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Facebook (FB) May Get a News Tab Soon: Should Apple Worry?
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News has emerged as the next area of contention with tech behemoths like Facebook and Apple (AAPL - Free Report) taking initiatives to increase their presence in the space.
Facebook is now planning to launch a dedicated news tab, in collaboration with publishers. CEO Mark Zuckerberg recently revealed the idea in a conversation with Axel Springer CEO Mathias Dopfner, the largest publisher in Europe. Per Bloomberg, Facebook is “willing to pay publishers for high-quality content.”
Facebook’s endeavor comes on the heels of Apple’s recent announcement of the launch of the subscription-based Apple News+ App in the United States and Canada, starting May 25. Moreover, the service will soon be made available in the U.K. and Australia.
Partnering Publishers to Benefit Facebook
According to the Reuters Institute Digital News Report 2018, the usage of social media and aggregators for news is declining, primarily due to trust and privacy issues, as well as fake news menace. The report, that surveyed more than 74,000 people in 37 markets, stated that only 23% of respondents trust the news they find in social media.
The report also stated that consumers are reluctant to view news videos within publisher websites and apps. More than half of consumption happens on third-party platforms like Facebook and Alphabet’s (GOOGL - Free Report) YouTube.
This unique scenario presents a significant growth opportunity for both Facebook and news publishers. High-quality news from trusted publishers is likely to lower the proliferation of fake news and boost Facebook’s brand image among its users. Reportedly, the company might hire curators to maintain the quality of news.
Publishers are expected to benefit from improved monetization opportunity in the new tab. Facebook will likely share some of its advertising revenues as the News tab service will be free for users.
The monetization offering will also help this Zacks Rank #3 (Hold) stock to remain compliant with the new European Union (EU) copyright rules. As noted by Bloomberg, the company is required to compensate publishers and creators of news articles, songs and videos which appear on its website.
Facebook, which has been primarily blamed for the decline in news paper and print media business, has lately been taking initiatives to support journalists. This includes investment of $300 million on news partnerships for the next three years.
Improved quality of news and trustworthiness will likely boost user engagement, which will eventually attract advertisers — Facebook’s primary source of revenues. In the last reported quarter, advertising revenues soared 30.2% year over year to $16.64 billion and accounted for 98.4% of total revenues.
Apple’s strong installed base of more than 1.4 billion active devices is a major growth driver for Apple News+.
Apple has stated that the increasing percentage of users paying for at least one of its services has been a major growth factor, driving Services revenues in recent times. The company also noted that the launch of fresh services has attracted users. We expect this momentum to continue for Apple News+ as well.
This apart, partnerships with prominent publishers are also a key catalyst. The subscription-based Apple News+ will feature content from popular publications like The Wall Street Journal, People, Los Angeles Times, Vogue, ELLE and National Geographic Magazine. The service also includes content from 300 magazines, and other top newspapers and publications.
Subscribers will have access to the latest and old content from magazines, including Vogue, ESPN The Magazine, Food & Wine, The Oprah Magazine, New York Magazine to name a few.
Apple News+ is part of the Apple News app that had more than 85 million monthly active users (MAUs) in the United States, the U.K. and Australia at the end of first-quarter fiscal 2019. Apple also carries Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Tech Giants in the Fray
Apart from Facebook and Apple, tech giants like Google and Microsoft (MSFT - Free Report) have presence in the news app space through Google News and Microsoft News.
Google News, the replacement for Google Play Newsstand, has gained strong traction. Notably, Google parent — Alphabet — has rolled out the Google News Initiative (GNI) and plans to spend $300 million on its efforts to combat the fake news epidemic.
Microsoft News, formerly known as MSN News, has collaborations with thousand of premium publishers and more than 3,000 brands in all major global markets.
Both Alphabet and Microsoft carry a Zacks Rank #3, at present.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Bigstock
Facebook (FB) May Get a News Tab Soon: Should Apple Worry?
News has emerged as the next area of contention with tech behemoths like Facebook and Apple (AAPL - Free Report) taking initiatives to increase their presence in the space.
Facebook is now planning to launch a dedicated news tab, in collaboration with publishers. CEO Mark Zuckerberg recently revealed the idea in a conversation with Axel Springer CEO Mathias Dopfner, the largest publisher in Europe. Per Bloomberg, Facebook is “willing to pay publishers for high-quality content.”
Facebook’s endeavor comes on the heels of Apple’s recent announcement of the launch of the subscription-based Apple News+ App in the United States and Canada, starting May 25. Moreover, the service will soon be made available in the U.K. and Australia.
Partnering Publishers to Benefit Facebook
According to the Reuters Institute Digital News Report 2018, the usage of social media and aggregators for news is declining, primarily due to trust and privacy issues, as well as fake news menace. The report, that surveyed more than 74,000 people in 37 markets, stated that only 23% of respondents trust the news they find in social media.
The report also stated that consumers are reluctant to view news videos within publisher websites and apps. More than half of consumption happens on third-party platforms like Facebook and Alphabet’s (GOOGL - Free Report) YouTube.
This unique scenario presents a significant growth opportunity for both Facebook and news publishers. High-quality news from trusted publishers is likely to lower the proliferation of fake news and boost Facebook’s brand image among its users. Reportedly, the company might hire curators to maintain the quality of news.
Publishers are expected to benefit from improved monetization opportunity in the new tab. Facebook will likely share some of its advertising revenues as the News tab service will be free for users.
The monetization offering will also help this Zacks Rank #3 (Hold) stock to remain compliant with the new European Union (EU) copyright rules. As noted by Bloomberg, the company is required to compensate publishers and creators of news articles, songs and videos which appear on its website.
Facebook, which has been primarily blamed for the decline in news paper and print media business, has lately been taking initiatives to support journalists. This includes investment of $300 million on news partnerships for the next three years.
Improved quality of news and trustworthiness will likely boost user engagement, which will eventually attract advertisers — Facebook’s primary source of revenues. In the last reported quarter, advertising revenues soared 30.2% year over year to $16.64 billion and accounted for 98.4% of total revenues.
Facebook, Inc. Revenue (TTM)
Facebook, Inc. Revenue (TTM) | Facebook, Inc. Quote
Apple News+ to Benefit from Huge Installed Base
Apple’s strong installed base of more than 1.4 billion active devices is a major growth driver for Apple News+.
Apple has stated that the increasing percentage of users paying for at least one of its services has been a major growth factor, driving Services revenues in recent times. The company also noted that the launch of fresh services has attracted users. We expect this momentum to continue for Apple News+ as well.
This apart, partnerships with prominent publishers are also a key catalyst. The subscription-based Apple News+ will feature content from popular publications like The Wall Street Journal, People, Los Angeles Times, Vogue, ELLE and National Geographic Magazine. The service also includes content from 300 magazines, and other top newspapers and publications.
Apple Inc. Revenue (TTM)
Apple Inc. Revenue (TTM) | Apple Inc. Quote
Subscribers will have access to the latest and old content from magazines, including Vogue, ESPN The Magazine, Food & Wine, The Oprah Magazine, New York Magazine to name a few.
Apple News+ is part of the Apple News app that had more than 85 million monthly active users (MAUs) in the United States, the U.K. and Australia at the end of first-quarter fiscal 2019. Apple also carries Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Tech Giants in the Fray
Apart from Facebook and Apple, tech giants like Google and Microsoft (MSFT - Free Report) have presence in the news app space through Google News and Microsoft News.
Google News, the replacement for Google Play Newsstand, has gained strong traction. Notably, Google parent — Alphabet — has rolled out the Google News Initiative (GNI) and plans to spend $300 million on its efforts to combat the fake news epidemic.
Microsoft News, formerly known as MSN News, has collaborations with thousand of premium publishers and more than 3,000 brands in all major global markets.
Both Alphabet and Microsoft carry a Zacks Rank #3, at present.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>