Tuesday, March 31, 2020

Facebook Pledges $100M for News Outlets

Facebook Inc. is pledging $100 million in grant money and promised ad spending to help struggling news outlets weather the financial blow of the coronavirus outbreak, the Wall Street Journal reports.

News outlets—particularly smaller, local newspapers—face substantial advertising revenue declines as shuttered or disrupted businesses pull back spending. While readership has spiked and some media companies have enjoyed increases in online subscriptions, the advertising drop is already forcing many outlets to reduce pay or lay off workers.

The tech giant said it wanted to help news outlets avoid such cuts. “This is a time when we need this reporting the most,” Campbell Brown, Facebook’s head of news partnerships, said in an interview. “Advertising money is shrinking fast and even though news consumption is up, it is not making up for those losses, so we are trying to help bridge that gap.”

Facebook’s offering falls into two categories: $25 million in emergency grant funding to help smaller news outlets with immediate needs related to coronavirus coverage, and $75 million in ad spending to help news outlets of all sizes—both in the U.S. and abroad—make up for the expected revenue shortfall.

“Every business is suffering right now, but the news industry has really been struggling, and we are in a privileged position to be able to help,” Ms. Brown said. She said Facebook Chief Executive Mark Zuckerberg “feels that getting accurate news about the virus is vital and that he has a real responsibility here.”

The aid from Facebook likely would still leave the industry with an enormous gap in advertising money. Gordon Borrell, an advertising market analyst, estimates that local advertising will drop by 25% this year, amounting to a decline of roughly $30 billion.

Earlier this month, Facebook announced a separate program to offer $100 million in cash grants and advertising credits to up to 30,000 eligible small businesses.

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