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Happy Friday! Hate to start your weekend off with some bad news, but here goes: Costco is raising the price of its membership.
In today's big story, Google risks facing a massive lawsuit over its Search business. But it might have a backup plan.
What's on deck:
- Markets: From the New York Knicks to the Army Rangers to Blackstone, Marshall Plumlee's career has had plenty of twists and turns.
- Tech: Amazon's AI chatbot is having some issues, leaked messages reveal.
- Business: Jessica Fern's 'Polysecure' promised a world beyond monogamy. She didn't say it would be easy.
But first, try searching "how to avoid a massive lawsuit."
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The big story
Searching for a solution
Google's no longer feeling lucky.
The search giant is already facing a federal judge's ruling that it violated antitrust laws. The Justice Department and Google are scheduled to appear in court today to discuss the next steps for resolving the company's monopoly.
Some of the proposed resolutions are extreme — like breaking it up — but it's not Google's only problem.
The ruling opens up Google to lawsuits alleging that it artificially raised ad prices for years, writes Business Insider's Hugh Langley. Yelp has already filed one about search referencing, and advertisers could be next.
Ultimately, Google could face a lawsuit seeking more than $100 billion in damages, according to one analyst.
The rationale for the suit goes as follows. A judge ruled that Google suppressed competition in the search market. That meant Google was the only game in town, enabling it to raise its ad prices knowing customers had no other option but to pay up.
But a 12-figure suit isn't just terrifying for Google. Apple, Meta, and Amazon are also dealing with antitrust suits. The judge's ruling was bad enough for Google's Big Tech peers. A hefty lawsuit could foreshadow even more trouble.
It's not all bad news for Google.
While its search business might be in trouble, another part of the company is red hot.
Subscriptions are becoming a key way Google makes money, writes Hugh. The group, described as "subscriptions, platforms, and devices," has had better revenue growth than Search the past three quarters.
YouTube, which has become a top streamer and the go-to spot for content creators, is a big part of that segment. But it also includes its storage services and, potentially, AI.
A premium version of Google's chatbot, Gemini, is being rolled out for $19.99 a month. But AI tools haven't necessarily been the revenue boon tech giants had been hoping for thus far, so don't hold your breath.
Still, Google is willing to take the risk. Even with Search's regulatory issues, advertising remains a volatile business. Investors view subscriptions as a better, stable bet.
News brief
Top headlines
- 4 victims on Mike Lynch's yacht were trapped inside air bubbles before suffocating, report suggests.
- SpaceX tells employees not to travel to Brazil, as Elon Musk's fight with its Supreme Court over X intensifies.
- Tesla stock rises as carmaker unveils full self-driving plans for China and Europe ahead of next month's Robotaxi reveal.
- How AuditBoard went from a potential IPO to a $3 billion takeover by private-equity firm Hg in just two months.
- Mark Cuban offers to serve in the Harris White House.
3 things in markets
- The guy who called the last financial crisis isn't sold on it happening this time around. 'Big Short' investor Steve Eisman told BI he refuses to peddle negativity about a financial system he's not overly worried about. "I'm not going out of my way to predict the end of the world when I don't see the end of the world," he said.
- JPMorgan's surprising tool in its bid to attract wealthy customers. Bank branches might not be sexy, but they are a key part of JPMorgan Wealth Management CEO Kristin Lemkau's strategy. She told BI how they fit into her plan, and who she's hiring to staff them.
- Just your normal NBA-Army Ranger-Blackstone career path. Marshall Plumlee's road to Wall Street has been unique, to say the least. The former New York Knick described transitioning from pro sports to the military before joining Blackstone's tactical opportunities group.
3 things in tech
- Leaked messages show early challenges for Amazon's AI chatbot Q. In internal Slack discussions, Amazon employees voiced concerns about high costs and lack of features for the nascent chatbot. As a result, some employees are worried the company could lose customers to Microsoft Copilot.
- Can we keep TikTok, actually? Americans don't want to ban TikTok anymore. According to a Pew Research survey, support for a TikTok ban among US adults is declining, down to a third of Americans from half of all US adults in March 2023. The clock is still ticking on the impending sale-or-ban ruling by early next year the app is facing.
- Silicon Valley's split over "Founder Mode." An essay by Y Combinator cofounder Paul Graham about the best way to run a company has the tech scene forming factions. It weighs a hands-off approach against a hands-on approach of leadership. Here's where SV's leaders stand.
3 things in business
- Meet the woman behind the polyamory movement. Jessica Fern's 2020 sleeper hit "Polysecure" has become the new polyamory bible — and a status symbol for the sexually enlightened. How she turned her failed open marriage into a literary phenomenon.
- Elon Musk is a Trump win away from serious federal power. In a speech at the Economic Club of New York, Trump outlined a plan proposed by Elon Musk to create a new government commission to cut government spending and regulation. Musk previously said he "can't wait" to work in Trump's White House should he win in November.
- Frequent flyer fleecing? The feds want to make sure you're getting the most out of those airline rewards programs. The Department of Transportation is probing the four largest US airlines — Southwest, United, American, and Delta — to make sure customers are "getting the value that was promised to them," Secretary Pete Buttigieg said.
In other news
- JD Vance's plan to lower childcare costs: have grandma and grandpa 'help a little bit more.'
- Telegram's CEO broke his silence after his arrest, saying it's not true that the platform is an 'anarchic paradise.'
- Trump will mimic Harvey Weinstein's successful appeal to fight his own sexual assault verdict Friday. It won't be as easy.
- There's a hiring frenzy for big ad sales roles in traditional media — but that doesn't mean the industry is thriving.
- What Nvidia leadership should be doing to prepare for a possible DOJ case.
What's happening today
- Defense Secretary Lloyd Austin hosts Ukraine Defense Contract Group meeting in Germany.
- Bureau of Labor Statistics releases August employment report.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jack Sommers, deputy editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.