Every week we round up the biggest business stories. This week: Verizon buys a former internet giant, Facebook expands its news options, oil-heavy provinces may enter recession, road trips are on the decline, trouble at Bombardier, the possibility of a key lending rate cut in Canada, and house prices are up across the country.
Verizon to buy AOL
The communications giant announced this past Tuesday that it had agreed to purchase former internet giant AOL for US$4.4 billion. While the company that once held a near monopoly on home internet use has fallen far in recent years, Verizon is interested primarily in its video advertising placement service. In the grand scheme of things this is a relatively small acquisition for Verizon, though the low risk purchase could pay big dividends.
Facebook makes a news deal
Facebook got together with nine of the largest news web-publishers to launch Instant Articles. With this new platform, the news companies will be able to post articles directly onto Facebook, bypassing their own websites entirely. Among the participants are the BBC, the New York Times, the Guardian, NBC News, and more. This should cut costs for the news publishers and make stories more easily sharable on the social platform.
Newfoundland and Alberta to enter recession?
According to BMO, Newfoundland and Labrador will enter a recession this year, and Alberta may follow suit. This is a direct result of the low crude oil prices that consumers have been enjoying recently. However, recent signs that oil prices are rebounding could be good news for these provinces and the Canadian economy as a whole.
Domestic road trips on the decline
Despite the low gas prices, many Canadians are not deciding to plan domestic road trips as a result. Instead, plane and international travel appear to be increasing at the direct expense of long car trips.
Layoffs at Bombardier
The aerospace and transportation company announced this week that they would layoff over 1750 people. The cuts are in the aerospace division and are a result of the lack of demand for planes. This is just the latest in a string of bad news for the Montreal based company, with shares at their lowest level since 2004.
Another rate cut in Canada?
One of the largest US banks, Bank of America, is predicting that the Bank of Canada may cut its key lending rate again this year. As investors move towards more reliable returns in the US, the Bank of Canada may be forced into action to compensate.
House prices are up
The average house price across the country is up to $448,862 which represents an increase of 9.5% over one year according to the Canadian Real Estate Association. It should be noted however that without Toronto and Vancouver, the average price is $339,893, which represents a gain of 3.4%.
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