News Corp. Chief Executive Officer Robert Thomson recently started increasing the pressure exerted on Facebook and Google over the share of the advertising revenue the two Silicon Valley giants are giving to their media partners on whose content they continue to rely on to boost their user engagement rates. In a recent interview with Bloomberg, Mr. Thomson said social media companies have been systematically taking advantage of news publishers for years by leveraging their content to improve the performance of their own platforms and consequently eat into the industry's digital advertising revenues.
Google and Facebook presently account for the vast majority of the digital advertising market in the United States and are expected to continue strengthening their leadership going forward, thus taking even more revenue from news publishers. Facebook's recent decision to revamp its News Feed also reduced media companies' reach, being yet another move that agitated the industry, which only strengthened Mr. Thomson's efforts to advocate for improved news licensing contracts with tech giants. The executive believes there shouldn't be a difference between acquiring the rights to share sports broadcasting and quality journalism, vowing to collaborate with the Silicon Valley on the matter if the likes of Google and Facebook agree to share more revenue with the media industry. The possibility of that happening remains relatively slim as the digital media is now refocusing its efforts on paywalls instead of allowing Internet firms to use its content at little to no cost.
Mr. Thomson isn't the only executive in Rupert Murdoch's media empire who's been extremely critical of Google and Facebook's business practices in recent years. The media mogul himself has already been pressuring the Silicon Valley to cut larger checks to news publishers for nearly a decade and is growing more concerned about the tech giant's diversification efforts. That state of affairs is said to have partially prompted Mr. Murdoch's decision to agree to sell 21st Century Fox to Disney as the multi-billionaire is understood to be skeptical about his corporation's ability to compete in bidding wars for content rights once juggernauts such as Amazon, Google, and Facebook start targeting the same programming, which already started happening with select sports coverage.