This just in: Nobody wants to download and keep coming back to your second-rate, machine-curated, me-too newsreader app, so don't bother working on it anymore. If you really want to capitalize on human interest in current affairs, it's better to go where the humans are and approach them a lot differently.
Reports that LinkedIn will acquire the news reader app Pulse for an estimated $100 million (though I've also seen estimates that value it at half that much) have focused primarily on what it means to the social networking service's efforts around the creation and distribution of content. Far less attention has been paid to what it might mean for developers working in a space similar to Pulse, and whether this is an encouraging sign or not. When Facebook (NASDAQ:FB) bought Instagram, it seemed to validate the entire notion of photo-sharing apps, even as it made it more difficult for new entrants to distinguish themselves. News reader apps may soon experience a similar rise in popularity but not if they continue to be created in the way they are today.
So many of the news readers out there now promise the same thing: content that will be aggregated across multiple sources through some kind of algorithm or user preference filter. I've personally dealt with several such startups in previous roles as a media executive, and almost all of them spouted the same benefits. Audiences would be given a "fire hose" of stories that will be highly relevant and personalized. The reality is that many of these apps are based on simple keyword searches and recommendations from the same circle of highly influential online "experts." No wonder a report from Flurry last year showed that, based on category, news apps accounted for a meager two percent of usage in 2012.
For investors, LinkedIn acquiring Pulse makes sense. LinkedIn is trying to increase the value it offers to its members by giving them a way to promote their career achievements and their expertise via the content they share. For developers, this is a key lesson. Whether you work in the business sector or not, news becomes more than a commodity when it can be annotated and redistributed with additional context. Much in the way app developers often need to prioritize among platforms such as iOS or Android, the success or failure of news reader apps will be determined in part by the social platforms for which they are best suited.
News apps may not be a big category, but social is usually neck-and-neck with gaming. That's why it behooves any developers in the news app space to stop thinking about themselves as creating news apps with a social sharing feature. Instead, think of yourselves as creators of social apps that optimize and enhance news (or more broadly speaking, content) consumption experiences. Time to turn off the fire hose and turn on the community.--Shane