The daily business briefing: January 25, 2023
DOJ tries to break up Google's dominant digital advertising unit, Walmart raises its minimum wage but still lags behind rivals, and more
U.S., states sue Google over its ad-market dominance
The Justice Department and eight states, including New York, California, and Virginia, filed a lawsuit against Alphabet's Google on Tuesday, accusing the internet search giant of illegally monopolizing the digital advertising market. The suit seeks to break up Google's ad unit, Bloomberg reported. "The harm is clear: Website creators earn less, and advertisers pay more, than they would in a market where unfettered competitive pressure could discipline prices and lead to more innovative ad tech tools," the Justice Department said in a complaint filed in a Virginia federal court. Google said the suit "attempts to pick winners and losers in the highly competitive advertising technology sector," and "largely duplicates an unfounded" Texas lawsuit that was recently dismissed.
Walmart raises its minimum wage but still trails rivals
Walmart announced Tuesday it was hiking its minimum wage by $2 an hour to a range of $14 to $19 an hour, depending on the location. The raise will lift the retail giant's average wage to $17.50 an hour from $17 starting with March 2 paychecks, Walmart said. The change affects about 340,000 workers at roughly 3,000 stores. Walmart still will lag slightly behind other rivals like Amazon, Costco, and Target, which have offered minimum wages of $15 per hour or more since 2021. Walmart has a total of 1.6 million U.S. workers. The change comes as wage growth slows down nationwide.
Thrive Capital to sell minority stake to high-profile investors
Venture firm Thrive Capital said Tuesday that it is selling a 3.3 percent stake to a group of investors that includes Walt Disney Co. CEO Robert Iger and KKR & Co. co-founder Henry Kravis, according to The Wall Street Journal. The $175 million investment values Thrive at $5.3 billion. The deal is intended to expand Thrive's "investing reach and give the founders of the startups it backs access to some of the world's most powerful business figures," the Journal reported. "A lot of these folks have been involved in my life for quite a bit of time," said Thrive founder Josh Kushner, a former Goldman Sachs banker and son of real estate developer Charles Kushner. "Now they actually have a vested stake in the firm's success."
Stock futures fall after Microsoft's lackluster guidance
Stock futures dropped early Wednesday after the latest corporate earnings reports. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.5 percent and 0.7 percent at 6:30 a.m. ET. Nasdaq futures were down 1.2 percent. Microsoft shares fell about 2 percent. The software giant's shares briefly rose after it reported quarterly earnings that beat analysts' expectations, driven by strength in cloud computing, then dropped after it gave disappointing guidance for the March quarter in its earnings call. About 65 percent of the more than 70 S&P 500 companies that have reported fourth-quarter earnings so far have posted better-than-expected results despite fear of a possible recession, according to CNBC.
Senators hold hearing on Ticketmaster 'monopoly' after Swift fiasco
The Senate Judiciary Committee on Tuesday grilled Live Nation, which owns Ticketmaster, over alleged anti-competitive practices in the ticketing industry. Lawmakers called the hearing after a Ticketmaster sales fiasco that left many Taylor Swift fans unable to buy seats at concerts in her Eras tour. Joe Berchtold, president of Live Nation, blamed a bot attack for overwhelming demand that triggered the "terrible consumer experience." He added: "We need to do better and we will." Several senators said the Swift tour problems, and Swift's vocal fans, helped call attention to a broader problem. Sen. Amy Klobuchar (D-Minn.) said Ticketmaster, which controls 70 percent of ticket sales in the U.S., is a "monopoly" that has too much control over the live music market, inflating prices and fees.