Meta Facebook is reconsidering its commitment to paying for news, causing some left-wing news organizations to prepare for a massive revenue shortfall of tens of millions of dollars.
Facebook has paid average annual fees of more than US$15 million to The Washington Post, and just over $20 million to The New York Times, according to a Facebook insider.
These deals are centered around Facebook’s News section, which curates a range of free articles for readers.
News publishers, which are compensated by Facebook to feature their content without a paywall, signed three-year contracts with the company in 2019 that will expire this year.
According to people familiar with the matter, Facebook has not indicated that it plans to re-up the partnership in its current form, or at all.
Facebook and TikTok
According to insiders, Meta is apparently looking to shift its investments away from news and toward products that attract creators, such as short-form video producers to compete with ByteDance Ltd’s TikTok.
Additionally, Facebook is investing heavily in the metaverse, as it has recently renamed itself.
Meta’s CEO Mark Zuckerberg has also been disappointed by regulatory efforts around the world. These efforts aim to force platforms such as Facebook and Alphabet Inc’s Google to pay for news content on their platforms, the insider said.
It is believed that such moves have dampened Zuckerberg’s enthusiasm to make news a bigger part of Facebook’s offerings.
Zuckerberg’s rebranding to Meta
Meta Platforms, Inc.’s stock price did not immediately improve following its rebranding announcement.
The stock formerly known as Facebook fell 6.43% for the day. Meta is currently trading at $184.00, close to its all-time low reached in late April of $174.95.
Whatever the reason for today’s price decline, Twitter users joked that the ticker change is unlikely to resolve the myriad problems facing the company:
In late October, Facebook CEO Mark Zuckerberg announced the company was changing its name, a move that underscored its commitment to the nascent metaverse as the core of its business.
