🍞 Google’s bread threat

Google’s bread-and-butter ad biz… could be toast. This week the Department of Justice filed an antitrust suit targeting Google’s golden goose: advertising. The goal is to break up its digital ad biz, which makes up 80% of the search leader’s sales. The suit alleges that Google abuses its role as one of the largest buyers, sellers, and brokers of digital ads and hurts competition.

• Big yikes… for Google. The suit calls for the divestiture of Google’s ad exchange and the unwinding of “anticompetitive” ad-quisitions like DoubleClick.
• Google says the suit “attempts to pick winners and losers in the highly competitive advertising technology sector,” arguing it would raise ad fees and hamper growth.
• Searching for a friend… Eight states, including California and New York, joined the DOJ’s suit. The court battle could have serious consequences for the ad industry.

Google can buy itself flowers… but it’ll need to buy lots of lawyers, too, to deal with regulatory break-up tensions. This suit isn’t the only legal drama Google’s dealing with: in 2020 the DOJ filed a suit targeting its search dominance (think: how it’s the default in Safari). That case is expected to go to trial in September. Google’s facing three additional antitrust suits from state AGs. Oh, and in September the EU fined Google $4B after ruling it had broken competition rules — the EU’s second win in a trio of cases.

Glancing at the news... the job market looks rough — especially for tech workers. More than 57K layoffs were announced in the tech sector this month alone: IBM said yesterday it would cut nearly 4K jobs, Microsoft axed 10K, Salesforce said goodbye to 8K, and Amazon laid off 18K. Before that, Meta and Snap had let go of a combined 12K+ employees.

Dominating your LinkedIn feed… While tech layoffs turn heads, they pale in comparison to the jobs added during the industry-wide pandemic hiring spree. Google, which just laid off 12K employees, had added 37K jobs over the past year alone. California, where many tech cos are headquartered, gained 16.2K nonfarm payroll jobs in December, and the unemployment rate in the greater San Francisco area sat at just 2% last month. Meanwhile, Chicago is working hard to recruit laid-off foreign tech workers.

• Let go to level up: Last year, 80% of laid-off tech workers found a new gig within three months. And over half of those rehired got pay increases.
• Musical chairs: Three-fourths of let-go tech workers found new jobs in the same industry.

• Muskular: Tesla unloaded record quarterly sales and said it drove home $3.7B in profit (another record). Still, Elon’s baby said it’s ramping cost cuts as it faces growing competition and economic uncertainty.
• Pod: Juul, the struggling e-cig company (in)famous for popularizing fruit-flavored vapes that look like USBs, is reported to be in talks with three tobacco behemoths. It could be exploring a sale or other deal.
• Arms: Lockheed Martin and Raytheon, the US’s largest defense contractors, secured record weapons orders as Russia’s war on Ukraine drags on. But supply challenges are making it a struggle to deliver.
• Swifties: Live Nation was in the Senate hot seat yesterday as lawmakers grilled execs over Ticketmaster's botched sale of T. Swift concert tickets last year. At issue: Ticketmaster's perceived industry dominance.
• NYSlip: A New York Stock Exchange "manual error” on Tuesday saw some stocks begin trading at inaccurate prices, which the NYSE said would be declared void. Trading losses are expected to be in the eight-figure range.

• US GDP numbers released for Q4
• Earnings expected from: Visa, Valero, Mastercard, Comcast, Intel, SAP, Northrop Grumman, Southwest Airlines, and American Airlines

Authors of this Snacks own shares: of Apple, Amazon, Google, Microsoft, Snap, Tesla, and Walmart

ID: 2702198