NewsGuard, the US-based online service that rates and ranks news websites for credibility and transparency, is believed to have been put up for sale.
It was launched in 2018 by Steven Brill (founder of American Lawyer and of Court TV) and Gordon Crovitz, former publisher of The Wall Street Journal. It seeks to address the declining trust in mainstream media and the proliferation of fake news that masquerades as legitimate: “We tell you if a site is reliable as you browse online news”.
It is almost too neat a coincidence that the startup is inviting bidders during the run-up to a US Presidential election in which the incumbent regularly describes media criticism as “fake news”. But the sale process also comes just a few months after NewsGuard launched a subscription membership scheme priced at $2.95/ £2.95/ €2.95, which may have enabled it to hike future revenue projections substantially from 2021. The site is believed currently to have revenue of less than $1 million.
Until now, NewsGuard’s revenue has come from ISPs, browsers, search engines and social platforms which have paid to use the ratings in the news feeds and search results served up to customers. News sites themselves do not pay for the service.
Much of the $6 million launch funding came from Publicis Groupe and the 70-year-old Knight Foundation which supports journalism. But a group of individuals have also been supporting NewsGuard including Nick Penniman (co-founder of HuffPost), US politician Tom Ridge, and former Thomson Reuters CEO Tom Glocer. The two founders Brill and Crovitz are believed to own a majority of the shares.
NewsGuard employs some 35 journalists who review and publish labels on news sites based on nine journalistic criteria including whether the information is presented responsibly, whether errors are routinely corrected, and whether site ownership is disclosed. Each item gets a red (fail) or a green (pass) icon next to every news source, denoting whether it is trustworthy or not. The service has added a reliability score of 0-100 for each site based on its performance on the nine criteria: “We’ve always said that not all Greens (or Reds) are the same; now, you’ll see the numbers”.
Steven Brill, whose recent book “Tailspin” claimed core American systems were breaking down, has said: “We’re trying to be the opposite of an algorithm. We see ourselves as the logical, classic, free market American way to solve the problem of unreliable journalism online.”
NewsGuard’s decision now to seek major new investment or an outright sale may (like the ‘new’ membership business model) reflect the tough learnings of its first two years. The big question is whether consumers really will subscribe in sufficient numbers, even though NewsGuard ratings cover more than 5,000 web sites accounting for 95% of engagement with news in the US, UK, France, Germany and Italy.
Some would-be buyers might find NewsGuard a bit of a challenge. After all, it is only 18 months since the UK’s biggest newspaper site, the Daily Mail, was given “a red” for its content. It was promptly changed to “green” after protests from, and discussions with, Mail executives – despite NewsGuard’s criticism of deceptive headlines, some false content and apparent conflicts of interest. No comment.