🔎 Google’s search snafu

Friday, February 18, 2022 by Snacks
When every search result is sponsored [sturti/E+ via Getty Images]

When every search result is sponsored [sturti/E+ via Getty Images]

[NurPhoto / Getty Images]

[NurPhoto / Getty Images]

Yesterday’s Market Moves
Dow Jones
34,312 (-1.78%)
S&P 500
4,380 (-2.12%)
Nasdaq
13,717 (-2.88%)
Bitcoin
$40,735 (-7.39%)

Hey Snackers,

Buckle up, folks: Uber now lets you see how many one-star reviews you’ve racked up from drivers. Maybe don’t ride with that seafood-soup takeout…

Stocks fell sharply yesterday as US Secretary of State Antony Blinken warned the UN of a “moment of peril” in Ukraine after reports of shelling on the Russia-Ukraine border. The Dow had its biggest one-day drop of the year.

Results

1. Is Google search getting worse? A viral post points to cracks in Alphabet’s search supremacy

About 2,640,000,000 results… But they’re all sponsored. This week, search-engine blogger DKB wrote a viral post claiming “Google Search Is Dying.” The argument: Google search results aren’t as relevant as they used to be because they’re cluttered with ads and SEO-optimized clickbait. But Google still dominates the search biz with 86% market share.

  • Google has been the world’s largest search engine since 2000, two years after it was founded. And search is still its cash cow: ad revenues more than doubled in the past four years, boosting parent Alphabet to record sales last quarter.
  • But some users are ditching Google for more “authentic” results. Consider a search for “best vacuum”: Google gives you a half-dozen ads and 700-word blog posts, while Reddit offers unvarnished reviews from recent buyers on r/VacuumCleaners.

Buried in the results… The search biz that made Alphabet huge could become a liability if users can’t easily find what they’re looking for, or don’t trust the results. And as Alphabet spent (and lost) billions on Google Cloud and Waymo over the past few years, its core search biz has run into obstacles:

  • Growing competition from Microsoft’s Bing, China’s Baidu, and privacy-focused DuckDuckGo has cut into Google’s search market share by 5% since 2018.
  • Global regulators have also launched several antitrust lawsuits against Google, accusing it of favoring its products in shopping results.
THE TAKEAWAY

The search industry may be splintering… And Alphabet’s mountain of lawsuits could cut into its huge ad sales and give competitors a chance to take a slice of Google’s search share. There’s a reason people use “Google” as a verb. But as the internet becomes more decentralized, thanks to the rise of blockchain-backed communities, users could gravitate to new search options that reduce ad clutter and give more helpful results.

Scraper

2. As Americans start to shop in actual stores more, suburban malls are making a comeback — but big-city storefronts are lagging

Parking by the food court just got tougher… Malls were hit hard during the pandemic as shoppers ditched fitting rooms for sweatpants. Lockdown measures forced a record 12K+ US stores to close in 2020, as mall icons like J. Crew, Neiman Marcus, and Brooks Brothers filed for bankruptcy. Now Simon Property Group, the country’s largest mall owner, is calling the comeback:

  • IRL again: SPG's sales topped pre-pandemic levels for the first time last summer as pent-up consumer demand and extra savings revived IRL shopping.
  • Burbs: Last year, Scottsdale's Fashion Square, one of Arizona’s biggest malls, saw a 16% jump in foot traffic from 2019, while Houston’s popular Galleria saw a 7% spike.
  • Commercial real-estate broker CBRE said the US retail market could see a decade-high number of new leases this year.

Tale of two retails… While malls have been benefiting from the return to normal, urban retailers are still struggling. Shares of Vornado Realty, which owns property in metro areas like New York, Chicago, and San Francisco, are down 33% over the past two years. A couple reasons:

  • Tourist turbulence: The pandemic wiped $60B in tourism $$$ from NYC’s economy. While international visitors — and their wallets — are trickling back, the city expects that traffic to reach a fifth of pre-pandemic levels this year.
  • Digi happy hours: Now that just 3% of office workers say they want to return in person full time, retailers that used to thrive on those visits are worried. (NYC’s new mayor is all but begging CEOs to bring their employees back.)
THE TAKEAWAY

There’s a long road ahead… Brick-and-mortar retail — urban and suburban — still faces an existential threat from our shift to online shopping. Case in point: there’s 90M square feet, or 16 Mall of Americas, worth of empty US storefronts. Vornado's CEO says that even though urban commercial rents may have bottomed, they’re unlikely to ever return to the "unbelievable highs" of the Before Times. Now cities like Denver are offering businesses rent-free space and up to $20K in sweeteners to open shop downtown.

What else we’re Snackin’

  • Marty: Walmart unbagged expectation-beating sales as Americans stocked up on groceries and gifts during the holidays. The consumer bellwether notched a $3.6B profit despite rising costs and supply snags.
  • Shh: Palantir is the secretive software company that collects data for big clients (think: intelligence agencies). Not so secret: Palantir shares plunged 15% yesterday on a widening loss and low-key forecast.
  • Flate: Prices are surging in Argentina (inflation = 50%). As Argentinian currency loses value, crypto credit cards are coming in. Crypto exchange Lemon Cash plans to issue 3M bitcoin rewards cards this year.
  • Vroom: Elon won’t be thrilled: Ford’s Mustang Mach-E overtook Tesla’s Model 3 as Consumer Reports’ top EV for 2022. Old-school carmakers like GM and Ford are creating buzz with snazzy new electric whips.
  • Buttery: As people watch more flicks from the couch, AMC is ramping up its biz of selling popcorn outside theaters. Think: kiosks at malls, AMC-branded microwave ’corn, and even delivery partnerships.

Snack Fact of the Day

Kabob, goober, and crawdad are words most Americans know but many Brits don’t. Yet Brits know gazump, tippex, and quango, which Americans do not.

Friday

  • Earnings expected from: Deere & Company and DraftKings

Authors of this Snacks own: Bitcoin and shares of Google, Ford, Walmart, Uber, Tesla, Microsoft and GM

ID: 2045973

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