The Wall Street Journal’s Shira Ovide writes that Google, spurned by Groupon despite its stunning $6 billion offer for the startup, is talking like it’s going to start a similar service to compete.
In other words: Google’s going to have to try to conquer the local-coupon market the old-fashioned way: Create a business from scratch. Oh, and use its powerful monopoly to move it to the top of search results, giving it an unfair advantage.
“When you look at our overall suite of services, especially around our advertising, we already have some things that are like this,” Mayer said, in response to a question about whether Google would just start its own Groupon-like service. “We’re looking at how can we take this technology and put it to use, especially in the location space.”
Yelp is unhappy, needless to say, and it would have helped here if the Journal had noted that Yelp spurned Google’s $550 million offer last year. Here you have a company that refuses to sell to Google,, so the monopoly creates a similar service and plans to automatically bring it to No. 1 in the all-important local search results. How is that not anticompetitive behavior?
Your turn, Groupon.
— Fortune’s Colin Barr has a tough column questioning that sweetheart Bank of America settlement with Fannie Mae and Freddie Mac.
But how sharp is Freddie if all it can do is squeeze a $1.28 billion payment out of a giant customer in exchange for relinquishing fraud claims on $117 billion worth of outstanding loans? The very best its million-dollar executives can do is claw back a penny on each bubbly subprime dollar?…
“How Freddie can justify this decision to settle ‘all outstanding and potential’ claims before any of the private-label putback lawsuits have been resolved is beyond comprehension,” says Rebel Cole, a real estate and finance professor at DePaul University in Chicago. “This smells to high heaven and they should be called out.”
And this is worth watching:
… insurer Allstate last week sued BofA, alleging that offering paperwork filed during the bubble years by Countrywide misrepresented the condition of loans that backed the bonds Allstate bought.
The insurer claimed offering documents indicated, for instance, that none of the underlying mortgages were secured by houses that were worth less than the loan. But Allstate’s analysis found in various cases that between 3% and 15% of underlying houses were worth less than their outstanding mortgages.
“That suit is just a slam dunk against BofA,” said Cole. “Some of the stuff Countrywide was doing, you gotta be kidding me.”
— Slate’s Annie Lowrey has a good piece on unemployment and what will happen to the so-called 99ers—people who have exhausted their extended unemployment benefits—this year.
First, this is a good example of how to make sterile-sounding numbers seem more real:
But none of this changes the fact that, by most yardsticks, 2010 was the worst year for jobs since the Great Depression. The year’s average unemployment rate will clock in at about 9.7 percent—higher than last year’s 9.3 percent and tied for the highest annual rate since the government started keeping official counts in 1948. For all of 2010, in any given month, about 15 million Americans—the population of New England—were looking for work. And, really, in any given month, more needed work. Underemployment—that’s the “official unemployed,” plus people in part-time or temporary positions looking for full-time work, plus people discouraged from the labor market and no longer looking—totaled as many as 25 million.
The economy seems to be picking up a tad—at least temporarily—but the upshot is even faster economic growth isn’t going to be enough to absorb the long-term unemployed anytime soon.
And the depressing truth is, though 2011 should be a better year for jobs generally, there seems to be little help on the horizon for the long-term unemployed. That is not necessarily due to a lack of possible solutions. The federal government could create broad retraining programs or even guaranteed work schemes, as a few European nations have. But congressional will is weak, and such programs are expensive. Though 2010 was the year joblessness was the highest, 2011 may prove to be the year that joblessness became intractable—with a large pool of unemployed, and sometimes unemployable, workers remaining just outside the otherwise sunnier labor market.
This is pretty much going to be a social disaster, one we hope the press devoted lots of resources to documenting.