Google’s parent company Alphabet Inc. sees its worst day on the stock market as YouTube “increases focus on responsibility & safety”

Why Alphabet Inc. Stock Price Decline Is a Warning to Silicon Valley’s Conscience

But what really caused this dip?

Callum Kearney
May 1 · 6 min read

As Silicon Valley begins to wake up to its collective responsibility in protecting people from harmful or misleading content, what impact will this have on the stock prices and ultimately profitability of these organisations?

Google’s parent company Alphabet Inc. sees its worst day on the stock market as YouTube “increases focus on responsibility & safety”

Alphabet Inc. announced that revenue grew at a rate lower than 20% — sales grew 16.7%, 18.6%, a level Alphabet has managed to hold over the past three years. This slow down in growth is largely due to disappointing sales growth.

But according to JP Morgan analysts, led by Doug Anmuth, Alphabet’s slow down in revenue in the 1st Quarter is in part due to an algorithm update that occurred in January of this year that targeted the removal of harmful or misleading content.

Why would a “responsibility & safety” algorithm update cause a drop?

The analyst wrote:

“YouTube has increased its focus on responsibility & safety, & it adjusted its algorithm in 1Q to reduce recommendations of content that comes close to violating guidelines or is misinformed or harmful

We believe the algo changes build on YT’s [YouTube]efforts in 4Q18 when it removed 2.4M channels & 8.8M videos for violating YT Community Guidelines.”

The key here is, 8.8m videos.

Removing 8.8m potentially harmful videos is good news, then, right?

Removing 8.8m videos, means not only removing the videos, but removing the views that those videos would have otherwise accrued, resulting in a loss in advertising impressions being sold against those views.

It means, safer browsing for users, specifically vulnerable groups such as children.

But then why is Alphabet Inc. losing money, instead of being rewarded for this work?

This could be down to its over-reliance on “dark dollars” [dollars earned directly or indirectly due to immoral practices], could have led to false valuation of Google’s products.

Google’s products are very complex, and are largely governed by algorithms that deploy machine learning.

Unfortunately, these algorithms are not always able to detect misleading content as accurately, analytically, or as emotionally as a human editor could.

This means that there are obviously going to be corners of YouTube’s product where misleading or harmful content begins to propagate, and without detection, pre-roll and in-video adverts still be sold against this content.

But surely YouTube rewards quality videos and can detect harmful videos?

There are fears that the removal of the 8.8m videos allegedly detected by YouTube during their spring cleaning is just the tip of the iceberg.

There is a whole industry, known as Search Engine Optimisation (SEO), where people try to understand, and then manipulate the algorithm to have their content show up ahead of rivals.

Here’s an example story about how to gain the YouTube algorithm, from the popular industry publication Search Engine Journal, published in March 2019.

Could SEO be amplifying some of these problems?

Whilst there are fantastic SEOs out there doing credible and warranted work, like helping quality information proliferate on Google & YouTube, there are inevitably going to be some folks who are out to gain the system for immoral, unethical, and more often than not, uneducated reasons.

Let’s say for example that you are a prolific publisher of extremely false nutrition-advice videos, for example, and you fear that your content is being suppressed by Google, YouTube, or Facebook, you may be likely seek out a Search Engine specialist to help you increase your views.

So, what can we do about it?

Protests to save our internet against article 17 (formerly known as article 13)

For investors:

  1. Removal of dark dollars should instil confidence: First, investors need to understand that Silicon Valley’s elite tech companies, due to their astronomically quick rise to global domination are inevitably going to have some “dark dollars” in their books. The removal of these dark dollars should be treated as successes, despite their impact on short-term revenue.
  2. Invest in the future of emotional and mental health in society: The rise in impact investing is promising, and we can adapt the same philosophies when investing in the stock market. I’m going to lose the investors at this point, but invest in companies that are renowned for doing good in the world, and refrain from putting money into those who are inevitably eroding our mental and emotional health. The stock market is a wonderful tool, that we can all help reshape to promote ethical business models and products.
  3. Challenge advertising-based revenue models: Companies that are heavily reliant on advertising models are more at risk of letting their threshold for quality dip, in order to keep the ad views / impressions up. Turn to sources such as Digiday’s confessions section to see what’s really going on under the hood of the companies that you’re investing in.

For the platforms:

  1. Promotion and support for quality content: More needs to be done to promote quality, factual, and informative content. Speaking with friends who are full-time and part-time YouTube stars, they receive little in the way of rewards or incentives for uploading content to YouTube. YouTube should be incentivising more content creators, perhaps through paid-for micro-subscriptions to a channel, donations to content creators, or even a revenue split for the ads sold against their content.
  2. Build a home for misplaced journalists: the traditional media industry has been rife of newsroom redundancies for years now, meaning that there are talented content creators (aka journalists) who should be incentivised to replenish YouTube’s platforms with informative commentary, analysis, and news. Invest in building a home for the highly credible amongst these individuals.
  3. Build a home for misplaced journalists: the traditional media industry has been rife of newsroom redundancies for years now, meaning that there are talented content creators (aka journalists) who should be incentivised to replenish YouTube’s platforms with informative commentary, analysis, and news. Invest in building a home for the highly credible amongst these individuals.

For all of us:

  1. Take time out to read community guidelines: Yes, this is homework for us all. Spend an hour of your day today actually reading YouTube’s community guidelines, and any other platform that you frequently use. Especially important if you use this product every day, and crucial if you have children using it.
  2. Report negative content to speed up detection and removal: Still surprisingly few people report videos that are either false, misleading, or harmful. Even if a video or piece of content may not be impacting you, it may impact and influence someone more emotionally vulnerable than you. Take the time to report content that violates the community guidelines.
  3. Support quality content: Support the proliferation and spreading of factual content by either sharing it with friends (direct sharing works best usually, as opposed to just posting on social media). And reach out to content creators to see how they’re being funded, and whether or not there’s any other way to support them by offering to donating money, buying a product, or paying for a subscription to the content creator’s content.

Callum is the co-founder of Tidy Minds, an emotional intelligence consultancy that is working with technology, media, and gaming companies to reframe their business models and experiences that replenish society and our emotional minds.

Tidy Minds

Designing a more a̶r̶t̶i̶f̶i̶c̶i̶a̶l̶l̶y̶ emotionally intelligent future

Callum Kearney

Written by

Founder @ Tidy Minds: https://www.tidyminds.org/

Tidy Minds

Designing a more a̶r̶t̶i̶f̶i̶c̶i̶a̶l̶l̶y̶ emotionally intelligent future

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