Putting Some News In Our News Feeds – Facebook (FB)

Picking up some news as an afterthought remains a familiar practice even in the digital age, whether it’s grabbing a New York Times with your Starbucks or a USA Today while waiting to board an airplane.

For a company with deep pockets, CNN may become the next great news impulse buy.

Rupert Murdoch has made a bold, $75 billion bid for Time Warner. While the purchase is far from a certainty, one of the many possible side effects of such a deal would be CNN going up for sale, in order to avoid antitrust problems due to conflicts with Fox News. CNN’s sale, if it happened, could fetch an estimated $6 billion to $8 billion, an unnamed person familiar with the matter told Bloomberg.

Speculation abounds regarding which company would want to pick up CNN, should the cable network become available. Popular guesses include CBS, Disney and Yahoo. Google, while less likely, has also been mentioned as a contender; Porter Bibb, managing partner at Mediatech Capital Partners, pointed out that the network could be a perfect complement to Google-owned YouTube.

This speculation got me thinking: What about Facebook (FB)?

Facebook announced earlier this year that it would acquire WhatsApp for $19 billion. That price was around three times the estimated value of CNN, for a company that had, at most, $300 million in revenues at the time the deal was announced. I have no opinion about the WhatsApp deal, mostly because I have almost no idea what WhatsApp does. (At my age, this ignorance is permitted, though not encouraged. Thanks to Google I understand, vaguely, that WhatsApp lets users send messages and share information, which I thought I was already doing.) I do know, however, that CNN has real viewers and makes real, though not vast, profits.

I spend a big portion of each day gathering information. I troll a variety of news sites to find out about things that are important to me. I also check Facebook to find out about people who are important to me. Because those people often share and comment upon news items, and because I sometimes react to the things they share, Facebook undoubtedly already has some idea which topics are important to me. If Facebook wanted to save me the trouble of scanning six news sites a day, I’d be happy to tell them more.

It has long been a given that Facebook wants to know as much as possible about what its users do all over the Internet. And of course Facebook wants to maximize the amount of time its users spend on Facebook itself. So why wouldn’t Facebook want to get into the business of providing me with news that I, in turn, might share with my friends? It would mean my friends and I would all spend more time on the social network, which is exactly what Facebook and its advertisers ultimately want.

Facebook also has a history of acquisitions, not all of which were intuitive from the outside. In a smaller deal than its WhatsApp purchase, the company acquired virtual reality start-up Oculus VR earlier this year. Bystanders have guessed that the acquisition was everything from a vanity purchase by CEO Mark Zuckerberg to a long-term attempt to develop a Google Glass competitor. Either way, Facebook has demonstrated that it is willing to reach outside its existing model. Comparatively, a news organization would not be much of a stretch.

Zuckerberg is a bright guy who has some cash at his disposal. He doesn’t need me to tell him how to spend it. If he can snag CNN for, say, $7 billion, it would be roughly the equivalent of me picking up People magazine at the checkout counter. (In my case, just a copy of the latest issue, not the actual publication itself.) If CNN catches Zuckerberg’s eye, there is no doubt he’ll know what to do with it.

So it wouldn’t shock me if Facebook got into the news business. It would seem to be one of the more logical ways for the social network to go about filling its users’ news feeds.

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About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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