📵 Google’s monopoly L

Do not pass go… On Monday, a US federal judge ruled that Google broke the law to become a search monopoly. It’s the first anti-monopoly ruling against a Big Tech company in decades, and it’s a major loss for Google. Judge Amit Mehta didn’t mince his words, saying: “Google is a monopolist, and it has acted as one to maintain its monopoly.” The decision came as a result of a US Justice Department lawsuit filed against Google in 2020. Google plans to appeal.

• Monopolies are illegal in the US under the Sherman Act, and the court found that Google made illegal anticompetitive moves to sustain its search dominance.

• Just Google it: The company controls roughly 90% of the digital search market and has a 95% share of the market on smartphones.

The result could be a huge blow… to Google parent Alphabet. The worst-case scenario would be a forced divestiture of its search biz, which last quarter accounted for nearly 60% of its total revenue (search raked in nearly $43B). But one antitrust expert told Sherwood it’s unlikely that Alphabet will have to break up with search. What’s more likely: Google will be ordered to stop paying to be the default search engine on browsers.

• Google has exclusive agreements with Apple and Android manufacturers like Samsung to be the default search on their default browsers.

• Billions on the line: Court documents showed that in 2022 Google paid Apple $20B to be the default in Safari. In 2021, Google paid companies over $26B to be the default.

• In 2020, Google estimated it could lose up to 80% of its iPhone and iPad search volume if it gave up its Apple default, which could result in ~$33B in lost revenue.

Five-star quarter… Uber shares surged 11% after the ride-hailing and delivery co rolled up with a $1B quarterly profit. Investors cheered the return to profitability (in the previous Q, investing losses and legal woes weighed down Uber’s otherwise lucrative biz). App transactions grew nearly 20% on the year last quarter, while revenue rose 16%, topping expectations. Uber expects transactions to rake in more than $40B this quarter, and forecast that its fledgling advertising business (picture: ads in the app) will top $1B.

• U-turn: Last year, Uber reported its first annual profit since going public in 2019. It has been tightening its seat belt, in part by trimming its staff and ditching self-driving plans.

Goodbye “Summer20” promo codes… Until recently, gig companies like Uber were spending big on marketing and discounts to win market share. But the era of the “millennial lifestyle subsidy” is over, and gig companies have started to raise prices and reduce freebies. In its pivot to profitability, Uber has hiked prices on rides and delivery (both businesses saw double-digit bookings growth last quarter). Ride-focused Lyft, which saw Q1 revenue jump nearly 30% on the year, reports today.

• Taco-flation: DoorDash, which has only reported a profit once, said last week that its Q2 revenue jumped as orders spiked 19% on the year. The food-delivery leader has raised its fees in some cities.

• Grocery-ease: Yesterday Instacart’s reported revenue blew past expectations as the biz doubled down on efforts to boost non-delivery revenue from advertising.