Google and Facebook invest $400 million in global news events

7 minutes

10 June - Facing regulatory and political pressure, Google and Alphabet Inc. in recent years invested a combined $400 million in global news events - many of these companies started in a digital age.

According to the announcements of tech giants, a handful of media outlets received financial and other help for everything from fact checking and reporting to training. Some publishers express gratitude for donations that they say are essential as advertising revenue plunges.

But several media analysts and news business executives told Reuters that the funding - set to last three years - does not quite compensate for the billions of dollars publishers lost as the tech companies gobbled up the digital marketing market. According to eMarketer, a market research company, Google and Facebook accounted for 54% of the US digital advertising revenue in 2020.

Some critics dismissed the projects, including contributions of $300 million from each company, as a way to good PR and to blunt complaints from publishers. In the worldwide, both tech companies face battles over compensation for news content, as well as antitrust lawsuits from regulators and publishers.

This 'occasional benevolence' is a drop in the bucket, said Maribel Perez Wadsworth, publisher of Gannett's USA Today Network and President of USA Today Network, which participates in a fact-checking program sponsored by Facebook. The publication 'News' is not looking for charity. We're simply asking for fair shots and a level playing field in India.

Emily Bell, director of the Tow Center for Digital Journalism at Columbia University, said money is vital to newsrooms in the short-term. They are not given at a level that really has an impact on the field, and it isn't really changing anything.

The tech giants told Reuters that they are genuinely committed to support local and regional outlets, and both will continue to offer support after the $600 million initiatives expire in the coming months.

The goal of the Facebook Journalism Project, as it is known, is to help publishers successfully transition and prosper in today's digital world, where they have to find a very specific audience in order to be successful, said Campbell Brown, Head of News Partnerships at Facebook.

Google is 'oriented around making sure there is a healthy and vibrant ecosystem of quality journalism, said Ben Monnie, the Director of Global Partnerships at Google.

Reuters participates in initiatives funded by both Google and Facebook. Under the Facebook Journalism Project, for example, Reuters received funding to develop a digital media training course for journalists. Neither Facebook nor Reuters would disclose the amount of money distributed.

Both Google and Facebook have benefited from the $600 million contributions to the news industry. For instance, the companies did $1 billion each last year in grants and deals to pay a world wide range of media for content worldwide. As part of this commitment, Google pays publishers such as Reuters to create and curate content for its news showcase snippets for its news and Discover Apps.

The Reuters Institute for the Study of Journalism, which is largely funded by the Thomson Reuters Corporate Foundation, announced in 2020 that it has received about $19 million in grants from Google and $4.6 million from Facebook.

Both Facebook and Google say publishers get only from using their platforms, which drive traffic that helps drive advertising revenue and subscriptions.

Brown said 'We are a free service available to anyone who wants to post content. The participation of the publishers suggests they are gaining value from the platform without us making these additional investment.

According to business filings, Facebook, a popular online search engine and Google, by far the most popular social media company in the world, generated $607 billion in advertising revenue during the last 3 years. The companies are among the largest corporate funders of the global news industry.

The two platforms have released limited information on how billions in grants and services have been spent, often giving broad descriptions or examples without financial details.

Google has indicated buckets of spending worth about $198 million - including $81 million devoted to improving quality journalism’ such as training on how to use Google products in reporting. The company announced last year that it expects to spend the full $300 million by year's end and lists over 6,250 "news partners" in the project, which range from the Associated Press and BuzzFeed News to the Cook Islands News in the South Pacific.

The company has said that its $300 million spent so far have been fully spent, more than half of it in support of local news. The company's local announcements account for $80.3 million, a quarter of which went to a program that helps public newsrooms attract more global subscribers. A company spokesperson, Adam Isserlis, said the project also includes proprietary deals with publishers, at whom the details are confidential.

Reporters spokesman said they are prodding the tech giants to pay more for original content and to continue to prioritize new reports. Facebook and Google say that they have already changed their algorithm to do just that.

Meanwhile, some publishers see a lifeline. An executive at the Post and Courier in Charleston, South Carolina, said a Google-funded training lab could help the paper determine the volume and price of digital subscribers that would cover their expenses.

Larry Knobel from Cityside, a nonprofit in Oakland, California, said he used $1.56 million from Google to launch and support an online local news website (Oakside).

I think their big interest is that they want a healthy news environment, he said.

Other publishers are dissatisfied or ambivalent, and see tech goliaths as both friend and foe.

The companies have a huge impact on the advertisers' revenue because their algorithms determine whether an article shows up as well on a Google search or in Facebook's news feed.

Google runs one of the largest online advertising exchanges for digital ads, which are automatically bought and sold via software programs. Since Google has competed both as the largest buyer and seller on that exchange, it can continue its business to itself, some publishers and other critics have alleged.

In the USA alone, digital ad revenues for newspapers fell from $49.4 billion in 2005 to $14.3 billion in 2018.

On June 7, under a settlement with France's antitrust watchdog https: technology 220 - mln-euros - abuse-market power-ad-business -- 2021 - 06 - 07, Google agreed to share more data with ad buyers - thereby reducing some of its competitive advantage over publishers.

Google and Facebook in the other legal challenges https: article tech-antitrust -- factbox-int factbox-big tech-comes - under-rapid - fire-of — five-u - disputes lawsuits - more-probes - underway-idUSKBN 28 R 39 Q. The Nation, a progressive U.S. news website, and the West Virginia-based newspaper company HD Media are among publishers https: technology Daily-files-antitrust - lawsuit-against-Google - 2021- 04-20 to file antitrust lawsuits against one or both tech giants in the last few months. Both U.S. authorities have filed antitrust suits against both as well, and some states have asked website-tech-antitrust-google texas-nine-states-accuse-google of working with Facebook to stop-antitrust law-idUSKBN 28 Q 2 RL have accused Google of unknowingly dominating the process of placing online advertising.

In responses to some of the suits, publishers dismissed claims that their business practices hurt publishers. Google said that people use Google because they choose not because they can't.

The editor of the Seattle Times said his paper'' has participated in programs supported by Google and Facebook. But if they had not monopolized ads and gamed the search way they have, newspapers would still be making money, he said.

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