• by Steven Rosenbaum , Featured Contributor, February 7, 2022

When big companies end up in the headlines, the news is often years in the making.

Last week both CNN and Facebook found themselves facing scrutiny. In the case of Facebook, stock market retribution caught the mainstream press by surprise. But in both cases, the headlines had been written years ago.

Let’s start with Facebook. When CEO Mark Zuckerberg announced the company’s change in name and focus back in the fall, it was the result of years of planning and internal data that was irrefutable. Facebook’s audience has been growing older for years, and Instagram, with an audience somewhat younger, hasn’t changed the fact that younger users had moved on to more diverse, more visual, shorter-form platforms.

TikTok’s rapid rise, along with Snap’s continued growth, had folks with access to Facebook’s internal numbers aware that making tweaks wouldn’t be enough. Facebook was able to keep the exodus out of the public eye in part by allowing the growth of salacious political misinformation to grow.

Facebook was boxed in, and Wall Street is unforgiving when growth slows. And while the metaverse may well be where the web is moving, the slow adoption of Facebook’s Oculus headgear, despite its extraordinarily alluring price of $299, put the social network in the unenviable position of having to shift from posts to the community, with no certainty that consumers want to follow it. Facebook's attempt to bridge the gap with community groups hasn’t been enough to stop the shift to more nimble networks.

The writing might have been on the wall way back when Snap founder Evan Spiegel was offered $3 billion to sell to Facebook in 2013, and the then two-year-old company turned Facebook down. Today Snap has a market value of $81.99 billion and growing.

The CNN story is more complicated. The current media buzz says that Jeff Zucker fired Chris Cuomo and refused to pay out his contract. Cuomo vowed revenge and was able to get Zucker fired for having a relationship with a subordinate that he didn’t report. Those facts seem reasonably well documented, as far as they go.

But there’s more to the story. (Disclosure: Zucker's teenage son was given stock and a board seat on a company I acquired from Corey Booker, Waywire. That said, I haven't spoken to Zucker in years, and have no inside information here). Zucker’s history goes way back, at first to news at NBC and then as the head of entertainment at NBC, during which time he greenlit and promoted Donald Trump’s brand-building exercise known as “The Apprentice.” So Zucker and Trump were pals at the time. Then Zucker became head of CNN and turned CNN more clearly left -- and he and Trump became mortal enemies. So there’s a long and twisted political history that comes into play here.

And then there’s the WarnerMedia merger with Discovery, which seems the largest factor. The most powerful figure in this deal is John Malone, chairman of Liberty Media, Discovery's largest shareholder. Malone is a notorious figure in the media business, for years referred to as Darth Vader. Malone’s history is the story of the rise of cable. Billionaire Malone is known as the largest private landowner in the USA, owning  2.2 million acres -- more than twice the size of Rhode Island. Malone’s political lineage is libertarian, but he’s a significant donor to Donald Trump.

It looked like Zucker’s star would rise under Discovery chief and Zucker friend David Zaslav. But in the end, it was WarnerMedia CEO Jason Kilar, who was perceived as less powerful than Zucker, who ended up being the one to show him the door. Will CNN’s future be more conservative under the Malone-controlled enterprise, as this Daily Mail post suggests? That remains to be seen.