CNN Business reviewed the company’s earnings and loss statements, as well as Brill and Krovitz’s year-end report, before the NewsGuard board of directors. The documents show NewsGuard “began to go positive in 2021,” the couple wrote, and is in a strong position by 2022. Executives said they expect profitability in all four quarters of the year.

“We think it’s important that we do this as a commercial business that can be viable, that doesn’t have to depend on, you know, the kindness of strangers,” Brill said. “I believe that this is the way that journalism should go – to find working business models.”

When the company was founded in 2018, Axios reported that NewsGuard had raised $6 million from investors.

Since then, the mission has not changed: evaluate sources for their reliability and give people the tools to navigate the information universe.

Some of NewsGuard’s nearly 40 employees surf the web, apply the same apolitical criteria to every publication, and create nutrition labels. Criteria include clearly labeled advertising, no “deceptive headlines”, a correction policy, and contact information.

While there is a lot of nit-picking about specific site-specific solutions, the results are solid, distinguishing global newsrooms that try to report honestly from fly-by-night sites that publish propaganda without regard to reality.

Brill said that NewsGuard was created “to do what librarians do, which is to explain to people something about the reliability, trustworthiness and backstory of those who feed them news.”

He and Krovitz noted that nearly 40% of sites NewsGuard has checked to date have received a red rating, the driver’s equivalent of a red traffic light.

“We seem to be pretty strict,” Brill said, “but you really have to be really, really bad to get red.”

Many low-quality news sites receive relatively low ratings from NewsGuard analysts, but generally remain green.

“What has really shocked us since we started the company is the proliferation, especially in the healthcare industry, of scam sites that actually exist for money. They do it for the ad revenue,” Brill said.

With this in mind, NewsGuard has created several different lines of business. Advertising agencies and advertisers use company data to make sure they don’t inadvertently sponsor websites full of spam and slander.

“You have pharmaceutical companies, you know, vaccine companies, whose ads end up on healthcare scam sites,” Brill said, and NewsGuard comes up with a solution.

Researchers and academic institutions also license information. And some government agencies subscribe to the company’s “disinformation fingerprints”.

The biggest conceivable opportunity for a company is in Silicon Valley. To date, giants such as Facebook and Twitter have not incorporated NewsGuard ratings into their systems. But one major tech player, Microsoft, has licensed ratings to users of its Edge browser.

For others, “we think they will eventually” get licensing deals, Krovitz said, noting that “there is a lot of pressure on them to correct their actions.”

When asked if NewsGuard is sharing its profitability milestone in part to encourage tech platforms to join us, Brill said the company is “definitely telling them that, you know, we’re not leaving.”

Meanwhile, a NewsGuard presentation would have seemed incredibly ineffective for Big Tech: “We use human intelligence, not artificial intelligence,” Krovitz joked.

World Nation News Desk
World Nation News Desk
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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