Facebook’s (Facebook) latest major announcement is that it is going to pay content creators to use its products … In a truly shocking move, Facebook announced that they will be paying content creators to use their products, with the first batch of payments set to be made when Facebook’s (Facebook) new video service, dubbed Watch, is launched in the next few months. The service will be available on both mobile phones and computers.
It is not everyday that we discuss the monetary value of an advertisement, but this is what appears to be happening when Facebook is set to pay a billion dollar deal to media companies. According to Facebook, the service will pay publishers $5 million for every 1 million video views on its platform. This is a staggering amount for a company that is only in its sixth month of operation, which makes this a good deal for the social media network.
Daily business meeting
14. July 2021Updated
15. July 20, 2021, 12:05 p.m. AND
15. July 20, 2021, 12:05 p.m. AND
Facebook is trying to hijack influencers away from TikTok and YouTube.Credit Jim Wilson/The New York Times
Facebook is creating a program to pay $1 billion to writers by the end of 2022, Facebook CEO Mark Zuckerberg said Wednesday, as part of an effort to attract influencers to its platforms.
According to the social network, the $1 billion will be distributed to creators of all kinds to encourage them to create original content and publish it on Facebook. Influencers will be able to earn money if they use certain Facebook and Instagram features or reach certain milestones. For example, if editors regularly do live broadcasts, they can earn revenue from that.
Over the past year, there has been an arms race between tech companies trying to attract online content creators who can offer great engagement and bring their young fans and cultural relevance to the platform. TikTok and YouTube have built deep relationships with the creator community, helping them make money and developing features that meet their needs.
As part of Facebook’s new invitation program, eligible authors will see notifications asking them to sign up when they open the app. Facebook said it plans to create a special place for writers to track their bonuses on Instagram and Facebook by the end of the year.
This isn’t the first time Facebook has given money to authors in exchange for using its products. Previously, the company paid TikTok and YouTuber authorities to use Instagram features like IGTV, a feature for long videos similar to YouTube, and Reels, a feature similar to TikTok. In December, Facebook promised to invest $10 million in the black gaming community over the next two years and offered some developers guaranteed monthly payments to use Facebook Gaming, a streaming platform similar to Twitch.
Direct payments are increasingly becoming a way to lure creators away from TikTok. In November, Snapchat began giving away $1 million every day to content creators who post content in its Spotlight feature, which works similarly to TikTok. Those payouts have dried up lately, so Facebook’s rewards program may be worthwhile.
According to a report by venture capital firm SignalFire, at least 50 million people now call themselves content creators, and it’s one of the fastest growing segments for small businesses.
On Wednesday, mobile analytics firm Sensor Tower reported that TikTok was the most downloaded app in the world in the first half of 2021. According to SensorTower, TikTok has also passed the three billion installed app mark worldwide, making it the first non-Facebook app to exceed that number.
Twitter had hoped its Floats feature would reduce the inhibition to post. Instead, the company said people were using it mainly to amplify their own tweets.Credit…Twitter
Twitter plans to remove the short-lived Stories feature from its app after it failed to get users excited, the company said Wednesday in a blog post. The Fleet function automatically deletes images or text after 24 hours.
Snapchat introduced the story format in 2013 to bridge the gap between personal messaging features and the public sharing that most people expect from social media platforms. Instagram copied the feature in 2016, and short stories quickly spread to other social networks, including Facebook and LinkedIn.
Twitter was a late entrant to the trend, introducing fleets in March 2020. The company felt that this format would help new users feel comfortable on Twitter and avoid the stress of creating a permanent public post. But according to Twitter, Fleets has not led to an influx of new users on the platform.
We hoped Fleets would help more people feel comfortable participating in the conversation on Twitter, wrote Ilya Brown, vice president of products at Twitter, in a blog post. We created floats to address some of the issues that keep people from tweeting, but floats are primarily used by people who already tweet to amplify their own tweets and communicate directly with others.
Twitter is holding fleets until December 3. August of his service, Marron said. It is the only major social media company to have disabled the Stories feature.
The company will look for other ways to ease the anxiety in new users, Brown said. Twitter executives also said that the company would continue to study the impact of its features and would not hesitate to discontinue projects if they do not resonate with users.
Big bets are risky and speculative, so by definition some of them won’t work, Keyvon Bakepour, Twitter’s chief product officer, said in a tweet about the changes. If we didn’t trivialize functions from time to time, it would be a sign that we are not making much progress.
Lina Khan, chairwoman of the Federal Trade Commission, has asked Facebook to withdraw from the agency’s lawsuit against the company…Pool photo by Saul Loeb
On Wednesday, Facebook asked the new chairwoman of the Federal Trade Commission, Lina Khan, to withdraw from the lawsuit against the company, saying her past criticism of the company prevented her from being impartial in the case.
In a petition filed with the FTC, the company said its due process rights would be violated if it played a role in deciding the future of the case. His criticism of Facebook, his work on a Congressional investigation into the company and his former role at the Open Markets Institute, a group that criticizes tech giants, have been cited as evidence of his bias.
The FTC’s complaint against Facebook, which accused the company of violating antitrust laws when it bought emerging rivals Instagram and WhatsApp, was dismissed by a federal judge in June. The agency has 30 days from the date of the decision to file a new version of the complaint that takes into account the judge’s comments.
Chairman Khan has consistently made well-documented statements about Facebook and antitrust issues from which any reasonable observer could conclude that she was biased in the antitrust case brought by the FTC against Facebook, Christopher Sgro, a Facebook spokesman, said in a statement.
Last month, Amazon made a similar argument by asking Hahn to withdraw from an antitrust investigation against the company, citing her longstanding criticism of the company’s practices.
A spokeswoman for the F.T.C., Lindsay Kreisak, declined to comment.
Buyer in Manchester, England. Analysts said the price rise in the UK included food, second-hand cars, clothing and footwear, food and drink outside the home and fuel.Credit…Phil Noble/Reuters
Annual inflation in Britain rose to 2.5 percent in June, data released Wednesday showed. Sterling and government bond yields rose as investors assessed how the central bank might eventually respond to the continued rise in prices.
This pace is the fastest since August 2018. Since the Brexit referendum in 2016, the UK has experienced a period of high inflation, caused by the depreciation of the pound. Inflation rose 0.5% in June from the previous month, the fifth consecutive month that inflation has risen.
Analysts noted that the price increases were widespread and covered food, used cars, clothing and footwear, food and drink, and fuel. Last month, Bank of England governors said they expected inflation to rise temporarily above the 2% and even 3% target before falling back.
The price increases mainly relate to properties that became very cheap the year before or belong to areas that were reopened after the winter closure. This should allow the Bank of England to continue to assume that the rise in inflation will be temporary, analysts at the Royal Bank of Canada wrote.
The trajectory of potential inflation has kept investors and economists around the world in suspense about whether this growth can be sustained, forcing central banks to act. Tuesday’s data showed that annualized inflation in the U.S. rose to 5.4 percent, the fastest pace in 13 years. On Wednesday, Jerome H. Powell, the Federal Reserve chairman, told lawmakers in the House that inflation had risen sharply and could remain high in coming months before slowing again.
The pound rose 0.3% against the US dollar and fell 0.2% against the euro. The yield on 10-year bonds fell eight basis points, or 0.08 percentage point, to 1.34%.
- Shares on Wall Street were mixed: The S&P 500 was up 0.1% and the Nasdaq was down 0.2%.
- Most European indices are in the red. The Stoxx Europe 600 index fell by 0.1%. London’s FTSE 100 index fell 0.5 percent.
- Oil prices have fallen. West Texas Intermediate crude oil futures fell 3.3 percent to $72.72 a barrel.
- Bank of America shares fell 2.5 percent after it reported revenue of $21.5 billion, down 4 percent from the same period a year earlier and below analysts’ expectations.
- Delta shares fell 1.6% after the airline reported that quarterly profit was down 55% from the same quarter in 2019. The company’s sales are down 43% from two years ago.
Bank of America said the recovery in consumer spending after the pandemic crisis resulted in a successful quarter.Credit…Carlo Allegri/Reuters
Americans are increasing their spending. This situation is advantageous to the big banks.
Bank of America said Wednesday that second-quarter profit rose to $9.2 billion, more than double last year’s $3.5 billion, thanks in part to the release of some of the funds set aside last year. On Wednesday, two other major banks, Citigroup and Wells Fargo, reported results and earnings that exceeded analysts’ expectations.
Our clients see good growth opportunities in a recovering economy, Brian Moynihan, chief executive officer of Bank of America, said during a conference call with analysts. More importantly, we are seeing an increase in activity, he said, pointing to the growth in consumer spending and deposits in the first quarter, when the country was still recovering from a worrisome winter and vaccination programs had just begun.
The bank’s chief financial officer, Paul Donofrio, said the company’s losses from consumer defaults fell to the lowest level in 25 years, while its loan balance rose for the first time since early last year. He also set aside $2.2 billion from a bailout fund set up in case a wave of defaults never happened thanks to a robust federal stimulus program that has helped many Americans stay afloat.
However, the results are not encouraging: Revenue was $21.5 billion, down 4% from the same period last year and below analysts’ expectations. At Bank of America’s consumer business, average outstanding loans fell 12% from a year earlier to $282 billion, slightly dampening earnings growth.
Bank of America’s share price fell Wednesday as investors focused not on immediate results, but on the company’s ability to increase the number of loans on its books and earn more interest on those loans. The stock ended the trading day down nearly 3%.
Despite strong results – JPMorgan Chase and Goldman Sachs reported solid quarters on Tuesday – investors are skeptical that the economic recovery that has buoyed the banking giants is starting to falter.
Optimistic statements from executives this week could not allay these fears and led to a general decline in bank shares. Citi shares initially rose after the earnings announcement, but regained ground towards the end of the session even though the report was better than Wall Street expected.
Wells Fargo shares rose 4% Wednesday, although that may reflect the bank’s future from a regulatory standpoint rather than its economic performance. During a phone call with executives, analysts repeatedly raised the possibility that the Federal Reserve would lift the asset limit imposed after a series of problems at the bank, including a fake account scandal that severely damaged the bank’s reputation.
Citi’s profit was $6.2 billion on revenue of $17.5 billion. Analysts had forecast slightly lower revenue of $17.2 billion. Citi’s earnings per share of $2.85 beat analysts’ expectations by 89 cents. Wells Fargo’s profit of $1.38 per share exceeded expectations, much better than the $1.01 per share loss a year earlier, and revenue was $20.3 billion, up 11% from 2020.
Like Bank of America, Citi and Wells Fargo have also set aside some of the money they use to prepare for loan losses due to the pandemic. Citi reduced its reserve by $2.4 billion and Wells Fargo by $1.6 billion.
Jane Fraser, CEO of Citi, said the company is benefiting from a faster-than-expected economic recovery.
Global retail revenues declined 3% compared to the first three months of the year and 7% compared to the same period last year, partly due to lower average credit card debt. Nevertheless, the division made a profit, whereas a year earlier it was still in the red: At the time, the bank had to set aside a significant amount of money to cover future losses. After the economic outlook improved, it joined the other banks and released some reserves.
Charles W. Scharf, CEO of Wells Fargo, also said the strength of the economic recovery is favorable.
The economic outlook for the rest of the year is promising, he said during a conference call with analysts. However, the risks remain, he added. Interest rates are volatile, which can affect the amount the bank can earn in interest charges.
While the banks’ retail divisions are showing some strength, the trading divisions that spurred activity during the high market volatility of a year ago have slowed. Overall, revenues in the market units of all three banks were lower than last year as traders faced a tidal wave of customer activity in response to the pandemic shocks.
Citi’s trading income fell 30% in the second quarter to $4.8 billion as markets for bonds, commodities and other financial products cooled. At Bank of America, total trading income fell 19% from the previous year to $3.6 billion.
Equity traders at both banks increased their earnings by more than 30%, but this was not enough to offset the weaker performance of their bond trading counterparts.
Emily Flitter contributed to this report.
Indian meal delivery company Zomato has received more than $562 million from various domestic and foreign companies in the run-up to its IPO on Wednesday, out of the $1.3 billion it sought to raise in its IPO.
The first batch of shares sold by the company to the public was outbid as interest from retail investors was high. This is despite the fact that some financial analysts have called the loss-making company’s offering expensive compared to that of its global competitors.
The stock sale has valued the company at more than $8 billion so far. The company is selling shares through Friday in what will be the largest offering in the country this year. Zomato was valued at $5.4 billion in a February funding round.
Deepinder Goyal, founder and CEO of Zomato, tweeted on Wednesday that he had ordered a triple breakfast and was chewing on pre-IPO stress.
Founded in 2008, Zomato has quickly become one of the largest meal delivery services in the world. The company acquired Uber’s meal delivery business in India and has a presence in 24 countries and over 10,000 cities.
As blockchain has increased the popularity of online platforms and people are ordering more food online, analysts believe Zomato has great growth potential.
Zomato is in an advantageous position as the online food delivery market evolves, said Sneha Poddar, a financial analyst. Economies of scale allowed losses to be significantly reduced.
Other digital startups in India will have their eyes on I.P.O. this week. In the coming months, other tech unicorns – the term used to designate companies worth more than $1 billion – could make their debuts, including mobile payment app Paytm and online cosmetics retailer Nykaa.
Delta Air Lines says there are encouraging signs that travel is returning to normal.Credit…Elijah Nouvelage/Reuters
On Wednesday, Delta Air Lines reported a profit of $652 million for the second quarter of the year, its first profit since the start of the pandemic and the latest sign that the airline’s recovery is in full swing. The airline had revenue of $7.1 billion.
Delta also noted encouraging signs that business is returning to normal, noting that booking patterns have recovered as customers have purchased longer-term tickets, and that average daily revenue has exceeded Delta’s internal forecast by 20%.
Domestic travel has fully recovered to 2019 levels and there are encouraging signs of improvement in business and international travel, Ed Bastian, the airline’s chief executive, said in a statement.
Business travel picked up as office activity picked up during the quarter. According to the airline, the number of business travelers dropped 60% in June, down from 80% in March.
Despite these encouraging signs, Delta’s quarterly earnings, supported by $1.5 billion in federal stimulus funds, still fell 55% compared to the same quarter in 2019. The company’s sales are down 43% from two years ago.
The number of people flying within the U.S. for vacations or to visit friends and family is back to pre-pandemic levels, but Delta’s domestic travel revenue is down 45% from 2019 due to a drop in business travel.
Revenues from travel to Latin America fell by only 36%, while longer flights across the Atlantic or Pacific Ocean generated around 85% less revenue. Freight revenues, on the other hand, increased by 35%.
Delta also gave an indication of its expected performance for the quarter, which includes July, August and September: Passenger capacity will decrease by 28-30% and revenue by 30-35% compared to the same period in 2019.
Delta has announced plans to buy 29 used Boeing 737s and lease seven used Airbus A350s, some of which will replace older aircraft the airline has taken out of its fleet. This decision contributed to energy efficiency, which increased by more than 7% in the second quarter compared to 2019.
Delta is the first major airline to release its second quarter financial results. American Airlines, United Airlines and Southwest Airlines are expected to announce their results next week.
American offered a preliminary outlook on those results, saying in a securities filing Tuesday that it expects to post a profit for the quarter between a $35 million loss and a $25 million profit.
We’re clearly on the right track, CEO Doug Parker and President Robert Isom said Tuesday in a memo to employees. Our revenue and expense performance in the quarter exceeded expectations, while restoring full capacity and safely transporting a record number of passengers.
According to the Transportation Security Administration, the number of trips within the U.S. is down about 20 percent compared to the same period in 2019. Summer is the busiest season for the industry, but it remains to be seen what the fall will be like, when business travel generally picks up.
- A proposed merger involving a newly formed aerospace company may not go ahead after securities regulators launched one of the first major enforcement actions against special purpose acquisition companies (SPACs). The Securities and Exchange Commission said Tuesday that it had reached agreement with several parties involved in the proposed merger between Momentus, a company that says it develops unique transmission technology, and Stable Road Acquisition, SPAC. Investors were led to believe that the propulsion system had been successfully tested in space, when the test failed, regulators said. This case illustrates the risks inherent in SPAC transactions, as those hoping to reap significant profits from a SPAC merger may not perform sufficient due diligence and may mislead investors, S.E.C. Chairman Gary Gensler said in a statement.
- The United States is hoping that Ireland will drop its opposition to joining the global tax treaty it has been negotiating, now that Treasury Secretary Janet L. Yellen has convinced her Irish counterpart this week that joining the treaty is in the country’s economic interest. This week in Brussels, Yellen met with Pashal Donohoe, Ireland’s finance minister and president of the Eurogroup, a club of European finance ministers. It needs Mr Donohoe’s support because the European Union needs the unanimity of its members to formally sign the agreement, which would require changes to national tax laws. After his meeting with Yellen on Monday, Donohoe was positive and said he would remain involved in the process.
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