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Facebook To Pay Major Media Outlets For Content Exchange: Report

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Facebook plans to launch a news section sometime this fall and is offering millions of dollars to news outlets in exchange for the rights to license their content, the Wall Street Journal reported, citing people familiar with the matter.

Facebook representatives informed executives of major news outlets that they are willing to pay as much as $3 million per year to license headlines, article previews and entire stories, according to the WSJ report. The news-licensing deals would be for a period of three years.

Facebook is said to have approached Wall Street Journal and MarketWatch parent Dow Jones, Bloomberg, Washington Post and Walt Disney's ABC News, among other major news outlets.

The move by Facebook comes amid criticism that the social media giant and Google, which dominate the digital advertising market, have garnered much of the advertising revenue that used to earlier go to newspapers.

In January, Facebook said it will invest $300 million over the next three years in news initiatives, with a focus on local news partnerships and other programs. The company noted that the investment will go toward reporting grants for local newsrooms, expanding Facebook's program to help local newsrooms with subscription business models and investing in nonprofits aimed at supporting local news.

Research firm eMarketer Inc. has said that based on its estimates, Google and Facebook are expected to maintain their duopoly in the U.S. digital advertising revenue market for the next few years.

Facebook, in July, reported a second-quarter profit that trumped Wall Street estimates, driven largely by higher-than expected revenue growth reflecting increase in ad revenues. Mobile advertising revenues continue to be dominant contributor to Facebook's ad revenues as it represented 94 percent of advertising revenue for the quarter.

The company's total advertising revenues for the quarter surged 28 percent to $16.62 billion.

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