Alphabet’s GOOGL division Google continues to take initiatives to enhance search results by curtailing bad ads in a bid to strengthen its search platform.
This is evident from its latest decision of changing its policy to prohibit advertising for unauthorized tracking technology such as spyware and others that aim to gather information about a person or organization without their knowledge.
Notably, advertisements for such technology and software are already in violation of the company’s Enabling Dishonest Behavior policy.
The new policy will impose further restrictions on advertisements for GPS trackers, cameras and recorders that target spying and tracking someone without any consent.
We believe Google is likely to gain further traction in the advertisement industry on the heels of its new policy focused on fighting privacy issues, which is going to be officially released on Aug 11.
Further, the latest move remains crucial for the search giant, which often grapples with data privacy issues.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Advertisement: A Key Catalyst
Notably, advertisement revenues contribute significantly to the company’s top line. In 2019, Google advertising revenues amounted to $134.8 billion, accounting for 83.3% of total revenues.
Moreover, advertisement business is the key catalyst behind Google segment, which generates most revenues for Alphabet. Further, the company has been gaining investor confidence courtesy of its well-performing Google segment.
Hence, we note that the latest move is likely to drive the company’s advertisement business in the days ahead.
Apart from the latest move, the company has recently eliminated advertisements, which were misleading users searching for voting related information. Some of them were even tracking personal data of users, which was a cause of concern.
We believe both the endeavors are expected to drive momentum of Google’s search engine among users. Moreover, these efforts are expected to bolster the trustworthiness of the search platform.
Notably, Google’s growing efforts to address challenges related to misleading information and data privacy are likely to strengthen its competitive position against its major competitor Facebook FB, which is also putting strong efforts to combat fake information.
Further, growing advertisement business of Google is likely to give a tough competition to Twitter TWTR, Snap and Amazon AMZN that are leaving no stone unturned to expand presence in the advertisement world.
Moreover, Google’s continued efforts toward strengthening its advertisement policy structure are likely to aid it in sustaining its dominant position in the advertisement industry.
Currently, Google’s parent Alphabet carries 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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