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Facebook to Provide Money for Australia Newspaper Fund – Report

Facebook (FB) will finance a regional Australian newspaper fund as part of a licensing deal with the news industry. Reuters reports the funding will go towards helping Country Press Australia (CPA) members “build their digital businesses and reach new audiences.” The investment also underscores the tech giant’s continued investment in journalism and collaboration with the news industry.

The investment will go towards 170 regional Australian newspapers. However, the terms of the deal are still unclear. The total amount of money that Facebook will provide or how it will be divided has not yet been disclosed. Reuters reports that the parties have only signed a letter of intent to strike a deal.

CPA president Andrew Manuel expects Facebook’s funding to go a long way in enhancing original public interest in Journalism. (See Facebook stock chart on TipRanks)

The “Innovation fund” comes in the aftermath of new legislation that requires Facebook and Alphabet (GOOGL) to negotiate for content payments with media outlets or face government arbitration. The two tech giants had initially campaigned against the new law, with Facebook temporarily removing all content from its newsfeeds in the country. (See Alphabet stock chart on TipRanks)

Argus Research analyst Joseph Bonner recently reiterated a Buy rating on Facebook but raised his price target to $410 from $385, implying 15.59% upside potential to current levels. However, the analyst remains wary of antitrust and regulatory issues despite e-commerce advertising growth continuing to drive Facebook’s solid results.

“Both user additions and average revenue per user remained robust in 1Q, leading to strong revenue growth. A primary revenue source is direct-response advertising, the type of advertising used in e-commerce, which has certainly benefited from the stay-at-home environment,” Bonner stated.

Consensus among analysts is a Strong Buy based on 29 Buys, 4 Holds, and 1 Sell. The average Facebook price target of $390.47 implies 10.08% upside potential to current levels.

TipRanks data shows that financial blogger opinions are 94% Bullish on FB, compared to a sector average of 69%.

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