Faced with legal and political pressures, Facebook and Alphabet Inc.’s
Google had committed billions of dollars to support media organizations
worldwide, many of which are small or regional businesses struggling to
survive in the digital world.
The initiative was applauded by many news publishers who received
handsome money and other supports, in the form of grants for various
activities, like fact-checking, training etc, amidst the declining
But, on the other hand, there are many news publications that believe
that such initiatives are no more than PR stunts. They argue that the
funding by these internet giants is minuscule to compensate the billions
of dollars lost by publishers due to the monopoly of these tech giants in
the advertising space which is now being driven by technology.
Where Did The Money Go
- Early 2020, Google faces the brunt of inequivalent support to local
- With rising flak against Facebook at the US Congress meet,
Facebook too became part of the issue.
- In late 2020, Google aims to put forth 300 million towards the
- Later on, Facebook also donates 300 million for the exact cause.
- A total of $600 million funds was created by Google and Facebook
to support media outlets for three years.
- Google had selected 198 million dollars in expenditure channels,
including 81 million dollars for elevating quality media initiatives
such as coaching on utilizing Google products in journalism.
- Google lists over 6,250 partners in the project, spanning from the
Associated Press and BuzzFeed News to the Cook Islands News in
the South Pacific.
- Facebook, on the other hand, announced that the 300 million
dollars it had set aside had been entirely spent, with more than
half of it supporting local reporting. In addition, the business spent
80.3 million dollars on signing statements, with a quarter of that
going to a solution that enables local news organizations to attract
additional digital customers.
The Bone of Contention:
Publishers arguing that the companies are minting billions of dollars
from ad revenue every year but making an insignificant contribution to
the news industry.
In FY’20, Google (Alphabet Inc) posted $182.27 billion in revenue while
advertising accounting for 71% of it. Similar, Facebook’s total revenue of
$85.96 billion was driven by advertising only.
Several news editors have stated that they are urging the internet
companies to pay more for material and place a greater emphasis on
Some critics viewed the programs, which included 300 million dollars in
commitments from each corporation, as a ruse to appease publishers
and produce positive press. Both tech corporations are involved in legal
conflicts around the world over remuneration for news material, as well
as antitrust cases filed by regulators and publishers.
News publishers are definitely not happy with the contribution and
support announced by Google and Facebook, especially when they have
released limited information about the spent of $600 million.
These giants are accused of enjoying a duopoly on advertising space by
leveraging on the news actually being produced by news outlets.
This leads us to a question “Is the contribution of $600 million by Google
and Facebook no more than peanuts considering the global ad spending
is estimated to grow 5.8% to become a $579 billion market in 2021?