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Facebook (FB) Offers $100M for Coronavirus-Hit News Outlets

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Facebook (FB - Free Report) recently announced a $100 million investment to support journalism, especially local news agencies hit by loss in ad revenues due to the coronavirus pandemic.

The social media giant is investing $25 million in grants for local news organizations via the Facebook Journalism Project. The first round of grants went to 50 local newsrooms located in the United States and Canada.

Notably, emergency grants from Facebook have already enabled The Post and Courier in Charleston, SC, to take down their paywall for coronavirus stories and cover travel costs for reporters in rural areas of the state.

Moreover, the company is also offering $75 million in marketing spend so money is moved to news organizations across the globe.

Facebook had previously pledged to invest more than $300 million in news companies across the United States by 2021, funding reporting fellowships and grants for local papers.

Facebook’s Initiatives for Local News Outlets

While interest in coronavirus has driven a surge in traffic and subscriptions for local news outlets amid virus-driven confinement and lockdown, daily publishers are expected to lose between 30-50% of ad revenues for the month of April, according to Harvard's Nieman Lab.

The $100 million is part of Facebook’s general response to the pandemic and includes a Coronavirus (Covid-19) Information Center with content from the World Health Organization, an effort to scrub the News Feed of dangerous misinformation about the virus, and a ban on ads that try to sell bogus cures or gouge people trying to buy medical equipment.

Additionally, Facebook has also started several other initiatives to fight the coronavirus pandemic. Earlier this month, it announced it would launch a $100 million program consisting of cash grants and ad credits in an effort to help small businesses.

Facebook has also supported fact-checking operations with AFP and other media companies, including Reuters and the Associated Press, under which content rated false is downgraded in news feeds so that fewer people see it.

In October, Facebook had said that it would pay some publishers directly in order to syndicate their stories in Facebook News, a new section of its app.

Facebook Follows Google’s Footsteps

In the recent months Facebook and Alphabet’s (GOOGL - Free Report) Google have stepped up efforts to help news organizations, following criticism that their dominance of online advertising has made it difficult for media to profit from digital operations.

Last week, Alphabet announced donation of more than $800 million in funds and ad credits to businesses, government and health organizations.

The company will provide $340 million in Google ad credits to small and medium businesses active on its platform and $250 million in ad grants for the World Health Organization and many government agencies.

We believe that local news organizations, readers, viewers and listeners across the globe are likely to benefit with such sizable infusion from Facebook and other tech giants.

Zacks Rank & Stocks to Consider

Currently, Facebook carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Apple AAPL and Akamai Technologies, Inc. AKAM. Both stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Apple and Akamai Technologies is currently pegged at 10.7% and 12%, respectively.

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