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Alphabet Comes Down on Fake News Websites, Restricts Ads

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Alphabet Inc.’s (GOOGL - Free Report) Google is undertaking efforts to prevent fake news websites from playing smart with its AdSense advertising network.

On Monday, the company said that it will no longer place ads on pages that misstate, misrepresent or conceal information about publishers or their contents.

In a similar move, Facebook (FB - Free Report) also announced that it intends to stop the spread of fake news through the Facebook Audience Network. The policy includes misleading, illegal or deceptive sites.

The move comes on the heels of mounting criticism against Silicon Valley members like Google, Facebook and Twitter (TWTR - Free Report) for peddling fake stories about the U.S. presidential election that are said to have inclined voters toward Republican candidate Donald Trump.

What Sparked the Move?

Last month, a BuzzFeed News report showed that some publishers in Macedonia created websites and spread false news that defamed Democratic candidate Hillary Clinton.

The news broadly shared on Facebook made people click on links that took them to those fake websites that could then make profits on the traffic through Adsense.  The news led to widespread criticism of Google and Facebook.


Taking Stock of all the Misinformation

Google’s AdSense network is extremely important from a business standpoint. Google already has a policy per which it does not allow Google ads on sites that spread violent content or pornography.

We believe that the policy update will help Google not only address the growing controversy about misinformation on the web but also put up a clean image to advertisers who do not want their products to appear alongside dubious content.

Zacks Rank and Other Picks

Currently Alphabet has a Zacks Rank #3 (Hold) stock. A better-ranked stock is Yahoo with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Notably, for the current year, the consensus estimate for Yahoo has gone up by 76.9% in the past 60 days, thanks to eight upward revisions compared to none lower.

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