Startup that evaluates credibility of news says it’s making a profit

NewsGuard, a four-year-old startup that scans the Web and rates the credibility of news sources, says its own business is reliable enough to turn a profit.

Thanks to licensing deals with advertisers and other firms that use its ratings, the company more than doubled its revenue in 2021.

NewsGuard is now expanding into new territories, such as ratings for individual television shows, and new markets including Canada, co-CEOs Steven Brill and Gordon Kravitz said in a joint interview.

“To the extent we can empower people with more information about which sources are trustworthy and the extent to which we can help prevent advertisers from subsidizing misinformation on the Internet, we think We can make a real contribution to building more trust in the news environment. Sources that deserve trust,” Kravitz said.

CNN Business reviewed the company’s profit and loss statement and year-end reports from Brill and Kravitz to the NewsGuard board. Documents suggest that NewsGuard “began breaking into the black in 2021,” as the pair wrote, and is on a permanent footing for 2022. Officials said they expect to be profitable in all four quarters of the year.

“We think it’s important that we did it as a for-profit business that can be viable, that shouldn’t depend on, you know, the kindness of strangers,” Brill said. “My own view is that this is the path journalism needs to take – to find business models that work.”

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

The mission hasn’t changed since then: to evaluate sources for trustworthiness and to give people the tools Navigate the Information Universe,

Some of NewsGuard’s approximately 40 employees meet through websites, apply the same political criteria to each outlet, and create “nutrition labels”. Criteria include clearly labeled advertising, a lack of “misleading headlines”, a correction policy, and contact information.

Although there are many questions with specific judgments about some sites, the results are outright credible, with typical global newsrooms attempting to report objectively from night-flying sites that publish propaganda regardless of reality. We do.

Brill said NewsGuard was created to “do what librarians do, which gives people some sense of credibility and credibility and the background of the people who are feeding them news.”

He and Krovitz reported that about 40% of the sites that NewsGuard scrutinized so far have received a red rating—the equivalent of a red traffic light for a driver.

“It looks like we’re being too strict,” Brill said, but “really, you have to be really, really bad to be red.”

Many low-quality news sites receive relatively low scores from NewsGuard analysts, but are still in the green overall.

“What really surprised us, ever since we started the company, is just the spread, especially around Health careOf the hoax sites that are really in it for the money. They’re in it for the advertising revenue,” Brill said.

With this in mind, NewsGuard has established several different areas of business. Advertising agencies and advertisers use company findings to ensure that they are not accidentally sponsoring websites full of spam and smears.

“You have drug companies, you know, vaccine companies, whose ads are ending up on health care fraud sites,” Brill said, and NewsGuard offers a solution.

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

The biggest conceivable opportunity for the company is in Silicon Valley. To date, giants like Facebook and Twitter NewsGuard’s rating is not included in its system. But Microsoft, a big tech player, has licensed the ratings for users of its Edge browser.

For others, “we think eventually they’ll strike licensing deals,” Krovitz said, adding that “there’s a lot of pressure on them to clean up their act.”

When asked whether NewsGuard was sharing its profitability milestones partly to encourage the tech platform to get on board, Brill said the company is “certainly telling them that, you know. , We are not going away.”

Meanwhile, NewsGuard’s pitch is something that would seem incredibly incompetent to Big Tech: “We use human intelligence, not artificial intelligence,” quipped Kravitz.

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