New York Times recently reported that Facebook is in talks with a pool of publishers to host news content on its own website. New York Times, BuzzFeed and National Geographic are among the most probable contenders. Facebook has made a deal to share its ad revenue with those publishers. According to the deal made, publishers can keep all the revenue from the associated ads that they sell, but if ads are sold by Facebook then it would keep 30 percent of the revenue.
What makes this deal so special ? Who would it benefit ? Let's explore...
According to the reports of Facebook, there has been a considerable rise in the clicks to the Trending section on Facebook. More people are hooked up to the trending topics shown by Facebook and a large chunk of people get to know the news headlines from Facebook. So hosting news content by Facebook could be a very good option as it would increase their user engagement and user retention to a large extent. Facebook is in talks with large number of publishers to bring 'Instant Articles' into its website. Benefits of Instant Articles are that, upon clicking any news in Facebook, user won't be taken into the page of that news publisher, rather that person would be shown the news in Facebook itself. So it would consume very less time to load the news content and save user from frustrating experience of large loading time that he faces when he is directed to the news publications' website. In this way Facebook also prevents the user from leaving its website.
So Facebook benefits in keeping the user engaged through its news content and also let user spend more time on Facebook, as the user now will not be directed to any other website for news. It would provide very good experience to mobile users.
Now talking about news publishers, they would take the benefit of large user base of Facebook, which is now 1.4 billion monthly active users. On providing good content on Facebook, they can get a large chunk of users to subscribe to or bookmark their original website. Also they get the benefit of keeping all the revenue that they generate from their associated ads and 70 percent of the revenue if ads are sold by Facebook.
So this could be a win-win deal for both Facebook and publishers as through instant articles both of them get access to a large pool of user base. Facebook will get more user engagement and user retention, whereas publishers will make more money out of their content and ads that are being shared on Facebook. This would also help many brands as they would be indirectly promoted through the news headlines in Facebook.
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