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Facebook Refuses to Let Apple Dominate News Business

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Apr. 11 2019, Published 8:32 a.m. ET

Facebook to launch special news tab

Apple last month launched a news subscription service called Apple News Plus, marking its expansion in the digital news distribution business. Apple News Plus costs $10 a month in the United States. Apple will split Apple News Plus revenues with publishers.

A week after Apple launched its news subscription service, Facebook (FB) CEO Mark Zuckerberg revealed that the company is planning to set up a special news section within its flagship social network as part of an effort to support the news publishing industry. According to Zuckerberg, the news tab will be dedicated to promoting high-quality news to help readers discover trustworthy news content. At the same time, Facebook’s news sector will provide tools to help news organizations make money from their work.

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Facebook outruns Apple in audience reach

Through its flagship social app alone, Facebook serves more than 2.3 billion people worldwide, indicating a larger audience reach than Apple, which said in January that some 1.4 billion of its devices are in active use globally.

Facebook already works with news publishers to help them reach its billions of social network users. Expanding its news distribution service with a special news tab could help Facebook both capture some non-advertising revenue and strengthen its core advertising business. News distribution could help Facebook attract more traffic to its platform, thereby increasing exposure for advertisers, who may in turn want to spend more on Facebook advertising.

Facebook’s advertising revenue increased 30%

Facebook generated $16.6 billion in advertising revenue in the fourth quarter, an increase of 30% YoY. Twitter (TWTR), Google (GOOGL), Yelp (YELP), and Baidu (BIDU) recorded advertising revenue growth of 23%, 20%, 12%, and 10% YoY, respectively, in the fourth quarter.

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