NewsCred gets $4 million to reinvent the newswire

As we’ve written a number of times, one of the big challenges for both media consumers and media companies in a digital age is the need to filter the vast ocean of information that is constantly streaming towards us. NewsCred, a New York-based startup, started off several years ago trying to solve that problem from a user’s perspective, but has since shifted its focus toward providing a filtered stream of high-quality news for publishers — like a digital version of a traditional newswire. The company said Wednesday that it has raised a $4-million Series A round of venture financing and now has more than 750 news sources providing content for the service.

When NewsCred first launched in 2008, it was — as its name suggests — aimed at filtering the news from both traditional and new-media sources based on credibility. The site tried to get users to rate the credibility of various individual writers, bloggers and news sources, and it also used its own semantic filtering and algorithms to determine which were the most credible on a number of topics. I remember trying it out after being shown the service by founder and CEO Shafqat Islam, and thinking that it was a noble goal — but I wasn’t sure how many people would actually take the time to do the kind of rating that it required.

A newswire built with digital in mind

After awhile, as Islam told me in an interview before Wednesday’s launch, the company realized that the consumer focus wasn’t really working, but that the algorithms and filtering mechanisms that it had developed could also be used to produce a stream of content that publishers and media companies could make use of.

We realized that we had the technology to filter and make sense of this huge stream of data, and that most publishers were still approaching it through this kind of fragmented syndication model.

Islam says he believes NewsCred has built a modern digital version of the Associated Press newswire, which allows publishers to both distribute their own content to others — and be paid a licensing fee for doing so — and get access to high-quality sources of content that they can license for their own sites. The service has signed up traditional sources such as Forbes, The Guardian and the Economist, as well as most of the major newspapers in the United States, but also pulls content from blogs and other sources, including high-profile authors such as economist Nouriel Roubini.

One of the things I find most interesting about NewsCred is that unlike traditional newswires, it is built on an API: that is, a programming interface that makes it easy for publishers of all kinds to build services and widgets that incorporate content from the service into their sites. In fact, Islam said that some publishers — including Forbes magazine — see the service as an alternative to building their own API, and use it in part as a way of making their own content easier to handle and filter (sort by topic, etc.) for internal purposes.

Publishers need to see themselves as a platform

Some forward-thinking publishers such as The Guardian have made significant moves towards seeing themselves as a data platform instead of just a traditional media company: the British newspaper developed its own open API and launched an “open platform” service that allows websites and others to make use of its content for a fee, or in return for a share of advertising revenue (Islam says that NewsCred recently hired Torsten de Riese, one of the developers who created the Guardian’s platform).

While many publishers license their content in a variety of ways, most of them do these deals either on a one-by-one basis or through traditional wires such as Associated Press or Dow Jones, which don’t make it easy for websites to license their content and don’t have APIs. Some services such as DayLife provide aggregated content for websites based on topics, but it is primarily derived from partial-text RSS feeds — Islam says NewsCred is the only service of its kind that has full-text and licensed content from more than 750 mainstream and traditional sources.

As publishing becomes increasingly digital, an API-based platform approach seems like it is becoming more and more of a necessity for publishers and media entities, and existing newswires like Associated Press aren’t providing that kind of capability. That provides an opportunity for someone like NewsCred to fill that role — and potentially even broaden its sources to include social networks like Twitter, which has become a newswire-like service itself when it comes to breaking news events like the Occupy Wall Street movement and the “Arab Spring” uprisings in Egypt and elsewhere.

The $4-million Series A round that NewsCred raised, which closed last month, was led by FirstMark Capital and included investments from Lerer Ventures, AOL Ventures and Advancit Capital, as well as the seed investors the company raised money from last year — a group that included IA Ventures and Naval Ravikant.

Post and thumbnail photos courtesy of Flickr users World Economic Forum