Last week, Facebook, Inc. (FB - Free Report) and Alphabet Inc. (GOOGL - Free Report) were dealt a heavy blow, thanks to the alleged distribution of fake information on their platform. This is regarded by many as the primary reason for the surprise victory of Donald Trump against Hillary Clinton in the U.S presidential elections.
After rejecting the allegations initially, Facebook chief Mark Zuckerberg seems to have changed his stance on the matter.
In an extensive blog post on Nov 19, Zuckerberg said that Facebook is taking misinformation “seriously” but did not fail to add that the “percentage of misinformation is relatively small.” He outlined the number of initiatives to curb fake news distribution and said that Facebook has “been working on this problem for a long time and we take this responsibility seriously. We've made significant progress, but there is more work to be done.” However, Facebook has refrained from providing details on the projects undertaken to fight the menace citing the “importance” of the issue.
Per the blog post, the initiatives taken up by Facebook to curb fake news on its platform include improvement of technical systems to develop a more efficient detection of false stories. It is also working to facilitate its 1.79 billion users to report stories that are fake. This apart, the social network is availing the help of third party for better verification of news and is looking at the option of “labeling stories” that are "flagged" counterfeit by them. Furthermore, the company declared that it is “raising the bar for stories that appear in related articles under links in News Feed.” Facebook said it will also scrutinize ads that promote bogus stories for monetary gains. Lastly, it said that it will work with the entire news industry to improve its fact checking systems.
Earlier this year, Facebook faced troubles from conservatives for its alleged role in suppressing conservative news. A Gizmodo report, quoting an unnamed ex-Facebook contractor, alleged that Facebook intentionally concealed conservative news. The report caused massive uproar and prompted Senator John Thune to write a letter to Zuckerberg demanding an explanation.
Facebook posted a full account of how “Trending Topics” selection works on its website. Zuckerberg also met fifteen key conservative leaders to assure them that Facebook is not prejudiced. However, the social network did not deny the likelihood of human error. As a result, the social media service has outlinednew measures to minimize such instances.
Facebook made the “Trending” feature more automated to minimize human intervention. The company has done away with the need to write description for trending topics that required news curators to do the job. Instead, the trending topics now just have a hashtag and display the number of people talking about it.
The company also addressed the issue of clickbait earlier this year. The company implemented a system to update the news feed in such a way that it can identify commonly used phrases in clickbait headlines to reduce distribution of spam posts that generally lure users to click but have nothing interesting to offer.
Currently, Facebook is a Zacks Rank #2 (Buy) stock. Other well-ranked stocks in the broader tech space are Jabil Circuit In. (JBL - Free Report) and Sabre Corp. (SABR - Free Report) . Both stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Both the companies have reported positive earnings surprises in the trailing four quarters which stand at 41.58% and 9.67%, respectively.
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