Facebook invest $100M in coronavirus news coverage

Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Dan Howley discuss Facebook’s recent $100M investment in news coverage amid the coronavirus outbreak.

Video Transcript

ALEXIS CHRISTOFOROUS: Dan Howley now, our tech correspondent, for a look at Facebook. And, Dan, I understand Facebook is throwing a lot of money at the journalism industry amid this pandemic. What are they doing?

DAN HOWLEY: Yeah, they're sending $100 million to the journalism industry via grants that they're going to be providing to local news organizations in an effort to help keep those businesses afloat as the coronavirus continues to impact different sectors of the economy. Now when you go into kind of a recessionary period or any kind of downturn in the market, you start to see this pullback in the broader economy. The first thing that generally gets cut is marketing budgets, and that's really where journalism and journalism organizations make the bulk of their cash, obviously from ad sales.

So Facebook, recognizing that, says that they're donating this $100 million as part of their Facebook journalism project. They previously donated a good amount as well, but this is on top of that existing fund that they were already offering. And this is going to go to local newsrooms to ensure that people are able to do the kind of reporting on the ground that really has the most impact that you may not hear from larger national organizations.

But it is also worth pointing out that the reason why a lot of journalism organizations, newsrooms are so strapped for cash to begin with is because of Facebook, because they obviously make up the bulk of advertising online now, along with Google and increasingly Amazon, and that kind of advertising is what the journalism industry and the news industry relies on for its primary source of revenue. So it's kind of like being robbed and then someone saying, hey, here's your stuff back.

ALEXIS CHRISTOFOROUS: Right, a little ironic. I also want to talk about state attorneys general trying to get social-media companies to crack down on price gouging. I mean, it's insanity. We're seeing you know, these N95 masks, a box of them going for, like, $4,000. What is Facebook in particular doing about this?

DAN HOWLEY: Yeah, they're also trying to crack down on this, delist some of the groups that are selling things. This isn't just on Facebook though. It's also obviously on Amazon. They've taken a lot of heat for this. And eBay as well-- eBay another place where you're starting to see a lot of this price gouging going on. It's everything from masks to gloves to toilet paper, believe it or not. So it's really across the board, and it's kind of a way for people to make a quick buck at the expense of others. So we're seeing these groups-- these companies try to take these down as fast as possible.

ALEXIS CHRISTOFOROUS: Yeah, kind of disgusting and infuriating at the same time. Dan Howley, thank you very much.