Tag: marketing and advertising channels

A New York man was arrested after allegedly threatening a shooting at Tops Friendly Markets in a social media post | CNN

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CNN
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A 20-year-old man from Upstate New York has been charged with making a terroristic threat after threatening to carry out a shooting at the Tops Friendly Markets in Manlius, New York, in a Discord post, according to court documents and local police.

Police responded to a call Saturday from the manager of the Tops in Manlius – a village in Onondaga County – who said that the store got phone calls from two different people expressing their concern over statements made by a Discord user saying he was going to harm shoppers at their supermarket, according to court documents obtained by CNN affiliate WSTM.

The two witnesses who called the supermarket reported that the threatening remarks on Discord – which included a racist reference – came from a 20-year-old man named Zachary who lives in the Manlius area and whose father recently died, according to the documents.

Police investigated the posts and identified the user as Zachary Mullen of Jamesville, according to a statement from the Town of Manlius Police Department.

Law enforcement arrested Mullen on Saturday for making a terroristic threat and, when conducting a search of his home afterward, found guns and ammunition, according to the police statement.

A judge also issued an Extreme Risk Protection Order against Mullen on Sunday, which allowed authorities to seize at least two firearms from his home.

CNN was unable to identify an attorney for Mullen.

“There were some racist overtones to the posts made by Mr. Mullen and as of this moment we’re still trying to connect the dots as to why he picked the Tops in Manlius, but certainly the location of the store, the name of the store, the racist natures of the post, would cause anyone pause, that this may have been far more dastardly than it even looks on the surface,” Onondaga County District Attorney Bill Fitzpatrick told WSTM.

Discord is the same social media site that a convicted mass shooter posted on before killing 10 people at a Tops Friendly Markets in Buffalo.

Law enforcement officials verified that Mullen’s father, who they say was an avid hunter, had died a few days prior to Mullen’s posts on Discord and that he was grieving, according to the affidavit.

Mullen, who lives with his mother, is not currently in jail, according to the county district attorney.

“Unfortunately, he’s out on what’s known as pre-trial release because we live in New York and that’s the nature of Bail reform in New York. Incredibly enough he is out so if he has secret access to a gun, God forbid, that’s something we just don’t know but we’ll certainly be monitoring him as much as we can,” Fitzpatrick said in a statement to WSTM.

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March 14, 2023
Super Bowl ad slams Tesla’s ‘Full Self-Driving’ tech | CNN Business

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New York
CNN
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Electric carmaker Tesla will face a hit on Super Bowl Sunday, when an ad will play showing the alleged dangers of its Full Self-Driving technology.

The commercial, which will be aired in Washington, DC, Austin, Tallahassee, Albany, Atlanta and Sacramento does not paint Tesla in the best light. The ad is part of a multimillion dollar advertising campaign by The Dawn Project. Its founder, Dan O’Dowd, is a California tech CEO who has dedicated millions of his own money (and a failed US Senate race) to the cause.

The ad cost $598,000, a Dawn Project spokesperson told CNN.

It shows a Tesla Model 3, which allegedly has the Full Self-Driving mode turned on, running over a child-sized dummy on a school crosswalk, and then a fake baby in a stroller, in a series of tests by the Dawn Project. In the ad, the car swerves into oncoming traffic, zooms past stopped school buses, and cruises through “do not enter” signs.

“Tesla’s Full Self-Driving is endangering the public,” the ad said. “With deceptive marketing and woefully inept engineering.”

The Dawn Project says it wants to make computer-controlled systems safer for humanity, shooting its own videos as tests of Tesla’s alleged design flaws. In August, O’Dowd published a video showing a Tesla plowing into child-sized mannequins. Some Tesla fans posted their own videos in defense, using their own dummies or even their own children – YouTube has taken down several test videos involving actual children, citing safety risks.

O’Dowd received a cease and desist letter from Tesla over the video, claiming he and the Dawn Project were “disparaging Tesla’s commercial interests and disseminating defamatory information to the public.”

O’Dowd responded to the cease-and-desist with a 1,736-word post in which he pushed back at the suggestion his posts were defamatory, defended his tests and returned barbs from Musk and some Tesla supporters.

O’Dowd, who sold software to the military, is undertaking a campaign of millions of dollars to ban Tesla’s Full Self-Driving feature. He is running national ads and posting online videos displaying the possible dangers of Musk’s technology. He also ran an unsuccessful one-issue campaign for the US Senate on the same message.

Though officially in beta mode, Full Self-Driving is available to any user in North America who wants to purchase the $15,000 feature.

Tesla did not immediately respond to CNN’s request for comment. Tesla’s “Full Self-Driving” system is intended to someday work on city streets, but despite its wide rollout, is still officially in a developmental “beta” program. No car for sale on the market is yet able to drive itself.

Autopilot is a suite of driver-assist features, while Full Self-Driving steers the car on city streets, but could also stop for traffic signals and make turns.

Tesla contends it is not aware of any ongoing government investigation that has concluded any wrongdoing occurred, and said its Autopilot, with its automated steering designed to keep a car within a lane, is safer than normal driving.

“Tesla’s reckless deployment of Full Self-Driving software on public roads is a major threat to public safety. Elon Musk has released software that will run down children in school crosswalks, swerve into oncoming traffic and hit a baby in a stroller to all Tesla owners in North America,” O’Dowd said in a statement.

Tesla said it “has received requests from the Department of Justice for documents related to Tesla’s Autopilot and FSD features” in a January 31 public filing.

Federal investigators are looking into a Musk tweet about disabling driver alerts on Tesla’s “Full Self Driving” driver assist system, joining several other National Highway Traffic Safety Administration probes.

On December 31, Musk replied to a tweet by @WholeMarsBlog which said “users with more than 10,000 miles on FSD Beta should be given the option to turn off the steering wheel nag.”

“Agreed, update coming in Jan,” Musk replied.

The National Highway Traffic Safety Administration announced last summer it was escalating its Tesla probe to an “engineering analysis,” a step toward seeking a recall. NHTSA first investigated Tesla’s driver-assist technology after reports Autopilot-engaged vehicles were crashing into emergency vehicles stopped at the scene of earlier crashes.

O’Dowd is the founder and CEO of Green Hills Software. Some of Musk’s defenders claim O’Dowd has a conflict of interest as one of its customers is Intel-owned Mobileye, which makes a computer chip to run driver-assisted software, the Washington Post reported.

O’Dowd told the Washington Post Mobileye is one of his hundreds of customers and that his main motivation is safety.

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February 12, 2023
I’m a parent with an active social media brand: Here’s what you need to check on your child’s social media right now | CNN

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CNN
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If you follow me on Twitter or Instagram, you’ll know I wear a lot of hats: romance author, parent of funny tweenagers, part-time teacher, amateur homesteader, grumbling celiac and the wife of a seriously outdoorsy guy.

Because I’m an author with a major publisher in today’s competitive market, I’ve been tasked with stepping up my social media brand: participation, creation and all. The more transparent and likable I am online, the better my books sell. Therefore, to social media I go.

It’s rare to find someone with no social media presence these days, but there’s a marked difference between posting a few pictures for family and friends and actively creating social media content as part of your daily life.

With a whopping 95% of teens polled having access to smartphones (and 98% of teens over 15), according to an August Pew Research Center survey on teens, social media and technology, it doesn’t look like social media platforms are going away anytime soon.

Not only are they key social tools, but they also allow teens to feel more a part of things in their communities. Many teens like being online, according to a November Pew Research Center survey on teen life on social media. Eighty percent of the teens surveyed felt more connected to what is happening in their friends’ lives, while 71% felt social media allows them to showcase their creativity.

So, while posting online is work for me, it’s a way of life for the tweens and teens I see creating and publishing content online. As a parent of two middle schoolers, I know how important social media is to them, and I also know what’s out there. I see the good, the bad and the viral, and I’ve have put together some guidelines, based on what I’ve seen, for my fellow parents to watch for.

Here are eight questions to ask yourself as you check out your children’s social media accounts.

If you don’t, it’s time to start. It’s like when I had to look up the term “situationship,” I saw that ignorance is not bliss in this case. Or really any case when it comes to your children. Both of my children have smartphones, but even if your children don’t have smartphones, if they have any sort of device — phone, tablet, school laptop — it’s likely they have some sort of social media account out there. Every app our children wish to add to their smart devices comes through my husband’s and my phone notifications for approval. Before I approve any apps, I’ll read the reviews, run an internet search and text my mom friends for their experience.

If I’m still uncertain about an app, I’ll hold off on approving it until I can sit down with my children and ask them why they want it. Sometimes just waiting and forcing a short discussion is enough to convince them they no longer want it. In our household, I avoid any apps that run social surveys, allow anonymous feedback or require the individual to use location services.

If you don’t have your family phone plan all hooked together with parental controls, I’d advise setting that up ASAP. Because different devices and apps have different ways to monitor and set up parental controls, it’s impossible to link all the options here. However, a quick search will give you exactly the coverage you are comfortable with, including apps that track your child’s text messages and changing the settings on your child’s phone to lock down at a certain time every night.

The top social media platforms teens use today are YouTube (95% of teens polled), TikTok (67%), Instagram (62%) and Snapchat (59%), according to the Pew Research Center survey on teens and social media tech. Other social media platforms teens use less frequently are Twitter, Reddit, WhatsApp and Facebook. Most notably, Facebook is seeing a significant downturn in teen users. This list isn’t exhaustive, however. I would check out your children’s devices for group chat apps (such as Slack or Discord) and also scroll through their sport or activity apps where group chat capabilities exist.

I’ve seen preteens and teens using their real names, birthdate, home address, pets’ names, locker numbers or their school baseball team. Any of that information could be used to identify your child and location in real life or using a quick Google search. All of that is an absolute “no” in our house.

I also tell my kids not to answer the fun surveys and quizzes that invite children to share their unique information and repost it for others to see. These can be useful tools for predators and people trying to steal your children’s identity.

What I do: I made the choice a long ago to withhold the names of my children and partner. It’s not an exact science, and I know some clever digging could find them. For my husband, it’s for the sake of his privacy and also the protection of his professionalism. Just because he’s married to a romance author doesn’t mean he should have to answer for my online antics, whatever they may be. For my children, I want to avoid anything embarrassing that could be traced back to them during their college application season.

Even if your children keep their social media profiles private (more on that later), their biographical information, screen name and avatar or profile picture are public information.

Do an internet search of your child’s name to see what’s out there and scroll through images to make sure there isn’t anything you wouldn’t want to be made public. In our household, I’ve asked my children to use generic items or illustrated avatars in their social media bios.

What I do: Parents who do have active social media accounts may want to do a search of their own names. When my first book was published in 2019, I did a search of my name and images and found many photos of my children that came directly from my social media pages. I hadn’t posted pictures of them, but I did use a family photo as my profile photo and those are public record. Once I deleted them, the photos disappeared.

Another “no” in our household is posting videos or photos of our home or bedrooms. Something that feels innocent and innocuous to your middle schooler may not feel that way to an adult seeking out inappropriate content.

I learned this from one of my children’s Pinterest accounts. My kid loves to create themed videos using her own photos and stock pictures, and she’s gained over 500 followers in a short period of time. She has completely followed our rules and I know, because I check and follow her myself — but it hasn’t stopped the influx of adult men following her content.

What we do: Over the holidays, I sat with her and went through each follower one by one and blocked anyone we decided was there for the wrong reasons. In the end, we blocked close to 30 adult men on her account. (I also know that some predators cleverly disguise themselves as children or teens, and we may not catch them all, but this is still a worthy exercise.)

We also talk to our children about how to protect themselves. They wouldn’t want those strangers standing in their bedroom; therefore, they don’t want to post videos of their bedroom or bathroom or classroom for strangers to view.

This is a tricky one for lots of reasons. For content creators to build their following, they need to remain public on social media. If your child is an entrepreneur or artist hoping to grab attention, locking down their account will prevent that from happening.

That said, a way around this is to have two accounts. First, a private one, locked down and only used for family and close friends, and second, a public one that lacks identifiers but showcases whatever branding the child is hoping to grow. I’ve come across some well-managed public accounts for children who have giant followings and noticed they are usually run by parents, who state that right in the profile. I like this. If your children want public profiles because they are hoping to catch the attention of a talent scout, having the accounts monitored by a responsible adult who has their best interest in mind is a healthy compromise.

This is the exception, however. Most tweens and teens today use their social media for socializing with local friends. The benefit of keeping their account as private (or as private as can be) is threefold. It allows them to screen who follows their content, thus preventing our Pinterest fiasco. It prevents strangers from accessing their content and making it viral without their permission. And it protects them from unsolicited contact with strangers.

Not all social media platforms have the option to make your account “private.” For example, YouTube has parental controls that can be adjusted at any time. TikTok and Instagram can be made private (which means users must approve followers) by making the change in the account settings. Once the account is private, a little padlock will show next to the username.

Snapchat allows users to approve followers on a case-by-case basis as well as turn off features that disclose a user’s location. Notably, Snapchat also informs users when another user takes a screenshot of their story, which is a feature other social media platforms don’t have yet.

Most group chat apps don’t have the ability to go private so much as they ask users to approve of follower requests. Take time to discuss with your children who they allow to follow them and what personal information they allow those followers to know. It’s also a great time to teach them the art of “blocking” those individuals who are unsafe or unkind.

My suggestion is to log in, scroll around and even ask your children to teach you about the platforms they use. Then, when they roll their eyes at you, go ahead and tell them about your first Hotmail email address and the way you picked the perfect emo playlist on your Myspace page … and when they’re bent over laughing, sneak a peek at their follower list. Trust me, it’ll be worth it.

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February 5, 2023
Superbowl LVI was crypto’s coming out party. This year, the party’s over | CNN Business

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CNN
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Super Bowl LVI was the crypto world’s coming out party. Buzzy firms made bold pitches last year, and shelled out millions of dollars on ads encouraging viewers not to be afraid of this new-fangled digital investment — and for God’s sake don’t miss out on this exciting opportunity!

You can expect a lot less noise from Team Crypto during Super Bowl LVII next Sunday.

In the year since those celebrity-packed ads debuted, the entire crypto industry has been rattled by a collapse in digital asset values. Bankruptcies began to pile up over the summer.

Then the real pain started.

Of the four crypto or crypto-affiliated companies that advertised in the Super Bowl last year, one (FTX) has collapsed completely. The others (Coinbase, Crypto.com and eToro) have fought against industry headwinds. Shares of Coinbase, the only publicly traded company in the group, have fallen more than 60% since its “floating QR code” ad became one of the most talked-about spots.

Don’t expect any of those companies to be back this year. FTX is bankrupt and under criminal investigation by federal prosecutors. Etoro, a multi-asset trading platform, confirmed to CNN it would not be splurging on an ad this year, saying that while it continues to invest heavily in marketing, “we dial up or down specific channels based on many factors including market conditions.”

Coinbase declined to comment. Representatives for Crypto.com — the company behind the ad featuring LeBron James telling his younger self to “call your own shots” — didn’t respond to requests for comment.

But there will be at least one crypto-adjacent newcomer. Limit Break, a blockchain-based game developer, has secured a spot and intends to give away 40,000 NFTs, or non-fungible tokens (aka one-of-a-kind digital collectibles) to viewers who scan its QR code. Limit Break, founded in 2021, said it has already raised $200 million and expects to grow “a massive global audience.”

Despite what is being called a “crypto winter,” sports advertising remains a crucial avenue for the digital curency, marketing experts say, as their target demographics share significant overlap — sports fans and crypto traders tend to be mostly male and mostly young.

But turmoil in the crypto space means marketers are changing their tactics.

“The tone has shifted towards Web3-driven fan engagement over crypto-specific advertising,” said Silvia Lacayo, head of marketing at crypto exchange Bitstamp US. (Web3 refers to a future internet framework that is decentralized and gives consumers more control over their own data).

“Crypto firms are focusing less on crypto advertising and more on investing in better user experiences, products, and customer service,” Lacayo added.

Although we don’t yet know the final lineup of advertisers for the Super Bowl, the usual suspects — beer, snacks, cars — are on deck as usual.

“The fact that the crypto players are not going to be on the Super Bowl reflects the fact that that world has profoundly changed,” Calkins said. “Last year it was an exuberant time for crypto … This year, everything is different.”

A year ago, FTX fetched a private valuation of around $32 billion. Its Super Bowl ads featured Tom Brady and Gisele Bundchen. Another FTX ad featured Larry David in a role that, a year later, appears prescient, with David sarcastically predicting that FTX won’t make it.

In November, nine months after the ad debuted, FTX filed for bankruptcy. Several former executives have been charged with wire fraud and conspiracy over allegations FTX misappropriated customer funds.

“It’s amazing how you can look back one year you realize we were in such a different place,” Calkins said. “Last year we had a Super Bowl advertiser saying, ‘fly me to the moon,’” he said, referencing the music in eToro’s ad, which many read as a nod to the meme-stock traders’ rally cry.

But a year of higher inflation, the end of pandemic-era stimulus and higher interest rates has put a damper on financial markets — not only crypto, but traditional markets as well.

That shift in mood will likely show up in the kinds of advertisers we see and in their messaging.

“Our economy’s in a strange place,” Calkins says. “So if you’re an advertiser, it’s hard to know — how do you play that?”

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February 4, 2023
Snap stock plunges 15% as revenue growth stalls | CNN Business

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CNN
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Snapchat’s parent company reported stalled revenue growth and a large net loss for the final three months of 2022, as it confronts tighter advertiser budgets amid broader economic uncertainty.

Snap’s quarterly revenue was just shy of $1.3 billion, essentially flat from the year prior. For the full year, Snap’s revenue grew 12%, a slower rate that the company attributed to “rapid deceleration in digital advertising growth.”

The situation appears to be even worse in the current quarter. Snap said it has already seen a roughly 7% revenue decline so far in the first quarter compared to the year prior. It estimates revenue for the first three months of the year will be down between 2% and 10% compared to the previous year. (Those figures were included in an investor letter, despite Snap saying it would not provide specific guidance for the quarter.)

Meanwhile, Snap posted a net loss of more than $288 million in the quarter, compared to the $22.5 million in net income it earned in the same period a year ago.

Snap

(SNAP) shares fell as much as 15% in after-hours trading following the report.

The report marked the fourth straight quarter of net losses for Snap, which has suffered from increased competition in the social media market, disruptions to its ad business from Apple’s app privacy changes and weaker advertiser demand amid fears of a looming recession. High interest rates and inflation have also impacted many large tech firms.

Snap’s earnings could be a concerning bellwether for the other tech giants that rely on the health of the digital ad market, including Facebook-parent Meta and Google-parent Alphabet, both of which are set to report results this week.

Shares of Meta and Alphabet dipped slightly in after-hours trading Tuesday following Snap’s results.

Snap in August became one of the first big tech firms to announce major layoffs when it said it would cut 20% of its staff. A slew of other tech companies have followed suit in recent months, including Meta, Alphabet, Amazon, Mircrosoft and others, resulting in tens of thousands of job losses in the industry.

In addition to challenges in the digital advertising market, Snap pointed to a change to its ad platform that it expects “will drive improvement for our partners and our business over time, but that may be disruptive… in the near term.”

Perhaps the lone bright spot for Snap in the results is its audience. The company reported having 375 million daily active users in the quarter, an increase of 17%. Snap’s subscription service Snapchat+, which launched last year in an attempt to grow new revenue sources, reached more than 2 million paying subscribers in the fourth quarter, it said.

The company also said it expects to realize the $500 million in cost reductions it had promised as a result of its restructuring by the end of the first quarter.

Still, Scott Kessler, an analyst for investment firm Third Bridge, said in an investor note following the report that, “one of the big questions about Snap is whether it remains a growth story or can soon continue as a growth story,” given its gloomy outlook for the start of this year.

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February 3, 2023
How Google’s long period of online dominance could end | CNN Business

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Washington
CNN
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For the better part of 15 years, Google has seemed like an unstoppable force, powered by the strength of its online search engine and digital advertising business. But both now look increasingly vulnerable.

This week, the Justice Department accused Google of running an illegal monopoly in its online advertising business and called for parts of it to be broken up. The case comes a couple of years after the Trump administration filed a similar suit going after the tech giant’s dominance in search.

Google said the Justice Department is “doubling down on a flawed argument” and that the latest suit “attempts to pick winners and losers in the highly competitive advertising technology sector.” If successful, however, both blockbuster cases could upend a business model that’s made Google the most powerful advertising company on the internet. It would be the most consequential antitrust victory against a tech giant since the US government took on Microsoft more than 20 years ago.

But even though the lawsuits drive at the heart of Google’s revenue machine, they could take years to play out. In the meantime, two other thorny issues are poised to determine Google’s future on a potentially shorter timeframe: The rise of generative artificial intelligence and what appears to be an accelerating decline in Google’s online ad marketshare.

Just days before the DOJ suit, Google announced plans to cut 12,000 employees amid a dramatic slowdown in its revenue growth, and as it works to refocus its efforts partly around AI.

Google has long been synonymous with online searches; it was one of the first modern tech companies whose name would become a verb. But a new threat emerged late last year when OpenAI, an artificial intelligence research company, publicly released a viral new AI chatbot tool called ChatGPT.

Users of ChatGPT have showcased the bot’s ability to create poetry, draft legal documents, write code and explain complex ideas, with little more than a simple prompt. Trained on a vast amount of online data, ChatGPT can generate lengthy responses to open-ended questions, though it’s prone to some errors, or answer simple questions – “Who was the 25th president of the United States?” – which one might have previously had to scroll through search results on Google to find.

ChatGPT is trained on vast amounts of data and uses this to generate responses to user prompts. While ChatGPT’s underlying technology has existed for some time, the fact that anyone can create an account and experiment with the tool has led to loads of hype for generative AI and made the technology’s potential instantly understandable to millions in a way that was only abstract before. It has also reportedly prompted Google’s management to declare a “code red” situation for its search business.

“Google may be only a year or two away from total disruption. AI will eliminate the Search Engine Result Page, which is where they make most of their money,” Paul Buchheit, one of the creators of Gmail, tweeted last year. “Even if they catch up on AI, they can’t fully deploy it without destroying the most valuable part of their business!”

If more users begin to rely on AI for their information needs, the argument goes, it could undercut Google’s search advertising, which is part of a $149 billion business segment at the company. Media coverage of ChatGPT has doubled down on this notion, with some outlets pitting ChatGPT against Google in head-to-head tests.

There are some reasons to doubt this nightmare scenario might play out for Google.

For one thing, Google operates at a vastly different scale. In November, Google’s website received more than 86 billion visits, compared to less than 300 million for ChatGPT, according to the traffic analysis website SimilarWeb. (ChatGPT was released publicly in late November.) For another, even in a world where Google provides specific, AI-generated responses to user queries, it could still analyze the queries to provide search advertising, just as it does today.

Google has its own investments in highly sophisticated artificial intelligence. One of its AI-driven chat programs, LaMDA, even became a flashpoint last year after an engineer at the company claimed it had achieved sentience. (Google has disputed the claim and fired the engineer for breaches of company policy.)

Google CEO Sundar Pichai has reportedly told employees that even though Google has similar capabilities to ChatGPT, the company has yet to commit to giving out AI-generated search responses because of the risk of providing inaccurate information, which could be detrimental to Google in the long run.

Google’s stance highlights both its incredible influence, as the most trusted search engine on earth, and one of the core problems of generative AI: Due to the technology’s black-box design, it’s virtually impossible to find out how the technology arrived at a specific result. For many people, and for many years to come, being able to evaluate different sources of information for themselves may trump the convenience of receiving a single answer.

All this has taken place against the backdrop of what seems to be an extended, multi-year decline in Google’s online advertising marketshare. Google’s position in digital advertising peaked in 2017 with 34.7% of the US market, according to third-party industry estimates, and is on pace to account for 28.8% this year.

Google isn’t the only advertising giant to experience this trend. One-off factors like the pandemic and the war in Ukraine, as well as fears of a looming recession, have broadly affected the online advertising industry. Others, like Facebook-parent Meta, have been particularly susceptible to systemic changes such as Apple’s app privacy updates restricting the amount of information marketers can access about iOS users.

But the decline also comes as Google faces new competition in the market. Rivals including Amazon, TikTok and even Apple have been attracting an increasing share of the digital advertising pie.

Whatever the cause, Google’s advertising business, which is still massive, seems to face growing headwinds. And those headwinds could be exacerbated if some of the predictions about generative AI come to pass, or if the Justice Department’s lawsuits ultimately weaken Google’s grip on digital advertising.

As part of the case, the US government has asked a federal court to unwind two acquisitions that allegedly helped cement a Google monopoly in advertising. Dismantling Google’s tightly integrated ads machine will restore competition and make it harder for Google to extract monopoly profits, according to the US government.

This and other antitrust suits — though threatening in their own right — simply add pressure to the broader dilemma facing Google as it stares down a new era of potentially tumultuous technological change.

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January 28, 2023
DOJ sues Google over its dominance in online advertising market | CNN Business

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CNN
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The Justice Department and eight states sued Google on Tuesday, accusing the company of harming competition with its dominance in the online advertising market and calling for it to be broken up.

The move marks the Biden administration’s first blockbuster antitrust case against a Big Tech company. The eight states joining the suit include California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia.

The fresh complaint significantly escalates the risks to Google emanating from Washington, where lawmakers and regulators have frequently raised concerns about the tech giant’s power but have so far failed to pass new legislation or regulations that might rein in the company or its peers.

For years, Google’s critics have claimed that the company’s extensive role in the ecosystem that enables advertisers to place ads, and for publishers to offer up digital ad space, represents a conflict of interest that Google has exploited anticompetitively.

In Tuesday’s complaint, a copy of which was viewed by CNN, the Justice Department alleged that Google actively and illegally maintained that dominance by engaging in a campaign to thwart competition. Google gobbled up rivals through anticompetitive mergers, the US government said, and bullied publishers and advertisers into using the company’s proprietary ad technology products.

As part of the lawsuit, the US government called for Google to be broken up and for the court to order the company to spin off at least its online advertising exchange and its ad server for publishers, if not more.

Google, the US government alleged, “has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising. Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.”

The suit was filed in the US District Court for the Eastern District of Virginia.

Tuesday’s suit marks the federal government’s second antitrust complaint against Google since 2020, when the Trump administration sued over Google’s alleged anticompetitive harms in search and search advertising. That case is still ongoing. Google has also been the target of antitrust litigation by state and private actors.

In a statement, Google said the DOJ suit “attempts to pick winners and losers in the highly competitive advertising technology sector.”

“DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow,” a Google spokesperson said, adding that a federal judge last year knocked down a claim that Google colluded with Facebook in a separate antitrust suit led by the state of Texas. That judge also ruled, however, that a number of monopolization claims in the Texas case could move forward.

The lawsuit is a frontal assault against Google’s massive, primary business of advertising. Google generated $209 billion in advertising revenue in 2021, according to its annual report, a figure representing more than 80% of its total revenue. By comparison, the next largest giant in online advertising, Facebook-parent Meta, generated $115 billion in 2021.

Third-party estimates suggest that Google and Facebook accounted for the majority of US digital ad revenues, hitting a peak around 2017, with Google taking about a third of the market. Since then, however, others including Amazon have begun encroaching on that business.

The US complaint echoes concerns that have prompted similar antitrust investigations in the United Kingdom and in the European Union.

Google not only controls the platform publishers use to sell online ad inventory, the Justice Department alleged Tuesday, but also the advertising tools marketers use to claim that inventory and the exchange that facilitates those transactions.

“Google’s pervasive power over the entire ad tech industry has been questioned by its own digital advertising executives,” the complaint said, “at least one of whom aptly begged the question: ‘[I]s there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the NYSE.’”

Tuesday’s complaint marks an opening salvo against Big Tech by DOJ’s antitrust chief, Jonathan Kanter. Kanter has spent months laying the groundwork for a broader offensive against the tech industry’s most dominant companies, reflecting commitments by President Joe Biden and others in the US government to hold powerful firms accountable. Under Kanter, Justice Department antitrust officials have pushed to bring more cases to trial as well as to prosecute cases involving unconventional legal theories.

In 2020, House lawmakers released a 450-page report finding that Google, along with Amazon, Apple and Facebook, hold “monopoly power” in key business segments. The report was the result of a 16-month investigation in which congressional staff reviewed corporate documents and interviewed the tech industry’s many customers and rivals. It concluded, among other things, that Google was uniquely positioned to benefit from its powerful role in the online ad industry.

“With a sizable share in the ad exchange market and the ad intermediary market, and as a leading supplier of ad space, Google simultaneously acts on behalf of publishers and advertisers, while also trading for itself,” the report said.

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January 24, 2023
Google’s core business is slowing down amid recession fears | CNN Business

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CNN Business
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Google may be the giant in the digital advertising world, but even it is not immune to the impact that the economic downturn and recession fears are having on the online ad market.

Google parent company Alphabet

(GOOGL) on Tuesday reported earnings results for the third quarter that fell short of Wall Street analysts’ estimates for both sales and profits, due in large part to a sharp slowdown in the growth of its core advertising business.

It reported revenue of nearly $69.1 billion, up just 6% from the same period in the prior year. Google’s advertising revenues grew just 2.5% year-over-year, compared to the 43% growth it posted a year ago. YouTube’s ad business, which competes with TikTok, was especially hard hit, with revenue declining nearly 2% from the year-ago quarter.

Google’s net income, meanwhile, came in at $13.9 billion, down more than 26% from the year prior and well below the $16.6 billion analysts had projected.

The company’s shares fell 6% in after-hours trading Tuesday following the report.

Sundar Pichai, CEO of Alphabet and Google, nodded to the tougher economic climate in a statement included with the results.

“We’re sharpening our focus on a clear set of product and business priorities,” Pichai said. “We are focused on both investing responsibly for the long term and being responsive to the economic environment.”

Tech companies, including Google, reported that they’d started to feel the impact of declining online ad spending in the prior quarter. High inflation, looming recession fears and the ongoing war in Ukraine have all continued to weigh on the industry.

Growth in other areas of Google’s business also appear to be slowing. Google Cloud revenue grew 37% year-over year, a deceleration from the nearly 45% growth it posted in the year-ago quarter, and the segment’s net loss increased to $699 million from $644 million during the same quarter last year.

Net loss from Google’s “Other Bets” segment, which includes business efforts such as its self-driving car unit Waymo, also accelerated year-over-year during the quarter to $1.6 billion.

“Google delivered a disappointing quarter with the search giant underperforming our expectations across almost all business units, most importantly its core ad search segment,” said Investing.com Senior Analyst Jesse Cohen.

During a call with analysts Tuesday, Pichai said the company has begun “realigning resources to invest in our biggest growth opportunities.”

“Over the past quarter, we have made several shifts away from lower priority efforts to fuel highest growth priorities,” Pichai said, adding that the company plans to cut back on headcount additions during the final three months of the year.

Google CFO Ruth Porat said on the call that strong growth in the fourth quarter of 2021 will make year-over-year ad revenue growth comparisons to the current quarter difficult, and that the strength of the US dollar is expected to increasingly weigh on the company’s results. The company did not provide detailed financial outlook for the current quarter.

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October 29, 2022
Meta’s stock falls 17% as its quarterly profit is cut in half | CNN Business

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Meta on Wednesday posted the second quarterly revenue decline in its history since going public and warned that it is making “significant changes” aimed at cutting costs ahead of 2023, as it confronts an economic downturn that is hitting its core online advertising business.

For the three months ended in September, Meta

(FB) posted revenue of $27.7 billion, down 4% year-over-year and slightly above Wall Street analysts’ expectations. The Facebook parent company posted its first-ever quarterly revenue decline during the June quarter.

The company reported net income of nearly $4.4 billion — less than half the amount it made during the same period in the prior year and below analysts’ projections.

“We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company,” Mark Zuckerberg, Meta’s founder and CEO, said in a statement.

Meta’s stock fell almost 17% in after-hours trading Wednesday following the results.

Demand for online advertising has declined in recent months amid rising inflation and fears of a looming recession. Tech companies like Google and Snap have also seen hits to their ad revenues. Meta CFO David Wehner said on a call with analysts following the report that the average price per ad across Meta’s platforms fell 18% during the quarter.

At the same time, Meta’s user growth is slowing amid heightened competition from rivals like TikTok. Meta reported having 2.96 billion monthly active users on its core Facebook app at the end of the quarter, up 2% year-over-year. That’s down from the 6% growth rate it posted in the year-ago quarter. Daily active users on Meta’s family of apps grew 4% to 2.93 billion, down from the 11% increase it posted the year prior.

Zuckerberg noted on the call that Instagram now has more than 2 billion monthly active users and WhatsApp has more than 2 billion daily active users.

These challenges to its core business come as Meta is funneling billions of dollars into an ambitious new bet to build a future version of the internet called the metaverse that likely remains years away.

Wehner said operating losses from the company’s metaverse ambitions, which are categorized under its Reality Labs unit, are expected to “grow significantly year-over-year” in 2023. Reality Labs lost nearly $3.7 billion in the September quarter, and has cost the company a total of $9.4 billion so far this year. Revenue from the Reality Labs unit also fell by nearly 50% year-over-year in the September quarter.

Altimeter Capital, a Meta sharehoder, last week wrote an open letter calling on the company to reduce its headcount expenses by at least 20% and its annual capital expenditure by at least $5 billion, and to limit its investment in the metaverse to no more than $5 billion per year.

In Wednesday’s report, Wehner said the company is “making significant changes across the board to operate more efficiently.” Executives said the company expects headcount at the end of 2023 will be roughly in line with or slightly smaller than the 87,314 it reported as of the end of September (an increase of 28% from the year prior).

“We are holding some teams at in terms of headcount, shrinking others and investing headcount growth only in our highest priorities,” Wehner said. He also hinted that the company could shrink its physical office footprint.

Zuckerberg said on the call that the three key areas of investment for the company in the coming year are its AI discovery engine that’s powering Reels and other recommendations, ads and business messaging, and its future vision for the metaverse. Meta earlier this month unveiled its newest virtual-reality headset, the Meta Quest Pro, and touted its potential for business customers.

In the final three months of the year, Meta expects quarterly revenue between $30 billion and $32.5 billion. On the high end, the projection would mark a 3.5% year-over-year decline from the same period in the prior year.

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October 26, 2022
Tech earnings are coming and they probably won’t be pretty | CNN Business

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CNN Business
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After months of layoffs, hiring freezes and other cost-cutting measures, big tech companies are set to provide the most detailed look yet at just how bad things have gotten for their businesses amid fears of a looming recession.

Snapchat’s parent company, which tanked much of the tech sector in May with a warning about a worsening economy, is set to report third-quarter earnings on Thursday. Apple

(AAPL), Amazon

(AMZN), Facebook

(FB)-parent Meta, Microsoft

(MSFT), Twitter

(TWTR) and Google-parent Alphabet

(GOOGL) will each report earnings results the following week.

“People probably should be bracing themselves for these results,” said Scott Kessler, technology global sector lead at research firm Third Bridge Group.

For years, the giants of Silicon Valley seemed almost immune to swings in the global economy. Even amid a pandemic, a trade war and other geopolitical uncertainty, the biggest names in tech only seemed to grow bigger and richer. But like other sectors in recent months, they have faced a variety of new challenges.

Rampant inflation is eating away at consumers’ paychecks and reducing their ability to spend freely on tech products and services. Increased costs and recession fears have cut down on demand for online advertising and enterprise tech services. And other macroeconomic issues such as continued supply chain snarls and higher interest rates are stunting growth, analysts say.

To make matters worse, tech companies must also confront the growing strength of the US dollar, which is currently trading at its highest level in two decades. That can mean sales made overseas are not worth as much, according to Angelo Zino, senior industry analyst at CFRA Research. A stronger US dollar may also make hardware products from companies like Apple less affordable for foreign consumers, which, as Zino points out, is problematic given “most of these companies are generating more than half their revenue outside the United States.”

In a striking shift, most of the big tech companies are now expected to report slowing profit and revenue growth, or even year-over-year declines, for the three months ending in September, according to analyst estimates.

Amazon

(AMZN), which is projected to be in the best shape, is expected to post essentially flat sales from the year prior. Meta’s revenue is projected to fall 5% year-over-year, marking the company’s second consecutive quarterly revenue decline. Net income at Meta, Amazon

(AMZN), Google and Snap is also expected to be down from the year prior.

These dour projections come after many tech businesses were already showing signs of weakness in the prior quarter. Meta in July posted its first year-over-year quarterly revenue decline since going public in 2012 in large part due to decreased demand in the online advertising market that fuels its core business. Twitter

(TWTR), Snap, Google, Apple and Microsoft all also reported that shrinking ad budgets had taken some toll on their June quarter earnings.

“We compare investor negative sentiment on tech today to what we have seen only 2 other times in our decades of covering tech stocks: 2008 and 2001,” Wedbush analyst Dan Ives said in a note to investors this week, referring to two prior recessionary periods.

Many of the issues currently weighing on tech companies are unlikely to let up anytime soon, which is why industry watchers will be paying close attention to the guidance these companies offer for the rest of 2022.

“More than anything, people really want a good understanding about what to expect” from the final three months of this year, which has “historically been the most important quarter for these companies,” Kessler said. Investors will likely want to know, for example, whether the online ad market has begun to stabilize ahead of the crucial holiday season.

Negative results or future outlook could lead to increased pressure on tech firms to focus on their core businesses and cut back on big bets that aren’t expected to quickly product returns. Some of that is already underway.

In recent weeks, Google announced it would shut down its gaming service Stadia, Amazon said it would stop testing a home delivery robot and Meta shut down its newsletter product, Bulletin.

Meta may be in a uniquely difficult position. Last October, Facebook rebranded as Meta and ramped up investments to build a future version of the internet called the metaverse, which isn’t expected to be fully realized for years, if ever. But the Wall Street Journal reported last month the company was quietly reducing staff — and some analysts expect more cuts to come.

“I do think you’ll see them announce cost cuts. I think they’ll reduce the workforce,” Zino said. “Meta is really boxed in a corner here. Their core business is in an environment where they’re not going to see much growth at all … and they don’t have any major revenue center outside of advertising.”

What a difference a year makes.

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October 20, 2022
The largest newspaper publisher in the US sues Google, alleging online ad monopoly | CNN Business

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Gannett, the largest newspaper publisher in the United States, is suing Google, alleging the tech giant holds a monopoly over the digital ad market.

The publisher of USA Today and more than 200 local publications filed the lawsuit in a New York federal court on Tuesday, and is seeking unspecified damages. Gannett argues in court documents that Google and its parent company, Alphabet, controls how publishers buy and sell ads online.

“The result is dramatically less revenue for publishers and Google’s ad-tech rivals, while Google enjoys exorbitant monopoly profits,” the lawsuit states.

Google controls about a quarter of the US digital advertising market, with Meta, Amazon and TikTok combining for another third, according to eMarketer. News publishers and other websites combine for the other roughly 40%. Big Tech’s share of the market is beginning to erode slightly, but Google remains by far the largest individual player.

That means publishers often rely at least in part on Google’s advertising technology to support their operations: Gannett says Google controls 90% of the ad market for publishers.

Michael Reed, Gannett’s chairman and CEO, said in a statement Tuesday that Google’s dominance in the online advertising industry has come “at the expense of publishers, readers and everyone else.”

“Digital advertising is the lifeblood of the online economy,” Reed added. “Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms.”

Dan Taylor, Google’s vice president of global ads, told CNN that the claims in the suit “are simply wrong.”

“Publishers have many options to choose from when it comes to using advertising technology to monetize – in fact, Gannett uses dozens of competing ad services, including Google Ad Manager,” Taylor said in a statement Tuesday. “And when publishers choose to use Google tools, they keep the vast majority of revenue.”

He continued: “We’ll show the court how our advertising products benefit publishers and help them fund their content online.”

The legal action from Gannett comes as Google faces a growing number of antitrust complaints in the United States and the European Union over its advertising business, which remains its central moneymaker.

EU officials said last week that Google’s advertising business should be broken up, alleging that the tech giant’s involvement in multiple parts of the digital advertising supply chain creates “inherent conflicts of interest” that risk harming competition.

Earlier this year, the Justice Department and eight states sued Google, accusing the company of harming competition with its dominance in the online advertising market and similarly calling for it to be broken up.

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April 12, 2021
Pro-Chinese online influence campaign promoted protests in Washington, researchers say | CNN Politics

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A Chinese marketing firm likely organized and promoted protests in Washington last year as part of a wide-ranging pro-Beijing influence campaign, according to new research.

The Chinese firm also used a network of over 70 fake news websites to promote pro-China content in an example of the more aggressive efforts by pro-China operatives to influence US political debate in recent years, according to security firm Mandiant, which analyzed the activity.

One of the protests was against a US government ban on goods produced in China’s Xinjiang region, where US officials have accused the Chinese government of systematic repression of the Uyghurs. The other protest was on the sidelines of a June conference on international religious freedom, Mandiant said.

One of the protests only attracted roughly a dozen people but it showed the scope and ambition of the pro-China efforts.

The hired protesters, who included self-proclaimed musicians and actors in the Washington, DC, area, apparently had no idea they were being enlisted in a pro-China influence campaign, the Mandiant researchers said.

The campaign backed by the Chinese firm, Shanghai Haixun Technology Co., Ltd., is “intended to sow discord in US society,” Ryan Serabian, a senior analyst at Mandiant, told CNN.

In both cases, protesters carry placards and chant slogans about racial discrimination and abortion in the US. Haixun, the Chinese firm, distributed videos of the protesters online to further the influence campaign, according to Mandiant.

Shanghai Haixun Technology did not respond to a request for comment.

Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, said he was unaware of the details of the research. “China has always adhered to non-interference in other countries’ internal affairs,” Liu said in an email to CNN.

The Washington Post first reported on the Mandiant research.

In the runup to the 2016 US presidential elections, Russian operatives used social media to organize protests on American soil as part of Moscow’s election interference, according to US intelligence officials. Such divisive tactics are no longer confined to the Russians, according to election security experts.

During the 2022 US midterm elections, pro-China propagandists showed signs of engaging in “Russia-style influence activities” that stoke American divisions, FBI officials told reporters last year. The FBI pointed to Facebook’s shutdown of accounts originating in China that posted memes mocking President Joe Biden and Republican Sen. Marco Rubio of Florida.

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April 12, 2021
Meta begins blocking news access on its platforms in Canada | CNN Business

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Washington
CNN
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Meta has begun to remove news content from Facebook and Instagram in Canada, the social media giant said Tuesday, in response to recently passed legislation in the country that requires tech companies to negotiate payments to news organizations for hosting their content.

As a result of the move — which Meta had previously said would occur before the law takes effect — Meta’s Canadian users will no longer be able to click on links to news articles posted to Facebook and Instagram.

The changes began Tuesday and will roll out gradually over the coming weeks, said Meta spokesperson Andy Stone.

The decision comes amid a global debate over the relationship between news organizations and social media companies about the value of news content, and who gets to benefit from it.

Google has also announced that it plans to remove news content from its platforms in Canada when the law takes effect, which could happen by December.

The Canadian legislation, known as Bill C-18, was given final approval in June. It aims to support the sustainability of news organizations by regulating “digital news intermediaries with a view to enhancing fairness in the Canadian digital news marketplace.”

It comes after the passage of a 2021 Australian law that the tech platforms initially opposed by warning it would similarly force them to remove news content. Since then, the platforms have reached voluntary agreements with a range of news outlets in that country.

Like-minded proposals have been introduced around the world amid allegations that the tech industry has decimated local journalism by sucking away billions in online advertising revenues.

In May, Meta also threatened to remove news content from California if the state moved ahead with a revenue-sharing bill. The legislation was put on hold last month.

And at the federal level, the US Senate in June advanced a bill that would grant news organizations the ability to jointly negotiate for a greater share of advertising revenues against online platforms, thanks to a proposed antitrust exemption for publishers and broadcasters.

In a blog post Tuesday, Meta said the Canadian legislation “misrepresents the value news outlets receive when choosing to use our platforms.”

“The legislation is based on the incorrect premise that Meta benefits unfairly from news content shared on our platforms, when the reverse is true,” the blog post said. “News outlets voluntarily share content on Facebook and Instagram to expand their audiences and help their bottom line.”

Canadian users of Meta’s platforms will still be able to access news content online by visiting news outlets’ websites directly or by signing up for their subscriptions and apps.

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April 12, 2021