Just how important are social media and online video to the futures of old-line newspaper companies? Consider this: Rupert Murdoch's News Corp just spent $25 million to acquire a startup it calls a "social news agency."
The five-year-old startup, called Storyful, identifies, verifies and shares news videos and photos -- often from eyewitnesses at the scenes of breaking news -- that pop up on Web sites like YouTube and Facebook.
News Corp(NWS) and many of its news media rivals use Storyful to find worthwhile videos and obtain the rights to republish them. They also get guidance from Storyful about what videos are fake or misleading -- thereby helping news organizations avoid embarrassing mistakes.
"We discover and verify the most valuable content on the social web," Mark Little, the chief executive of Storyful, wrote in a blog post. "We help the world tell its stories in the first person."
Those capabilities are valuable to News Corp as it tries to counter declines in its core print newspaper businesses with new revenues from online video.
In June Murdoch's global television and film businesses like Fox News and Fox Sports were spun off into a new entity named 21st Century Fox; his newspapers, including The Wall Street Journal and the New York Post, remained a part of the now-much-smaller News Corp.
So the pressure is on to prove that the "new News," the publishing business, can thrive on its own.
That's why it is noteworthy that Storyful is the new News Corp's first acquisition. (It couldn't be more different from the old News Corp's ill-fated acquisition of MySpace in 2005 for $580 million.)
News Corp CEO Robert Thomson has spoken in recent months about a "transformation" of the company that turns its print newspaper brands into Internet "platforms" for information.
News Corp says it will operate Storyful, which is headquartered in Dublin, Ireland, as a standalone company. Little and executive editor David Clinch will remain in charge of the operations.
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In a sign of the new owner's intentions, the senior vice president of video for News Corp, Rahul Chopra, will have a second title now: chief revenue officer of Storyful.
News Corp executives emphasized that Storyful would continue to provide its video verification know-how and distribution technology to competitors like the New York Times(NYT) and the BBC. Time will tell whether those rivals will continue to work with Storyful once it is owned by News Corp. A spokeswoman for News Corp said the new owner would "bring more resources to partners."
For his part, Little said he perceived News Corp to be a big company "prepared to think like a startup." He made an observation that would have been scoffed at a few years ago, perhaps even by himself: "Social journalism is no longer a problem for the news industry ... it is a solution."