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| Happy Friday, Insiders!! Today's Business newsletter covers: - 🐾 Walmart expands pet care offerings with new center
- 📊 Deep Dive: Google's U.S. digital ad share slumps
- 🛍️ Cisco buys Splunk for $28B
If you enjoy reading this newsletter, please share it with your friends and colleagues. If there's a topic you want to see discussed in the newsletter, let us know! Thank you!! Shriram
p/Shriram | |
| 1 | | Walmart is opening its first pet services facility in Dallas, Georgia, offering veterinarian care and grooming services as it looks to increase its footprint in the expanding pet business. The action fits in with Walmart's objective to serve pet owners and provide all-inclusive pet services, emphasizing their importance to its client base. More: - Research by Morgan Stanley found that services account for around 40% of the total income in the pet sector.
- A vet care and pet product company called PetIQ, which has previously collaborated with Walmart, will staff the center.
- The center offers services for $15 to $97, such as dental cleanings, haircuts, nail trims, and wellness checks.
- Like Chewy's Autoship, Walmart has also launched a subscription-based service that automates routine pet supplies and food deliveries.
- Walmart's entry into the pet industry aligns with its efforts to broaden the scope of its services beyond traditional retail, and it also has benefits for Walmart+ members.
Q: Do you think opening pet service centers will attract more customers to Walmart's stores and boost its overall business? Join the conversation here. |     | |
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What the numbers say: Google's share of U.S. Digital Ad Spending has continuously decreased for eight years. Google's Jerry Dischler, VP for Advertising Products, shared that search ads contributed over $100B in 2020, accounting for about two-thirds of Google's total revenue. While Google has around 5 million advertisers compared to Meta's 10 million, approximately 35% of Google's search ad revenue comes from retail. Amazon now surpasses Google in retail advertising and is growing twice as fast, prompting some consumer goods manufacturers to consider moving their ad spending to Amazon. Relevance: The Google antitrust case raises questions about the company's hegemony in digital advertising, notably in search ads, and its potential to lose market share to rivals like Amazon and TikTok. More data: Google regularly implements undisclosed tweaks to its ad auctions that can raise prices, like RGSP (Runner-Up Gets Top Slot), which boosted revenue by showing runner-up ads first, but recent shifts in digital advertising, including from Apple's privacy changes, have opened the door for significant competitors like Amazon versus the five-year dominance of Google and Meta. | | | |
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| 3 | | The largest purchase in Cisco history will see Cisco Systems buy cybersecurity company Splunk for almost $28B, with a focus on its software business and AI potential. With expectations to finalize by the end of Q3 2024, subject to regulatory clearances and without Chinese regulatory approval, this acquisition seeks to lessen Cisco's reliance on its networking equipment business. More: - With a subscription-based pricing structure and a focus on data observability, Splunk enables businesses to monitor systems for cybersecurity risks and threats.
- With a 31% premium over Splunk's most recent closing price, Cisco paid $157 in cash for each share.
- In response to probable regulatory scrutiny, Splunk's shares increased by nearly 21% to $145.04, below the offer price, while Cisco's shares decreased by 4%.
- The acquisition is expected to accelerate revenue growth and expand gross margins at Cisco in the first fiscal year following the close, reaching $4B in annual recurring revenue.
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| 4 | | Big Deal Round-Up M&A: - U.K. auto retailer Pendragon is selling its dealerships for $342M to U.S.-based Lithia and pivoting to software.
- Studio Ghibli, known for films like Spirited Away and My Neighbour Totoro, will become a subsidiary of Nippon Television Holdings Inc., with the network having 42% voting rights, in a move intended to secure the continuation of these well-known films.
Private Equity: - Chelsea FC secured $500M from U.S. alternative investment manager Ares as the Premier League club seeks to increase revenue.
- Glenmark Pharma plans to offload a 75% stake in its life sciences unit to detergent manufacturer Nirma for $679.84M, with the proceeds aimed at debt repayment, according to the company's announcement on Thursday.
Partnerships: | | | |
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| 5 | | Darden Restaurants, the parent company of Olive Garden, posted an 11.6% surge in net sales in its fiscal first quarter, with Olive Garden reporting a 6.1% rise in same-store sales. However, the company's fine dining segment, comprising The Capital Grille and Eddie V's, experienced a larger-than-expected 2.8% decline in same-store sales. More: - The most substantial success came from LongHorn Steakhouse, a restaurant part of Darden's portfolio, with same-store sales increasing by 8.1%.
- Darden just paid $715M to acquire Ruth's Chris Steak House; however, its sales still need to be accounted for in the same-store sales figures.
- The company anticipates more significant synergies than initially thought about the Ruth's Chris purchase.
- Darden reaffirmed its expectation for the fiscal year 2024, projecting net sales of between $11.5B and $11.6B and adjusted earnings per share of between $8.55 and $8.85.
- In early trade, firm shares increased by less than 1%.
- Despite consumers being more picky about where they eat, Darden reported earnings per share of $1.78 and revenue of $2.73B, exceeding experts' predictions of $1.74 per share and revenue of $2.71B.
- Darden increased its fiscal first-quarter net income from $193M to $194.5M, or $1.56 per share, over the same period last year.
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| 6 | | Amazon faces competition from Temu and Shein's low-priced, slower-shipping e-commerce model but has yet to match their prices, leading executives to weigh making budget, long-delivery options more visible on Amazon to counter rivals targeting bargain-seekers flexible on delivery times. Temu and Shein cater to customers who value price above speed by shipping straight from China in contrast to Amazon's price matching and quicker fulfillment. More: - While Temu sells various goods, Shein has grown to become America's largest fast-fashion retailer.
- Shein's new marketplace for U.S. customers has attracted thousands of Amazon sellers, including some from the U.S., reports research firm Marketplace Pulse.
- However, Amazon has a considerable delivery edge over these rivals due to the size of its logistics network and the availability of its Prime subscription program.
- Some Amazon buyers looked first at Temu and Shein because they could find comparable items there for less money.
Zoom Out: - Due to reports of suspected forced labor and other human rights violations against Uyghurs in China's Xinjiang province, Shein and Temu are under regulatory investigation in the U.S. for obtaining cotton from there.
- Amazon's Prime Video platform intends to introduce ads in its shows and movies, following a trend of streaming services seeking advertising revenue amid industry losses.
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| 7 | | Quick Hits: - FinOps can be a game-changer for your organization. This guide shares expert tips on efficient cost management. Read now.*
- In November, Rupert Murdoch, 92, will formally become chairman emeritus and relinquish his position as chairman of the board for News Corp. and Fox Corp.
- The Biden administration is set to provide four free at-home COVID-19 tests to American households starting Monday through COVIDtests.gov in response to the growing presence of the virus in the country.
- The Energy Department is providing $325M to 15 projects in 17 states and the Red Lake Nation, spread among 15 projects, to create sophisticated batteries that can store renewable energy and enable continuous power generation from solar and wind sources.
- GM halted a Kansas assembly plant due to parts shortages from the UAW strike, leading to 2,000 layoffs, and Stellantis laid off 370 workers at parts factories supplying its Jeep plant impacted by the same strike, with GM noting that these workers won't receive regular supplemental unemployment benefits.
- With the right process and tools, dev teams can ship gold every week. This guide breaks down a proven approach to product delivery.*
*This is a sponsored listing. | | | |
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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