IBM Shares Higher as Watson Wins


Shares of International Business Machines Corp. (NYSE:IBM) are up only slightly as news of the company’s super computer, Watson, ousted two Jeopardy champions in head-to-head competition.  Yes, the day has come when a computer  can compete in an all-encompassing trivia game, edging out all competitors.

IBM shares are trading at $163.95, up 0.34% on volume of 0.92M shares.  Over the past 12 months International Business Machines Corp (IBM) shares have traded between a 52-week low of $116.00 and its 52-week high of $166.25.  International Business Machines Corp shares are now trading with a P/E Ratio of 14.1 and EPS of 11.58.
Bloomberg reports:  Machine bested man yesterday, as International Business Machines Corp.’s computer beat two former “Jeopardy!” champions at the TV quiz show.

“Watson,” IBM’s computer named after its founder Thomas J. Watson, finished the three-day tournament with $77,147. Ken Jennings came in second with $24,000, followed by Brad Rutter with $21,600.

With a $25,000 lead going into the final match, Watson doubled his advantage by answering questions on subjects from “The Simpsons” to Bram Stoker accurately. The win gives IBM a highly publicized victory in artificial intelligence -- and a boost as it moves to market the technology to its corporate customers.

“Machines are evolving with breathtaking speed,” said Paul Saffo, managing director at investment adviser Discern Analytics in San Francisco. “We don’t have artificial intelligence that can go mano a mano with humans on general things, but this technology seems to be headed that way.”

IBM built Watson to tackle a challenge in artificial intelligence: making a machine that could understand natural human language, as opposed to the keyword searches used in the search engines of Google Inc. or Microsoft Corp. IBM wanted the effort to have real-world applications. “Jeopardy,” with its word plays, innuendos and penalties for inaccuracy, proved a good test.

Jennings and Rutter
Watson faced two of the best-known players in the show’s history. Jennings, who won 74 straight games in 2004, holds the record for number of victories, while Rutter had pulled in more money than any player on Jeopardy and beat Jennings in a tournament in 2005.

Going into yesterday’s final game, Watson led with $35,734, with Rutter at $10,400 and Jennings at $4,800. The first game was played over the first two days of the tournament, which was broadcast from IBM’s lab in Yorktown Heights, New York.

Watson, who appears on film as a round avatar on a screen, has a custom-made database created from journals, newspapers and other resources. The computer received questions through typed entries at the same time as host Alex Trebek read them out loud. It scanned the database with algorithms and calculated its degree of confidence in an answer. If its confidence crossed a certain threshold, a mechanical thumb buzzed in and Watson spoke the answer.

Mistakes: Toronto, The New Yorker
The computer made some gaffes. In the first round, it repeated an incorrect answer Jennings had given moments before. In the second day’s Final Jeopardy, the last round of each game that often involves word play, Watson identified Toronto as a U.S. city. Its answer was followed by question marks, indicating how unsure it was of its answer.

In yesterday’s match, Watson missed a Daily Double, which lets contestants wager as much money as they want. The clue asked what work reviewed by The New Yorker in 1959 praised its brevity and clarity. Watson, which had bet more than $2,000, answered Dorothy Parker, missing the correct response: “The Elements of Style.”

The computer was successful on topics from pop culture to literature. When Trebek queried about a Fox show featuring characters named Itchy and Scratchy, Watson responded “The Simpsons,” the correct answer.

The machine also redeemed itself in the second Final Jeopardy, with a clue of William Wilkinson’s “An Account of the Principalities of Wallachia and Moldavia” inspired this author’s most famous novel.

Watson, along with Jennings and Rutter, gave the correct answer: Who is Bram Stoker?

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