Facebook announced on Feb. 23 that it will restore news for its users in Australia in the coming days after reaching an agreement with the government regarding its proposed law for news content.
Facebook’s (FB) Managing Director for Australia and New Zealand, William Easton, said, “After further discussions, we are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them.”
“As a result of these changes, we can now work to further our investment in public interest journalism and restore news on Facebook for Australians in the coming days,” Easton added.
Facebook’s VP, Global News Partnerships, Campbell Brown said in a separate statement that the company will be able to support small and local publishers following the discussions with the Australian government. Brown added, “Going forward, the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation.”
Last week, the social media company blocked news feeds for users in Australia after a dispute with its government escalated over the proposed legislation. (See Facebook stock analysis on TipRanks)
According to Australia’s proposed law, news media outlets can negotiate collectively or individually, over content that drives traffic to Facebook and Google websites. If the parties fail to reach an agreement, an arbitrator appointed by the Australian Government will set the fees for both parties.
Earlier this month, Tigress Financial Partners analyst Ivan Feinseth reiterated a Buy rating on the stock. Feinseth said, “FB continues to benefit from the COVID-19 pandemic driving greater online interaction, increased average daily and average monthly users, and increased user engagement.”
“FB also continues to benefit from ongoing digital advertising growth, increasing users, and growing user engagement through its ongoing innovation and platform expansion into e-commerce and more interactive application capabilities,” the analyst added.
The rest of the Street is bullish about the stock with a Strong Buy consensus rating. That’s based on 32 Buys, 3 Holds and 1 Sell. The average analyst price target of $341.85 implies 31% upside potential to current levels.
According to the TipRanks Smart Score system, FB scores a 5 out of 10 indicating that the stock is likely to perform in line with market averages.
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