Mark Zuckerberg's Meta's Stiff Stance on Revenue Sharing Could Cost Billions to News Publishers

Zinger Key Points
  • Facebook's traffic referrals to news sites plummet, dropping to 6% in December from 14% in 2018.
  • Online content publishers flagged hazards of generative artificial intelligence.

Meta Platforms Inc META, the parent company of Facebook and Instagram, faces a significant decrease in traffic referrals to news outlets

Mark Zuckerberg’s social media apps contributed just 33% to overall social media traffic for major news sites in December, down from 50% a year earlier, the New York Post reports

The news publishers had a major showdown with companies like Alphabet Inc GOOG GOOGL Google, and Meta Platforms for lack of reimbursement for using their content. 

Online content publishers also flagged hazards from artificial intelligence technology’s capabilities since the arrival of chatbots.

Facebook’s external traffic referral volume from social media and search engines dropped to 6% in December, a sharp decrease from 14% five years ago in 2018.

Also Read: Meta Platforms’ Bright Future: Citi Analyst Predicts Strong Growth In Ads, AI Innovations

Mother Jones, a political news nonprofit, exemplifies the impact, experiencing a 99% drop in Facebook traffic since its peak in 2017. 

This decline reflects Meta’s assessment that news content is more problematic than beneficial, NY Post writes. 

Columbia University’s analysis suggests that Facebook should pay publishers at least $1.9 billion annually as a fair share of ad revenue. Google, in comparison, should spend between $10 billion and $12 billion yearly. 

Despite this, Meta has resisted legislative efforts in the U.S. and other countries to mandate revenue sharing with news outlets for their content.

The company had a similar standoff in Australia in 2021. In the U.S., Meta has threatened to remove news content for California users.

Price Action: META shares traded higher by 0.99% at $389.01 premarket on the last check Wednesday.

Also Read: Google, Meta, Qualcomm: What’s Brewing Behind Their Unseen Tech Coalition?

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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