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Google Eyes Algorithm Enhancement, Flags "Offensive" Content

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Alphabet Inc.’s (GOOGL - Free Report) Google is reportedly taking steps to spot potentially upsetting or offensive content and reduce their appearance on the search results page. This will result in more accurate, realistic and truthful information for users.

Guidelines Updated With a New Section

Google uses around 10,000 contractors across the world as quality raters of its search results. The company has added the option of flagging “Upsetting-Offensive” content in its guidelines to these quality raters.

They now can now flag content that promotes harmful activities such as discrimination or violence against any group of people, animal cruelty, child abuse, racial slurs or human trafficking. Basically any hurtful or displeasing content may be flagged depending upon the motive of a search.

The Broader Plan of Algorithm Enhancement

Data from quality raters will be used to train human coders (search algorithm writers) as well as update machine learning system on how to differentiate upsetting and offensive content from factual and appropriate ones.

The broader aim is to make search algorithms capable of automatically flagging such content. This can happen if the algorithms better understand the motive of a particular search and display results accordingly.

However, that doesn’t necessarily mean that that an offensive or upsetting content will not appear on the search results page. Rather, the enhanced search algorithm will display results if it finds an explicit search being made for such content.

We believe that Google’s near-monopoly position in the search market is likely to drive Alphabet’s stock price going ahead. Its shares have appreciated 15.2% in the last one year compared with the Zacks Internet-Services industry’sgain of 11.6%.

Our Take

We believe that updates of this kind will improve Google’s search quality and furnish quality results. The Google search engine is advanced, simple and adaptable, all at once and this is the main reason for its leading search market share.

Alphabet Inc. PE Ratio (TTM)

A Feb 2017 global desktop search market share report from says that Google has 80.5% of market share, followed by Bing’s 6.9%, Baidu’s (BIDU - Free Report) 5.9% and Yahoo’s 5.4%. In mobile and tablet, Google is even more dominant with a 95.9% share of the search market globally, compared to Yahoo’s 1.9% and Bing’s 0.86%.

Alphabet has more or less held its own despite concerted efforts to take share by competitors like Microsoft (MSFT - Free Report) and Yahoo. Google is the dominant search engine in Canada, Latin America and most Asia/Pacific countries. It is also the dominant search engine in Europe, with leading market share in the U.K., France, Germany and Spain. Alphabet’s push into wearables and Google Now are positives for search revenue growth.

Currently Alphabet has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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