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Here are some of the big names who invested in Theranos

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Rupert Murdoch

When Theranos was at its prime, it attracted funding from big-name investors who poured millions into the blood testing startup. Now, we're learning for the first time who some of those investors are, and who stands to lose big if the startup can't be turned around.

The Wall Street Journal reports that Rupert Murdoch, Cox Enterprises, and Riley Bechtel of Bechtel Group, one of the largest construction companies in the world, were among Theranos' early investors. Murdoch and Cox each put $100 million into the company during its most recent funding round of $632 million, which came to a close in 2015, according to The Journal. 

Murdoch is the executive chairman of the Journal's parent company, News Corp. In an interesting twist, The Journal was the first publication to report on trouble at Theranos in October 2015.

Theranos remains mired in legal battles, including a $140 million breach of contract suit filed by Walgreens earlier this month and a new lawsuit filed Monday by Robert Colman, cofounder of San Francisco investment bank Robertson Stephens & Co. The suit alleges that Theranos was misleading its investors and making false claims about its technology, according to the Journal

Theranos also shut down its lab operations in October after the accuracy of the test was called into question, cutting 340 jobs and closing the Wellness Centers where blood tests were performed. Theranos CEO Elizabeth Holmes is now banned from the lab-testing industry for the next two years. 

That setback, plus what will likely be expensive legal battles as Theranos fights the Walgreen suit, are likely to cost the company millions. The startup was once valued at $9 billion and, according to Pitchbook, has raised more than $750 million to date.

SEE ALSO: The rise, fall, and pivot of Theranos, in one graphic

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WSJ's hiccup on Google holds lessons for all publishers (NWSA, GOOGL)

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Share of the Digital Ad Pie

This story was delivered to BI Intelligence "Digital Media Briefing" subscribers. To learn more and subscribe, please click here.

After blocking free access to its site via Google in February, The Wall Street Journal has enjoyed a fourfold increase in conversion rates of visitors into paying subscribers, but also suffered from a 44% decrease in referral traffic from Google, Bloomberg reports.

The WSJ’s experience with hardening its paywall vis-a-vis Google provides lessons for all digital publishers seeking to balance free, ad-supported traffic with more reliable subscription revenues:

  • Hiding content behind paywalls results in a decline on Google search results. The WSJ’s search ranking dropped because Google’s crawlers — the bots that scan the web — could not browse the content that was hidden behind the paywall. The search engine could only index the first few paragraphs that were freely available in the preview of the article, causing the WSJ’s ranking to be lowered, and viewership via Google to fall. 
  • Metered paywalls provide a workaround, but they can also be worked around. Many premium publishers with let people read a few articles for free when accessing their site via Google. This tactic allows them to maintain their ranking in Google’s search results and encourage readers to sign up for full subscriptions. But metered paywalls can be easily duped and reset by clearing browser cookies. The WSJ blocked Google users from reading free articles when it found that close to a million people a month were abusing its three-article limit.
  • The WSJ mitigated the loss in traffic via Google by leveraging social platforms. Social media visits to the WSJ grew 34% since it blocked free access for users arriving via Google search, helping to keep overall traffic and ad revenue flat. This statistic points to the effectiveness of social media in driving readership. Web analytics firm Parse.ly supports this viewpoint; it found that Facebook and Twitter, respectively, accounted for 41% and 2.8% of external traffic referrals through May, with Google accounting for 34%.
  • Social platforms seem to be more effective marketing tools than Google. According to the WSJ’s experience and Parse.ly’s data, Facebook drives substantially more traffic to publisher websites than Google, suggesting that metered paywall strategies may be more effective on the social platform. Whether this strategy makes sense for any given publisher will depend on where their traffic is coming from.

The precariousness of digital advertising makes it essential for publishers to have a subscription strategy. Facebook and Google dominate the space, with both companies accounting for nearly 85% of US internet ad growth in 2016, up from 76% in 2015, according to the 2017 Internet Trends report. Meanwhile, brand advertisers are becoming more vigilant, reducing costs, and calling for more oversight into their digital campaigns. Amid this, subscriptions provide steady, repeated, and long-lasting stream of revenue.  

To receive stories like this one directly to your inbox every morning, sign up for the Digital Media Briefing newsletter. Click here to learn more about how you can gain risk-free access today.

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Lachlan Murdoch of 21st Century Fox and News Corp. to speak at IGNITION 2017

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Lachlan Murdoch

Want to stay up to date with this year's IGNITION conference and all things media? Subscribe here to receive our free weekly IGNITION newsletter.

Business Insider is excited to announce that Lachlan Murdoch will speak at IGNITION 2017: The Future of Media.

Lachlan, the son of media mogul Rupert Murdoch, serves as the executive chairman of 21st Century Fox, the executive cochairman of News Corp., and the executive chairman of Nova Entertainment Group.

Since taking over for their father two years ago, Lachlan and his brother, James, who serves as the CEO of 21st Century Fox, have made maintaining a positive company culture a priority. There may not be a better example of this than the firing of Fox News' superstar host Bill O'Reilly earlier this year after a multitude of sexual-harassment allegations became public.

We are thrilled to hear Lachlan's thoughts on the future of media given his extensive experience leading one of the most successful media empires on the planet. We can't wait to hear his thoughts on the effects of the struggling cable industry and the plateauing movie-theater industry on 21st Century Fox's business as well as on News Corp.'s continued push into the digital world.

Lachlan joins HBO CEO Richard Plepler and Verizon executive Marni Walden as speakers at this year's IGNITION conference. We will continue to announce new speakers throughout the summer, so continue to check in to see who else will be attending.

Attend IGNITION 2017: The Future of Media

Business Insider IGNITION 2017 will take place November 29-30 at the Time Warner Center in New York City. Don't miss out on an opportunity lock in your discounted Early-Bird or group rates to hear from the most influential people in media!

 

Register Today!

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The Tab's CEO went straight from Glastonbury to pitch the youth media site to Rupert Murdoch while hungover — and it worked

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Tab CEO Jack Rivlin

The CEO and founder of youth media site The Tab recently had a high-stakes meeting with one of the most powerful media owners on the planet.

But rather than rehearsing his lines, finessing a slideshow or working out strategies to charm News Corp chairman Rupert Murdoch, Jack Rivlin spent the preceding weekend at Glastonbury.

When he showed up the following morning at Murdoch's British HQ, the glass-clad News Building by London Bridge, Rivlin was still picking glitter out of his hair, wearing borrowed shoes, and nursing a hangover.

None of this prevented him, alongside co-founder George Marangos-Gilks, from securing Murdoch's backing as the lead investor in a £4.5 million ($6 million) round of funding announced this week.

The money will help hire more staff and bolster The Tab's network of youth-focused sites, which consist of volunteer campus editions in the US and UK, professional staff in London and New York, and a women's sub-section called babe.

Rupert Murdoch

In an interview with Business Insider, Rivlin described how he won Murdoch over by appealing to his credentials as a news man, showing him a book of cuttings filled with print-outs of Tab stories that made a big splash.

They included an exclusive story that Malia Obama was headed for Harvard, and in the UK damning footage of a Cambridge student setting a £20 note on fire in front of a homeless man.

The Tab site September 7 2017

During the US presidential election Tab reporters reported extensively on Bernie Sanders' increasing popularity with young people, and managed to get an answer out of then-candidate Donald Trump at a campaign event.

In the UK, The Tab got exclusive access to Labour leader Jeremy Corbyn, convinced David Cameron to write an article for them, and became the stars of an embarrassing photo op with Ed Miliband.

Rivlin said: "Rather than going in with a slide deck I wanted to show what makes us really unique. I printed out all the big scoops we’d done over the last couples of years and slapped that on their desk — it was Rupert Murdoch, [News Corp CEO] Robert Thompson and [News UK COO] David Dinsmore."

"They loved it, we shook on investment after 45 minutes.

"We came straight out of Glastonbury and had left the day before. I had to borrow some shoes from my friend’s dad, we still had glitter on us. It’s just about the only time I've ironed a shirt."

Tab Media US office

Rivlin declined to specify how much Murdoch's News Corp invested, but said they were the lead in a £4.5 million round made up of several investors.

The latest round means Tab Media, the site's UK-based parent company, has taken a total of £7.63 million ($10 million) of private investment.

He said the attraction of his website — as opposed to other "millennial" outlets — is that the content is written by people who really understand their audience, because they are the same age as them.

He said: "The average age is 23, for our editorial staff. [Campus editors and reporters are younger.] If you put those guys in charge it’s chaotic and you get something pretty unvarnished. It also helps that they're always up for a scrap."

Full disclosure: I edited a campus edition of the Tab as a student in 2012, and am no longer involved.

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The CEO of Unruly, which just sold to Rupert Murdoch for $176 million, told us why the acquisition is such a huge deal

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rebekah brooks rupert murdoch

Rupert Murdoch's News Corp snapped up video ad tech company Unruly for $90 million in cash, plus up to $86 million if the London-based startup meets performance targets, on Wednesday.

Speaking to Business Insider, Unruly's co-CEO and cofounder Sarah Wood explained how the deal is huge for two reasons: for News Corp, but also what it signals for the wider media and advertising landscape.

Unruly specializes in serving and analyzing video advertising and brand videos that appear outside of the confines of YouTube and Facebook. Its technology allows marketers to buy "native" video ad formats using automated (known as "programmatic") means, track the performance of their video content across social, and it has an analytics tool that predicts whether videos are likely to go viral.

As part of the deal, Unruly cofounders Sarah Wood, Scott Button, and Matt Cooke will work for News Corp, although the company will operate as a separate business unit and remain in its east London headquarters. The three cofounders will report directly into Rebekah Brooks, who recently returned for her second stint in the role of News UK chief executive.

Unruly will increase News Corp's revenue "from day one"

Unruly's role will be to help News Corp's properties across the globe — from The Sun newspaper in the UK, to Fox Sports, The Wall Street Journal, and HarperCollins Publishers — better monetize their websites through video ads.

Marketers are crying out for premium video ad inventory because it harnesses the sights, sound, and motion of TV ads, but with better measurement and targeting options — but there's simply not enough of it to fulfill demand.

News Corp is hoping the deal will help it increase that supply. Unruly's performance goals are simply to deliver the three-year plan it already had in place: to roll out new native video formats, to grow geographically, acquire tech, and work with premium video publishers. News Corp's properties benefit from the growth of all of those areas — even the fact that Unruly will continue to work with other publishers, because that help improves the ad tech company's analytics and targeting engines (although who knows how long those other publishers will stick around and let News Corp take advantage of their data.)

Wood told Business Insider: "This is a catalyst deal for News Corp to accelerate their digital transformation."

Indeed, even News Corp executive chairman Rupert Murdoch tweeted about the deal, the company's largest UK acquisition since the News of the World phone-hacking scandal.

How the deal came about

The seniority of News Corp staff involved in sealing the deal appears to attest to Wood's claim that this is a major deal for the company — not just a tech bolt-on.

Brooks spent months "traveling all corners of the globe" to find a suitable tech target. 

Unruly hadn't actually been looking to sell, despite receiving interest from many suitors. The company had received $25 million in total venture funding and grew revenues by 23% year on year to $42 million in 2014.

Wood's first conversation with News Corp came with the company's chief data scientist Rachel Schutt, when they both appeared on stage together at a TechCrunch event in November. Wood said it was immediately clear they shared a "passion" for data insight and bridging the gap between content and ad tech.

Schutt then introduced Wood to Rahul Chopra, the CEO of Storyful, the social news agency which News Corp acquired for $25 million back in 2013. They too shared an interest in how data can be used to target people with content that is most likely to strike an emotional connection with them.

"The next thing I know, Rebekah [Brooks] turned up at our offices," Wood said, adding that this happened "a few months back," when Brooks was working in a consultancy role for the company. Other executives involved in the deal were News Corp CEO Robert Thomson and the company's  global head of business development and corporate development David Brinker.

sarah wood

Brooks returned to Unruly's HQ on Wednesday to announce the News Corp acquisition to Unruly staff. She was joined by News Corp co-chairman Lachlan Murdoch (also executive chairman of 21st Century Fox) and  News Corp chief technology officer Paul Cheesbrough.

Business Insider asked what it must be like going from working independently as a startup to working with such well-known senior industry figures — not least, what it must be like reporting into Brooks whose initial stint as chief executive of News UK (then known as News International) was marred by the News of the World phone-hacking scandal, which forced her to resign her position in 2011. She was cleared of all charges related to phone-hacking, but some people, including UK shadow culture secretary Chris Bryant, have criticized her return to the company.

Wood said: "I was incredibly impressed by the purpose and professionalism of the entire senior team at News Corp. It was a major factor in the deal. Rebekah is passionate, knows the space well, and is looking to help News Corp accelerate its digital transformation, recognizing that video will play an integral part. You have to remember, she is a team builder. As a journalist and editor of The Sun she extended its leadership position, and as CEO of News International she oversaw profit growth. We're looking forward to working together with this highly passionate team." 

Former News International executive Rebekah Brooks arrives at the Old Bailey courthouse in London June 20, 2014.  REUTERS/Luke MacGregor

When pressed on whether a legacy media company could become a video leader to compete with the dominance of disruptive digital natives like YouTube, Facebook, BuzzFeed, and so on, Wood said: "News Corp has been focusing on the global and digital growth of its business, with notable acquisitions and investments in tech companies, from Storyful, the world’s first social news agency, to realtor.com and Checkout 51, as well as being an investor in Rubicon. It is also a leader in the digital transformation of the newspaper and book publishing businesses."

Expect more legacy media companies to make big strategic tech buys in the coming months

Wood thinks the deal signals a wider trend in the media/ad tech M&A landscape: Legacy media companies making big strategic buys in ad tech. We've already seen Verizon and AOL, News Corp and Unruly, expect more to follow.

"The media sector is evolving, and that brings opportunities and threats. There’s an imbalance of demand and supply: There are so many ad tech companies out there, all competing for limited marketing budgets. We are seeing a shakeout of the ad tech sector. There’s lots more consolidation to come. M&A levels are already on the rise. Expect that trend to continue over the coming months," she said.

Indeed, in the second quarter of this year in the US alone there were 59 acquisitions in the digital media space, according to investment bank LUMA Partners, which was up 37% on the previous quarter and up 47.5% year on year.

lumapartners

SEE ALSO: RANKED: The hottest pre-IPO ad tech startups of 2015

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News Corp has cut 500 jobs at money-losing education brand Amplify and sold it off (NWS)

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Rupert Murdoch

(Reuters) - News Corp said it sold its digital education brand, Amplify, to a management team supported by a group of private investors following slowing growth in the digital curriculum market.

The company did not disclose financial terms of the deal.

News Corp said in August that it was reviewing strategic options for Amplify and that it was in the final phase of talks with a potential acquirer for the business.

Larry Berger, chief executive of Amplify Learning division, will lead the new company, according to an internal memo seen by Reuters.

Amplify also said there were job cuts but did not specify the number. AP reported that News Corp had laid off around 500 of the 900 employees at the money-losing education unit. 

(Reporting By Arathy S Nair in Bengaluru and Liana B. Baker in New York; Editing by Maju Samuel and Business Insider's Lara O'Reilly)

SEE ALSO: The CEO of Unruly, which just sold to Rupert Murdoch for $176 million, told us why the acquisition is such a huge deal

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The 10 things in advertising you need to know today (FB, AMZN, YHOO, GOOG)

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mark zuckerberg

Good morning. Here's everything you need to know in the world of advertising today.

1. A News Corp exec tells us that advertisers may have "re-weighted" their media too far toward Facebook. News UK commercial managing director Dominic Carter added that newspapers need to do a better job of communicating their value to advertisers.

2. Social media monitoring and analytics company Brandwatch has raised $33 million. It brings the total investment in the UK-based company up to $64 million.

3. The inside story of why Marissa Mayer's most trusted executives have given up on Yahoo. Business Insider spoke to several Yahoo insiders about the recent spate of departures at the company and Marissa Mayer's comments about their departures.

4. Venture capital is giving ad tech "the cold shoulder," Digiday reports. One investor told the publication that "ad tech has become a dirty word."

5. Most of the top 10 brands we were Googling 15 years ago are nowhere near as popular today. From Nokia to Palm.

6. Amazon may soon launch its own shopping channel where you can buy things right off the screen. The new channel is expected to launch next year, according to Geekwire.

7. Yelp's stock soared after it reported Q3 earnings. The company reported a 40% lift in net revenue to $143.6 million, versus expectations of $141.42 million.

8. Facebook could be the big winner of the 2016 presidential election. Citi analysts said Facebook has seen "great momentum" with political ad spend.

9. YouTube just launched its new subscription service. Here's how to try it for free.

10. This model wants to make history for Victoria's Secret — and she's gaining traction. Carmen Carrera wants to be the first transgender Victoria's Secret model.

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Rupert Murdoch's News Corp posted its third straight quarter of revenue decline (NWS)

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Rupert Murdoch

News Corp's quarterly revenue fell 4.5 percent, the third straight quarter of decline, as revenue declined further in its core news and information services business, which includes Dow Jones and the Wall Street Journal.

Total revenue fell to $2.01 billion from $2.11 billion.

The net income available to the company's stockholders rose to $175 million, or 30 cents per share, in the first quarter ended Sept. 30 from $65 million, or 11 cents per share, a year earlier. The company was boosted by a one-off tax benefit related to the sale of its digital education business.

But earnings before tax, depreciation, and amortization, fell 11% in the quarter, mainly due to a weak print advertising market in Australia - where ad revenue dropped by 30% - and currency fluctuations. Advertising revenue in its news and information unit dropped 13%

On the earnings call, News Corp chief executive Robert Thomson said, as reported by The Wall Street Journal: "While we have experienced understandable challenges in a couple of our businesses this quarter, we remain confident in our overall plans for digital and global expansion."

(Reporting by Lara O'Reilly and Reuters staff: Devika Krishna Kumar and Kshitiz Goliya)

SEE ALSO: News Corp exec says advertisers may have 're-weighted' their media too far toward Facebook

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Rupert Murdoch and Jerry Hall are engaged

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rupert murdoch jerry hall

Rupert Murdoch, 84, and Jerry Hall, 59, have announced their engagement.

The engagement was announced the news on the Births, Marriages and Deaths page of The Times, owned by Murdoch’s News Corporation.

The ad read: “Mr Rupert Murdoch, father of Prudence, Elisabeth, Lachlan, James, Grace and Chloe Murdoch, and Miss Jerry Hall, mother of Elizabeth, James, Georgia and Gabriel Jagger are delighted to announce their engagement.”

The couple have been dating for four months.

They first appeared in public together at the Rugby World Cup Final between New Zealand and Australia at Twickenham in October.

The marriage will be Murdoch’s fourth, having split with his most recent spouse Wendi Deng in 2013 after 14 years of marriage.

Meanwhile it will be the first official marriage for Hall, whose union with Rolling Stone rocker Mick Jagger was declared invalid after they split in 1999.

 

As part of the divorce settlement between Murdoch and Deng the terms of the split were sealed, but it was reported that Deng kept the couple’s apartment on Fifth Avenue in Manhattan valued at $44 million and their home in Beijing. His previous divorce settlement with his second wife, Anna Torv reportedly cost him $1.7 billion.

Forbes has estimated Murdoch’s fortune at $13.4 billion.

Yesterday the couple attended the Golden Globes awards, however Hall was not seen to be wearing an engagement ring at the time.

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The Yahoo-acquisition guessing game is underway, and one big name has been crossed off the list (YHOO)

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yahoo marissa meyer

The guessing game about potential Yahoo bidders is in full swing, following the company's announcement on Wednesday that it's open to consider any "qualified strategic proposals."

Big media and communications companies, as well as private-equity firms, are the primary suspects. Verizon, AT&T, News Corp., Disney, and Comcast have all been mentioned as potential bidders in previous reports.

And we'll likely get more leaked details about suitors and proposals in the coming weeks.

But it looks like News Corp., which was previously cited in several media reports, can be crossed off the list. The media giant, which owns the Dow Jones news service and the New York Post, has no interest in Yahoo, according to a source familiar with the matter.

Comcast also seems out of the race, as its CEO Brian Roberts hinted during Wednesday's earnings call that there's probably no imminent acquisitions planned at this point.

"...I sit there and look at those scenarios and many others that have been suggested and there's nothing we feel we have to do...our plan of record in 2016 is to execute on a business plan, stay focused, and I don't feel the need that we need to go and change the face of our company," Roberts said.

Verizon has remained silent so far, despite its CEO hinting at his interest in a possible deal. At Business Insider's IGNITION conference in December, Verizon CEO Lowell McAdam said that if "it turned out that parts of it, or all of it were for sale, we'd look at it like anything in the digital media area at this point, because it's so hot."

 

According to the Financial Times, several private equity firms, including Bain and TPG, are interested in Yahoo's core business. Jim Coulter, the co-CEO of TPG, was cagey when asked about Yahoo by Bloomberg's Emily Chang earlier on Wednesday:

 

According to a note by RBC Capital Markets, the list of buyers could get longer if Yahoo decided to break up its core business into smaller pieces, since the deal size would decrease.

"Given our base case does not value any individual display asset over $700M, a much wider range of companies can be bidders for YHOO's individual properties," RBC's note said.

But that may not be a choice because splitting up Yahoo's core would make it too complicated and not command the same type of multiple Yahoo wants out of the deal.

"Most likely the whole core [will be sold] because it's too hard to split out the various verticals," SunTrust analyst Robert Peck told us last month.

SEE ALSO: The hedge fund that blasted Yahoo's $7 million holiday party isn't buying Marissa Mayer's rebuttal

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MURDOCH TO TRUMP: There's no 'anti-Trump conspiracy' at Fox News, Wall Street Journal

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rupert murdoch

Rupert Murdoch urged Republican presidential candidate Donald Trump to relax a little bit on Thursday.

"Trump blames me for WSJ poll, fights Fox News. Time to calm down. If I [am] running anti-Trump conspiracy then [I'm] doing lousy job!" Murdoch exclaimed on Twitter.

Murdoch, CEO of News Corp., was responding to Trump's furious attacks against Fox News and The Wall Street Journal, two of his media properties.

The Journal and NBC News published a joint national poll on Wednesday that showed Trump narrowly behind Ted Cruz, a top GOP primary rival, for the first time. The poll differed significantly from several other national surveys that gave Trump a wide lead.

At a Thursday campaign rally in Kiawah Island, South Carolina, Trump lit into The Journal.

"They have like an outlier poll ... and today it's on the front page of The Wall Street Journal. What a lot of crap! OK? Isn't it? It's disgusting," Trump said.

"In my opinion, it's a phony poll," he added.

One of Trump's top campaign advisers strongly suggested on Thursday that Murdoch had something to do with The Journal's poll:

Additionally, Trump has raged for months at Fox News, another News Corp. property, over its allegedly unfair coverage of his campaign. Trump even famously boycotted the network's presidential debate last month.

Trump's complaints about Fox News again exploded out into the open this week after Fox interviewed Lindsey Graham, a Republican senator and frequent Trump critic:

Trump later criticized The Journal and Fox News in the same tweet:

SEE ALSO: Watch Megyn Kelly address Donald Trump's debate boycott during a remarkable segment of her show

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News Corp is spending $280 million to settle a potential $2 billion lawsuit over in-store promotions (NWS)

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rupert murdoch

News Corp has agreed to pay out a total of $280 million to settle a long-running class-action lawsuit brought by several major packaged goods brands that accused the company of using its monopoly position to over-charge clients for in-store promotional advertising.

The case was first brought in 2012 (a year before the separation of News Corp and 21st Century Fox) and concerned the company's News Marketing American division. That subsidiary was responsible for creating the coupon inserts found inside newspapers and in-store adverts that appear on aisle displays and on shopping carts in stores like Walmart and Target.

The suit, led by Dial (which markets big brands like Persil and Loctite) and Kraft Heinz Co. alleged News Corp broke anti-trust laws with exclusionary contracts and practices that kept prices for its coupon clients artificially high for years, reaching back as far as 1997.

The plaintiffs in the case had been seeking $674.6 million in damages, which Reuters reported could have tripled to more than $2 billion under federal anti-trust law.

The packaged good companies claimed News Marketing America had locked up as much as 90.5% of the market by 2009, Reuters reported, by locking up long-term exclusive contracts. Those contracts saw News Marketing America overcharge clients by as much as 39.6% for in-store promotions, the plaintiffs claimed.

Business Insider previously reported that Dial accused News Marketing America of making large up-front payments to supermarkets to guarantee they would not go to competitors, and that News Marketing America had torn down signs from rivals' advertising clients in supermarkets which had signed such contracts.

In an emailed statement, News Corp said: "News America Marketing has consistently denied any wrongdoing in this case, which involves allegations relating to historical conduct reaching back as far as 1997. We are pleased to have concluded this settlement, which allows us to avoid the expense and uncertainty of further litigating this matter. While we had full confidence in our case, we believe this decision is in the best interests of our company and stockholders."

News Corp has agreed to pay approximately $250 million for the case to be dismissed, subject to court approval. The company has also agreed to pay around $30 million to resolve other related claims.

News Corp has also agreed not to enter exclusive contracts with retailers lasting longer than 2 years, unless retailers specifically request a contract of that kind.

The settlement, announced on Monday, came on the day the trial entered the US District Court, Southern District of New York.

Prior to this settlement, News Corp had already lost several rounds of litigation over alleged anti-trust activities in the grocery coupon business, and it has cost the company $656 million in settlements. Those settlements were with Floorgraphics, Valassis and Insignia Systems, all agencies that supply advertising services for coupons and groceries. 

SEE ALSO: How News Corp. Could Face An Advertiser Mutiny Costing It Hundreds Of Millions

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The boss of The Sun and The Times says the publisher is competing with Facebook and Google in the battle for ad revenue

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Rebekah Brooks

Rebekah Brooks, the chief executive of Rupert Murdoch's News UK, says the company must learn from Google and Facebook if it is to compete for the attentions of advertisers.

In one of her first interviews since returning to the publisher of The Sun and the Times after the News of the World phone hacking scandal in 2011, Brooks told UK trade magazine Campaign that the company needs to be more sophisticated to unlock revenue.

"Advertisers want a much deeper engagement with their media partners now than ever before," she said. "We’re competing with some impressive competitors – Facebook and Google – in terms of how they sell their advertising to clients, so we’ve taken a leaf out of their book. We need a more holistic approach."

Campaign has previously reported on News UK renaming its commercial division The Bridge as part of plans to get its advertising sales team working more closely with data, insight, measurement, and its creative content division.

Advertising revenues at UK newspapers The Sun and The Times were down 7% last year, according to News Corp's 2015 annual report, and chief financial officer Bedi Singh said on a conference call that improving the performance of the former title is a "key focus".

Brooks has removed The Sun's online paywall and relaunched the website since she rejoined the company. Furthermore, she told Campaign that News Corp's £220 million ($286 million) acquisition of radio company Wireless Group last week will help provide advertisers with a "cross-platform sell".

Wireless owns TalkSport, a UK national sports radio station, which has a very similar audience to The Sun. It also has broadcasting rights to The Premier League, which The Sun trades off through revenue generators including fantasy football game, Dream Team and Sun Bets.

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Vice Media made a bid for the News of the World at the height of the phone hacking scandal

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Shane Smith

Vice Media made an attempt to buy former British Sunday tabloid newspaper, The News of the World, from Rupert Murdoch at the height of the phone hacking scandal, according to the Wall Street Journal.

The Wall Street Journal reported that Vice cofounder and chief executive Shane Smith offered to take the News of the World off News Corp's hands during a meeting with Rupert's son, James Murdoch.

No date was put on the meeting, but it is likely to have taken place in 2011 when the phone hacking scandal erupted after The Guardian revealed that News of the World journalists illegally accessed the messages of murdered schoolgirl Milly Dowler.

Smith offered to turn the British newspaper into a "new kind of international news outlet." His offer was rebuffed, but Smith told The Wall Street Journal that James Murdoch “liked our cockiness.”

Rupert Murdoch shut down the News of the World in July 2011 and two years later, News Corp took a 5% stake in Vice Media for $70 million (£53 million).

Business Insider has contacted News UK, which operates News Corp's UK news brands, for comment.

The revelation comes as Vice boss Smith prepares to deliver the annual MacTaggart lecture at the Edinburgh International Television Festival on Wednesday evening. The conference is a landmark event in the British TV industry calendar.

In what is expected to be an unscripted address, Smith will trace the history of his company and discuss the launch of Vice TV channel Viceland in the UK later this year.

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NewsCorp just pumped $10 million into ad tech company AppNexus as part of a $31 million round (NWS)

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michael rubensteinAd tech company AppNexus has raised a $31 million funding round, which includes a $10 million investment from News Corp, involvement from Yahoo Japan, and participation from its existing investors.

While the announcement might just seem like another run-of-the-mill ad tech fundraise, the fact that two major publishers are the lead investors is likely a signal of intent towards AppNexus — and potentially away from the dominant publisher ad tech platform Google DoubleClick.

As part of its investment, News Corp — which owns a slate of huge news brands including The Wall Street Journal, Dow Jones Newswires, and The Times —  has entered into a master agreement that means its properties can elect to using all of AppNexus' products, from ad serving, to analytics.

Some News Corp brands already use AppNexus' supply-side platform and the properties aren't being forced into using AppNexus, but it's likely many might make the shift (from Google or their other providers) as the result of this investment. News Corp is also an investor in another supply-side platform — Rubicon Project— so it'll be interesting to see whether this new investment prompts a shift from Rubicon's Project's products over to AppNexus too.

In a statement, News Corp senior vice president and head of business and corporate development David Brinker said: "As individual businesses in our company started adopting AppNexus products into their technology stack, we gained further appreciation for their services. We are pleased to invest in AppNexus as we continue our partnership across,  our news, real estate, and technology assets."

Another part of the agreement will also see News Corp's video ad tech division Unruly, which it acquired last year for $176 million, creating vertical video ad formats to target mobile phones.

sarah wood unrulyMichael Rubenstein, AppNexus president, told Business Insider: "Currently, the Unruly inventory available on AppNexus' platform consists primarily of outstream format. As a next step in the partnership, AppNexus and Unruly will expand the formats available to AppNexus video buyers to include vertical video. AppNexus also plans to collaborate with Unruly on the Vertical Video Collective, a network of mobile-first content creators specializing in creating video for vertical viewing."

Rubenstein declined to confirm whether News Corp will be guaranteeing a level of spend as a result of the investment (which is how WPP's 2014 $25 million investment in AppNexus reportedly worked).

We asked whether News Corp will benefit in any other way as a customer by making the investment — would it be spared of the so-called "ad tech tax" (the margin ad tech companies make on providing their services), for example?

Rubenstein said: "AppNexus helps companies avoid the ad tech tax, and third parties validate this. According to Cowen and Company, AppNexus charges the lowest 'take rate' of any company involved in the programmatic marketplace. That’s AppNexus’ value proposition: open, powerful technology with transparent, cost-effective fees."

News Corp and Yahoo Japan now have a vested interest in AppNexus' performance, which could make competitors uneasy about using AppNexus. Not so, according to Rubenstein.

He said: "The question should be: 'Why wouldn’t you use AppNexus’ ad tech stack?' We’ve built the world’s leading enterprise technology stack for publishers. Not only do we give them an end-to-end solution, but we don’t compete with them the way Google does. We’ve added a large number of top tier publishers to the platform over the past year, which is a testament to the market’s demand for an open and transparent full-stack alternative to Google’s publisher product suite."

An AppNexus IPO next?

The financing brings AppNexus' total investment to date up to $282 million.

AppNexus is highly-tipped to go public soon, with most people in the ad tech community predicting its IPO will land in the first quarter of 2017 — largely due to the fact that Q4 is seasonally the best-performing quarter for ad funded businesses, so it will have strong numbers to show to investors.

The Trade Desk, a California-based demand-side platform, went public on September 21. The company surpassed expectations, opening on the Nasdaq up 59% at $28.75 per share. The stock price has stayed fairly stable since.

the trade deskIn an interview with Business Insider on The Trade Desk's IPO day, we asked CEO Jeff Green whether he thought AppNexus might be the next ad tech company to IPO. Green responded that he didn't know, but that the company was committed to "empowering an ecosystem where others do well" and that AppNexus is a "great partner."

Asked about what The Trade Desk's IPO means for AppNexus and the ad tech market in general, Rubenstein responded: "We’ve been long-time partners with The Trade Desk and have very different business models. The programmatic market has seen a lot of growth in the past several years, and it makes sense that investors are taking interest in ad tech."

Separately, AppNexus announced earlier this week it had signed a deal to sell display ads on LinkedIn.

SEE ALSO: RANKED: The 37 hottest pre-IPO ad tech startups of 2016

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'This could be bigger than phone-hacking,' says lawyer pursuing News UK over the 'Fake Sheikh'

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Mark Lewis

"This could be bigger than phone-hacking."

That's the view of the lawyer pursuing legal claims of up to £800 million ($1 billion) against Rupert Murdoch's News UK after Mazher Mahmood, the Sun on Sunday investigative reporter, was convicted of perverting the course of justice.

Seddons partner Mark Lewis was at the forefront of efforts to expose the News of the World phone-hacking scandal, but he believes Mahmood's conviction on Wednesday leaves News UK open to an even more damaging scandal.

Lewis has been approached by 25 people interested in suing News UK after they were caught up in a sting by Mahmood — also known as the "Fake Sheikh"— for the News of the World and Sun on Sunday.

Lewis' clients include former glamour model Emma Morgan and John Alford, a star of ITV drama "London’s Burning." He is also acting on behalf of former England football manager Sven-Göran Eriksson, who was targeted by Mahmood in 2006.

Sven Goran ErikssonLewis said more evidence is emerging about Mahmood's methods and his conviction, in which he was found guilty of tampering with evidence in a drugs trial against British pop star Tulisa Contostavlos. It could be (another) watershed moment for Britain's tabloid media.

"There's a lot of money at stake for them [News UK]. There's a lot of reputational issues at stake for them. It potentially will open the floodgates," he told Business Insider.

"With phone hacking, all of the people didn't know their phone was being hacked. They might have lost some friendships, but they weren't suffering as a result of a printed story. This position is different because it actually entraps people. A lot of them ended up in prison, never working again, labelled as drug dealer, prostitute, or some sort of fraudster."

Mazher MahmoodLewis said it was "very early" to say if the scandal could have ramifications for News UK's senior management, including chief executive Rebekah Brooks, who edited the News of the World from 2000 to 2003.

"I suspect that there would have been some people who thought it was all over, who might have thought: 'Oh God, it's coming back,'" Lewis said.

The lawyer is now working to process the claims and said it is too early to say how News UK will respond.

"It's always possible [News UK could settle]. There have been no offers yet, but we haven't made any claim yet, so I wouldn't expect there to be any offers. It's possible there will be a lot fighting before it is simply settled."

News UK declined to comment beyond a statement released after Mahmood's conviction. "We are disappointed by the news that Mazher Mahmood has been convicted. We do not have further comment at this time," a spokeswoman said.

She would not confirm if Mahmood is still employed by News UK.

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Heat Street's Louise Mensch tells us how she persuaded News Corp to back a news site with 'no safe spaces'

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Louise Mensch

With Donald Trump ripping a chasm through US politics and Brexit leaving Britain's liberal elite gasping, it's not been a bad year to launch a spikey right-wing website, which snorts at political correctness.

Not that this was always the intention for Heat Street, the self-styled "libertarian Huffington Post" being grown in Rupert Murdoch's backyard. Typical headlines include 'Gang of Feminist ‘Beardos’ Try To Stop a Guy From Filming Portland 'Slut Walk'' and 'Black Tenant Slams Neighbor’s Noise Complaint As Racist ‘White Tears'.'

Louise Mensch, the former Conservative MP turned journalist, tells us that getting the website off the ground in such a politically tumultuous environment was more luck than design.

She came up with the idea for a caustic blog under the News Corp empire "three or four years ago" after claiming the company's digital output "was not that great." But Heat Street was in "corporate development hell" for a long time after Mensch originally pitched the idea to Will Lewis, the chief executive of New Corp's Dow Jones.

She recalls: "In the end, I said: 'Guys, if we’re not going to do this, let me do something else for you because at the moment I'm spinning my wheels.'"

News Corp CEO Robert Thompson eventually signed off the project in late 2015, but not without toying with Mensch. "He punked me," she laughs. "I was bracing myself for rejection. He sighed heavily and said it was 'difficult market conditions' and then said, 'so that’s why we’ve decided to back you.' Then I leapt up and went 'oh my god' and ran round the room."

Mensch believes Thompson's prank has a whiff of News Corp's "anti-establishment, or at least anti-stuffiness" roots. This, she adds, is the spirit Heat Street is attempting to capture.

"That punky libertarian thing is pretty much in the original spirit and wheelhouse of where this company is. It’s misunderstood, I believe, as a straight down the line fuddy-duddy Conservative company. But I think that’s completely wrong. Where we are here is closer to that punky spirit," she says.

Gadsen flagMensch turns to another musical reference to describe Heat Street's editorial mantra: Metallica song "Don’t Tread On Me." These words are synonymous with the Gadsden flag, a symbol of the American Revolution, which has been adopted by right-wing libertarians and the Tea Party movement.

The flag is not free from controversy. In August, the US Equal Employment Opportunity Commission decided to investigate whether it could be considered a racist symbol in the workplace after a complainant argued that it is a "historical indicator of white resentment against blacks."

Mensch prefers to focus on the more literal meaning of "don't tread on me," explaining: "People are so fed up of being lectured and hectored, as they see it. That’s what drives us."

It's an attitude that has delivered recent attention-grabbing articles including 'Are Obama’s Wind Turbines to Blame for Hurricanes?' and 'The Sheer Greed of Diane Abbott.' It was also forced to apologise last month after publishing a piece claiming that the Pepe the Frog meme is not anti-semitic.

Heat Street's British voice.

Mensch downed tools on her Sun on Sunday column in January to focus on getting Heat Street off the ground. Heat Street launched in April and is now being read by nearly 6 million unique users a month around the world. In total, around 16 people work on the website, two of whom are based out of News UK's office in London.

Freelance journalist Miles Goslett was hired as UK editor in January. Goslett is best known for uncovering the crippling mismanagement of high-profile UK childrens' charity Kids Company, which closed in August 2015. He is also widely credited for the explosive revelation that BBC news programme "Newsnight" pulled a story about Jimmy Savile's rein of abuse soon after his death.

Miles GoslettIt was the Kids Company story that brought Goslett into the fold after Mensch praised him in her Sun on Sunday column for exposing the scandal. He explains: "I sent her an email saying how kind and generous [it was] that she noted my role in that story. She wrote back saying: 'How do you feel about not being a freelance journalist?'"

Mensch says Goslett is a good fit with the Heat Street brand. His track record shows he has a nose for agenda-setting, controversial stories. There is also a streak of mischievousness in his reporting, which can infuriate those he writes about. Senior figures at the BBC are privately dismissive of Goslett, believing him to have an agenda against the broadcaster.

This spilled over at the height of the Savile scandal when former BBC Trust chairman Lord Patten accused Goslett of "spin"in a tense exchange during a press conference in 2012.

Goslett believes the BBC is "mired in secrecy." He explains: "The BBC is among the most secretive public organisations. It receives more public money every year than the Foreign Office and is not happy to tell anybody who pays the licence fee how that money is spent."

But it's not all about the BBC for Goslett. Yes, he's delivered scoops for Heat Street on former "Top Gear" presenter Chris Evans being quizzed by police over alleged lewd behaviour on "The Big Breakfast" in the 1990s. But he also revealed Diane Abbott spent nearly £30,000 of her charity's money on a parliamentary awards bash.

Goslett has also renewed hostilities with Alan Yentob, the former Kids Company chair and ex-BBC creative director. In a story about Yentob's new production company, I Am Curious ... Productions, Goslett posted the audio from the curt conversation they had (Yentob ends the call by saying: "No, you can't have any conversation, it's none of your business. Goodbye."). It says a lot about the spikey journalism that Heat Street is trying to foster.

"You are telling the reader as much as you know about the story," Goslett explains when asked about the audio clip. He adds that it is no different to a TV camera crew doorstepping a politician.

"We're putting political correctness under the spotlight and trying to have a bit of fun with it. The strapline is: 'No Safe Spaces.' We make mischief and have some fun with it. We try to do that, and sometimes we cover things in a more serious way," he says.

Goslett and his reporter Kieran Corcoran are helping the UK website generate around 20% of Heat Street's traffic. He collaborates closely with the team in New York and they hold daily editorial meetings. He says Mensch is "very hands-on," adding: "She is relentlessly positive, incredibly busy and hardworking. She’s got a lot to say."

Indeed, Mensch has written Heat Street's best performing story to date. Mensch used her French to wade through 14 hours of testimony on the Paris terror attacks last year to produce a story headlined 'France 'Suppressed Reports of Gruesome Torture' at Bataclan Massacre.'

She emphasises it is a "lean operation" and Goslett says that getting Heat Street to "double digit [millions]" unique users will prove to be a tipping point. Neither he or Mensch would talk about revenue, but they said that the vast majority of the website's income is currently from programmatic advertising.

Once above the 10 million traffic threshold, Heat Street will begin to strike more meaningful advertising deals, which in turn should unlock investment in more resources. "We’re already owned by the end user. We have to deliver a profitable product and we’re not doing it on promises and pie graphs for some venture capitalist. We have to show an actual business case," Mensch adds.

Heat StreetShe does think the traffic Heat Street has generated from a standing start shows that it has hit a nerve. Mensch compares the website's trajectory to Donald Trump: "The only reason he’s got somewhere this time is because the rise of political correctness has pissed everyone off so much that something was going to snap — and it has snapped."

Not that she is a supporter of Trump. Mensch is personally backing Hilary Clinton, but only because she loathes the Republican candidate. Despite her strong views — and the fact that Heat Street backed Brexit — she says it is rare that the website will take a political position.

"We certainly wouldn’t take, as a newspaper might, an editorial view on which candidate would be backed," agrees Goslett. "We encourage wide-open debate."

Louise MenschMensch says the plan is to get into more Buzzfeed-style lifestyle content as the website evolves. Collaborating with other Murdoch brands is also a priority, with Mensch highlighting Fox News (she has already appeared on the network to plug Heat Street). Mensch says "people should watch their backs" when the website hits its goals.

Murdoch and his senior team are monitoring Heat Street's progress carefully. "Mr. Murdoch took a very close interest from the beginning of project. After launch he came down to see the entire team," Mensch says.

Goslett, who has also sat down to discuss the website's progress with News UK chief executive Rebekah Brooks, adds: "They feel quite positive about it. It’s got the benefit of being brand new, and people are always excited by new things."

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News UK fires jailed undercover reporter Mazher Mahmood — but vows to fight any legal claims against the 'Fake Sheikh'

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Mazher Mahmood

Just two weeks ago, News UK was refusing to comment on the employment status of investigative journalist Mazher Mahmood.

But now the so-called "Fake Sheikh" has been sentenced to 15 months in jail for tampering with evidence in the drugs trial of British pop star Tulisa Contostavlos, Rupert Murdoch's company has broken its silence. Mahmood has been sacked.

In a statement, a News UK spokeswoman said the undercover reporter's contract "has been terminated."

She added: "Mazher has led scores of successful investigations during his 25-year career with the company. His work has led to the exposure of criminality and wrongdoing. It is a source of great regret that his time with the company should end in this manner."

Mahmood's famous investigations include apparently foiling a Victoria Beckham kidnap plot. He also exposed US chatshow host Jerry Springer for allegedly interloping with porn stars who appeared on his programme.

He would use a variety of undercover disguises to access his targets and usually filmed their wrongdoing. His most famous disguise was a rich Arab, which is how he earned the "Fake Sheikh" moniker.

News UK also fired a warning.

"We have noted the threats made after Mazher's conviction of civil claims against this company in relation to his previous work. Should such claims be brought, they will be vigorously defended," she said.

Media lawyer Mark Lewis has claimed that News UK could face civil claims of up to £800 million ($1 billion) from people caught up in Mahmood's stings."This could be bigger than phone-hacking," he told Business Insider.

The full News UK statement:

"Following the sentencing of Mazher Mahmood today, News UK can confirm that his employment has been terminated.

"Mazher was suspended after the Tulisa Contostavlos trial collapsed, pending an internal inquiry. That inquiry was superseded by the criminal process.

"Mazher has led scores of successful investigations during his 25-year career with the company. His work has led to the exposure of criminality and wrongdoing. It is a source of great regret that his time with the company should end in this manner.

"The previous criminal cases that have resulted from his investigations were tested by the courts or guilty pleas were entered. We are aware that the Crown Prosecution Service has reviewed some cases and understand that the Criminal Cases Review Commission is looking at whether a small number of matters should be referred back to the Court of Appeal. We await their decisions.

"We have noted the threats made after Mazher's conviction of civil claims against this company in relation to his previous work. Should such claims be brought, they will be vigorously defended."

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Here are some of the big names who invested in Theranos

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Rupert Murdoch

When Theranos was at its prime, it attracted funding from big-name investors who poured millions into the blood testing startup. Now, we're learning for the first time who some of those investors are, and who stands to lose big if the startup can't be turned around.

The Wall Street Journal reports that Rupert Murdoch, Cox Enterprises, and Riley Bechtel of Bechtel Group, one of the largest construction companies in the world, were among Theranos' early investors. Murdoch and Cox each put $100 million into the company during its most recent funding round of $632 million, which came to a close in 2015, according to The Journal. 

Murdoch is the executive chairman of the Journal's parent company, News Corp. In an interesting twist, The Journal was the first publication to report on trouble at Theranos in October 2015.

Theranos remains mired in legal battles, including a $140 million breach of contract suit filed by Walgreens earlier this month and a new lawsuit filed Monday by Robert Colman, cofounder of San Francisco investment bank Robertson Stephens & Co. The suit alleges that Theranos was misleading its investors and making false claims about its technology, according to the Journal

Theranos also shut down its lab operations in October after the accuracy of the test was called into question, cutting 340 jobs and closing the Wellness Centers where blood tests were performed. Theranos CEO Elizabeth Holmes is now banned from the lab-testing industry for the next two years. 

That setback, plus what will likely be expensive legal battles as Theranos fights the Walgreen suit, are likely to cost the company millions. The startup was once valued at $9 billion and, according to Pitchbook, has raised more than $750 million to date.

SEE ALSO: The rise, fall, and pivot of Theranos, in one graphic

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WSJ's hiccup on Google holds lessons for all publishers (NWSA, GOOGL)

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Share of the Digital Ad Pie

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After blocking free access to its site via Google in February, The Wall Street Journal has enjoyed a fourfold increase in conversion rates of visitors into paying subscribers, but also suffered from a 44% decrease in referral traffic from Google, Bloomberg reports.

The WSJ’s experience with hardening its paywall vis-a-vis Google provides lessons for all digital publishers seeking to balance free, ad-supported traffic with more reliable subscription revenues:

  • Hiding content behind paywalls results in a decline on Google search results. The WSJ’s search ranking dropped because Google’s crawlers — the bots that scan the web — could not browse the content that was hidden behind the paywall. The search engine could only index the first few paragraphs that were freely available in the preview of the article, causing the WSJ’s ranking to be lowered, and viewership via Google to fall. 
  • Metered paywalls provide a workaround, but they can also be worked around. Many premium publishers with let people read a few articles for free when accessing their site via Google. This tactic allows them to maintain their ranking in Google’s search results and encourage readers to sign up for full subscriptions. But metered paywalls can be easily duped and reset by clearing browser cookies. The WSJ blocked Google users from reading free articles when it found that close to a million people a month were abusing its three-article limit.
  • The WSJ mitigated the loss in traffic via Google by leveraging social platforms. Social media visits to the WSJ grew 34% since it blocked free access for users arriving via Google search, helping to keep overall traffic and ad revenue flat. This statistic points to the effectiveness of social media in driving readership. Web analytics firm Parse.ly supports this viewpoint; it found that Facebook and Twitter, respectively, accounted for 41% and 2.8% of external traffic referrals through May, with Google accounting for 34%.
  • Social platforms seem to be more effective marketing tools than Google. According to the WSJ’s experience and Parse.ly’s data, Facebook drives substantially more traffic to publisher websites than Google, suggesting that metered paywall strategies may be more effective on the social platform. Whether this strategy makes sense for any given publisher will depend on where their traffic is coming from.

The precariousness of digital advertising makes it essential for publishers to have a subscription strategy. Facebook and Google dominate the space, with both companies accounting for nearly 85% of US internet ad growth in 2016, up from 76% in 2015, according to the 2017 Internet Trends report. Meanwhile, brand advertisers are becoming more vigilant, reducing costs, and calling for more oversight into their digital campaigns. Amid this, subscriptions provide steady, repeated, and long-lasting stream of revenue.  

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