The Facebook news ban in Australia has been making all the headlines lately. Last week Facebook announced that it will no longer allow Australians to view or share news content. ? This is completely the opposite of Google’s news approach in Australia. We dive into both strategies below.
Why is Facebook Banning News in Australia in the First Place?
Australia first proposed a News Media and Digital Platforms bill back in December 2020. This bill basically requires Facebook and Google to pay the companies of news articles to display and link to their content. Right now if you see an article on your Facebook news feed there are Facebook ads surrounding it. The website publisher will not get any ad revenue until you visit their website. The Australian government is trying to protect its local news publishers from big companies, like Google and Facebook, from driving them out of business.
What Does Facebook Think of This New Bill?
In 2019 52% of Americans received their news from Facebook. That is a huge stat, it seems like that amount of reach would only help distribute the news articles to drive more traffic to their sites. Mark Zuckerberg, CEO of Facebook, probably went ahead with the ban assuming the same. In his mind he may be thinking Facebook is helping the news companies so why should he pay them on top of the traffic?
Here’s How Differently Google and Facebook Reacted to the Australian News Bill
Google responded by making agreements with Australian publications. They want to work with the Australian Government. Facebook on the other hand banned all news articles completely. This means no more Facebook news at all for Australians. If an Australian wants to share an article about the new best surfing spot, Facebook’s algorithm will figure out if it is a news article and not allow it to be posted.
Investing Outlook for the Facebook News Ban
With the Facebook news ban in Australia, Google should have a large presence for news articles. Will Google reap the overall reward with more traffic due to the almost exclusive place for news in Australia? Or will the news articles have less traffic without the Facebook news linking people to their sites. This is a perfect way for Facebook to test out its income without news. It has recently been the target of many governments for polarized news articles, and it would probably be relived if it can continue profitability without having the news headache that has been created.
Google on the other hand is working with news articles and although they will have to pay them to use their news, Google could become the news platform. This could drive more ad sales and traffic to Google resulting in more profitability. The bottom line is that there is possible success or failure for both companies independent of the other. The main questions you should ask yourself before investing are where is the current revenue coming from? Could these new strategies greatly affect that income? These answers will help guide you to the right investing decisions.
Published 2/20/2021
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