Facebook shares slip following news blackout move in Australia | SaltWire | Gerald’s Views

Facebook shares slip following news blackout move in Australia | SaltWire | Gerald’s Views

(Reuters) – Facebook Inc shares slipped around 1% on Thursday as Wall Street assessed the wider ramifications of its move to block all news content in Australia.

The surprise escalation of the battle over a law which would require Facebook and Google to reach deals to pay news outlets was denounced by media, politicians and human rights groups as it became clear that official health pages and emergency warnings had been scrubbed along with news sites.

Bernstein analyst Mark Shmulik, however, said investors were likely to judge Facebook’s stand against the legislation as “prudent”, given the potentially wider implications of similar moves following in other big global markets.

“While I believe Facebook said that news links only account for 4% or so of content, the danger here is contagion if other countries pursue similar legislation with broader definitions of who is a publisher – could this spiral into Facebook paying influencers for their posts?”, Shmulik said.

Facebook has flagged commercial risks around copyright and content moderation consistently to investors in recent years, while successfully riding out the public relations fallout as its advertising revenue surged.

Along with Google owner Alphabet, it now controls more than half of the digital advertising markets globally.

The company’s shares, up 33% last year even as the platform was widely criticized for its handling of hate speech and misinformation related to COVID-19, dipped 1% in pre-market trade in New York.

Like others of the “stay-at-home” stock market winners from the past year’s COVID-19 lockdowns, Facebook has soared in value and is now worth almost $800 billion. Filings show that in the past three months, company insiders have sold $788 million of shares.

Another analyst, Mirabaud Securities’ Neil Campling, contrasted Facebook’s “PR disaster” with Google’s unveiling this week of a multi-year deal for news content with Australian tycoon Rupert Murdoch’s News Corp.

(Reporting by Ayanti Bera and Chavi Mehta in Bengaluru, Thyagaraju Adinarayan in London; Editing Patrick Graham, Bernard Orr)

This content was originally published here.

This content was originally published here.

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