Yahoo Finance Facebook may directly host news content
Facebook (FB) may be looking to get into the business of news.
The social networking giant is reportedly holding talks with media companies to host their content directly on the Facebook site. According to The New York Times, media organizations could receive some revenue from advertising that runs alongside their content.
Currently news sites including National Geographic, BuzzFeed and The New York Times are participating in talks with Facebook. Yahoo Finance Senior Columnist Michael Santoli thinks this could be positive for both media companies and Facebook, as it will create a more streamlined user experience.
“I think it’s a realization that Facebook is so important as a distribution mechanism for news outlets,” he says. “It's all about user experience and the clunkiness of that experience. If in fact when you go to a link on Facebook and it's to some outside media company… you have to toggle back and forth, and that sort of is not ideal, especially if you are reading on your phone.”
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Santoli notes that media companies will face risks if they allow Facebook to host their content. Media organizations won't have the ability to track usage and browsing history if traffic is not directed to their site.
“You have to essentially rely on a third-party distributor to kick back some ad revenue to you. If it becomes the way of the world down the road, who's to say you're still going to have that same advertising take," he says. "It's definitely complicated. I think a lot of media organizations have preferred to try and keep things in-house with their own sites, but not everyone of them has been able to do it. I think some will be more eager than others to just let Facebook do it.”
Ultimately, this will be a win for Facebook, adds Santoli.
“Facebook would prefer to have you just stay. I think that's the reason that Facebook stock is at a new all-time high and it has a $235 billion market value is because people assume it's the new television, in terms of how many hours of the day [people] are spending on it," he says. "Facebook has kind of the easier job here, it will just do it for you and share the revenue. It's the media companies that have to decide whether to give that up."
