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Facebook Inc (FB) Gets a Big Thumbs Up From Jeff Bezos of Amazon.com Inc. (AMZN)

Facebook Inc, Netflix Inc are still a buy despite market

Facebook Inc received a big boost after The Washington Post, which is owned by Amazon.com Inc. CEO Jeff Bezos, decided to publish 100 percent of its articles on the social network’s Instant Articles platform. That amounts to more than a thousand articles and wire stories per day.

Facebook Inc, Netflix Inc are still a buy despite market

“We want to reach current and future readers on all platforms, and we aren’t holding anything back,” Washington Post Publisher Fred Ryan said in a statement.

Facebook Ramps Up its News Content

Facebook Inc ’s Instant Articles program has been gradually rolling out since it was first unveiled in mid-May. The platform allows media outlets to publish their content directly on Facebook users’ feeds.

Under the terms of the program, media firms are free to sell their own ads and keep the proceeds. They also have the option of allowing Facebook to sell the ads, in which case, they get to keep 70 percent of the revenue.

The social network giant promises that its own servers would load the content “as much as ten times faster than standard mobile web articles, so you get to the stories you want to read instantly.”

At the time of the launch, Facebook Inc had only partnered with a few major media outlets like the New York Times, the BBC and The Guardian. Since firms are free to send as many stories they wish to the network, so far most have tested the waters with only a few per day. The New York Times, for example, hasn’t yet committed to a firm number, and posts around 30 stories a day on Instant Articles. NBC News too is sending around 30 to 40 posts per day.

Smart Strategy, or Bad for Long-term Business?

The bullish case for partnering with Facebook Inc can be best summed up by the fact that young users seldom visit media websites for news. Most of their source of information is via big social networks like Facebook. So, to reach them, publishers will have to go where they are most likely to spend their online time. Find them. Give them the news. And earn a bunch of advertising revenue in return.

“The Post has seen explosive growth in readership over the past year [and] working with partners like Facebook allows us to further attract and engage those readers,” Ryan said.

The counter-argument that some media analysts put forward is that by handing over all of their content to Facebook, news rooms will grow over reliant on the social network’s ability to direct traffic to their sites. The idea of handing over important distribution power to Facebook Inc is the reason why not many media outlets are committing full-scale to Instant Articles. There obviously are some significant risks to The Post strategy, and the real costs would only become obvious with time.

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