The awaited hearing of Sundar Pichai, CEO of Alphabet’s GOOGL Google, in front of the House Judiciary Committee at Capitol Hill finally took place on Tuesday on sensitive and crucial topics.
Pichai faced questions and strong claims against Google’s search results and data security measures from the lawmakers.
The Republicans are of the view that there is a significant political biasness on Google’s search platform, and hence questions were raised against its search algorithms.
This was also strongly supported by the President Trump’s previous allegations that the company suppresses the voice of Conservatives, and displays algorithmic biasness against Trump-related news.
Further, the company was accused of the data privacy issues. The lawmakers were of the view that the users of Android, Google apps and products are not aware of how much of their data is collected by Google, which is unethical.
Additionally, there were questions regarding the company’s plans for its search engine in China.
Pichai’s Stand at the Hearing
Pichai, drawing upon the company’s policies and principles, which are strictly against any political biasness, testified that Google’s search platform is not biased against the Republicans.
Moreover, he said that the company never forgot its “American roots” while expanding into the international markets.
In reply to the queries related to Chinese search engine, the CEO revealed that the company is not planning to go forward with it right now given the concerns raised by lawmakers and Google employees.
Now in terms of data privacy, the company undoubtedly collects huge amount of user data. However, Pichai stressed on the company’s strong efforts toward data privacy. He said that the company offers choice and control to its users.
Notably, the company plans to shut its social media service, Google+ in April, four months ahead of schedule. The reason behind the decision is the second significant security breach faced by it this year.
Alphabet Inc. Price and Consensus
Alphabet Inc. Price and Consensus | Alphabet Inc. Quote
All these allegations do not bode well for Google stock.
However, the company’s strong initiatives toward enhancing its search results and ensuring high security of data to the users of its apps and products should not be ignored.
Google already has a Data and Personalization dashboard for the users to track the information that is being shared. This proves the company’s dedication toward keeping its user data safe and secure.
Further, the company’s growing investments on its search platform to deliver better results remain a tailwind. Reportedly, Google underwent 200K experiments last year and brought in 2,500 changes in its search engine.
Recently, it rolled out a new search engine called Dataset Search along with a number of useful search updates to innovate its search platform.
Per StatCounter, Google holds 90% share in the global search market, thus becoming the dominant player.
These strong endeavors are likely to continue aiding the stock’s performance.
Notably, shares of Alphabet have returned 12% on a year-to-date basis against the industry’s decline of 9.4%.
Zacks Rank & Stocks to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
Few better-ranked stocks in the broader technology sector are Akamai Technologies AKAM, Etsy ETSY and Marchex MCHX. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term EPS growth for Akamai Technologies, Etsy and Marchex is currently pegged at 14.67%, 15% and 15%, respectively.
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