Facebook: Is a Good Name Better than Riches?


Mar. 26 2018, Updated 9:00 a.m. ET

Improving relationship with media publishers

Facebook’s (FB) idea of paying media outlets for the news they publish on its Watch video platform could pay off in a variety of ways. Paying for media content could help Facebook improve its relationship with news organizations, which have long criticized it alongside Google for eating up their advertising revenues.

Facebook and Google have recently started taking steps to help media publishers monetize their digital content.

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Battling online misinformation

A healthy relationship with news publishers could also aid in Facebook’s war on online misinformation. For example, easy access to news from credible publishers could help stifle the spread of fake news and propaganda on Facebook’s social media sites.

Last year, executives from Facebook, Google, and Twitter (TWTR) appeared for questioning by lawmakers in the United States and the United Kingdom over issues such as the spread of propaganda and objectionable content on their platforms. The grilling by lawmakers cast the companies in a bad light, and they committed to fixing the problems to keep their businesses free of controversy.

Impact on profits

Facebook warned late last year that its profitability could take a hit as it ramps up spending on the safety and security of its platforms to tackle problems such as fake news.

Facebook posted a profit of $15.9 billion 2017 compared to a profit of $3.0 billion at Amazon (AMZN). Twitter and Snap (SNAP) suffered losses of $108.1 million and $3.4 billion, respectively, in 2017. Google’s parent, Alphabet (GOOGL), generated a profit of $12.7 billion in 2017.


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