Morning Brew Daily - Hurricane Milton vs. AquaFence & DOJ Considers Breaking Up Google

Episode Date: October 10, 2024

Episode 428: Neal and Toby chat about Tampa Bay’s General Hospital and its efforts to stop flooding from Hurricane Milton in its tracks with a barrier called AquaFence. Then, the DOJ weighs its options on how to dismantle Google, including the possibility of breaking it up. Next, Amazon introduces a new AI tool that can be your personal shopping guide. Plus, Neal shares his favorite numbers in the pickleball v. tennis turf wars, Mega Millions ticket price, and the Tropicana Las Vegas hotel. Lastly, a prominent french fry supplier for many fast-food chains is struggling to stay open, which puts the french fry supply in jeopardy.  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. To learn more about how Wise could work for your business, visit https://wise.com/business/  Join us at our trivia night! Visit morningbrew.com/events to register  Get your Morning Brew Daily T-Shirt HERE: https://shop.morningbrew.com/products/morning-brew-radio-t-shirt?_pos=1&_sid=6b0bc409d&_ss=r&variant=45353879044316  Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - Happy 10/10 02:10 - AquaFence at Tampa Hospital  07:00 - Google Antitrust Case  11:55 - Amazon AI Shopper  18:00 - Neal’s Numbers  25:50 - French Fries Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today, it's been 40 years since the government broke up a company. Is Google about to make the wrong kind of history? Then how did the innovative flood barrier, Aquafense, fare against Hurricane Milton last night? It's Thursday, October 10th.

Let's ride. Hey, Toby, are you today's date? What? Because you're a 10 out of 10th. Oh, I get it, October 10th. That's pretty good. But, Neil, on a scale of 1 to 10, you're a 9. and I'm the one for you.

But seriously, we should go to Nashville sometimes because you're the only 10 I see. No, but honestly, you're more like a 6 and I'm the one for you. Okay, that's all I got. Feel free to steal any of those. Or none of those. Or none of those.

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While supplies last, ends June 30th, turns at AKA.m.m.S. College PC. Well, the day arrived. Hurricane Milton made landfall last night around 8.30 p.m. slamming into the west coast of Florida as a category three storm. The trajectory the storm took through the warm Gulf waters ended up impacting the state just south of Tampa Bay in the Sarasota Bradenton region. One particular focus would be how Tampa General Hospital would fare given its precarious position on a low-lying island surrounded by water. In preparation for the storm, the facility set up these nine-foot-tall flood barriers. made by a company called Aquafense, which recently went viral for protecting the same hospital as it contended with Hurricane Helene. But Milton in its record-setting storm surge posts an even bigger test, one that so far it's passing with flying colors.

Tampa General, with the help of the barriers, has managed to keep the water out so far, a fact that is sure to put even more of an emphasis on the growing industry of flood protection solutions. An increasing amount of quickly deployable technologies are hitting the market. has governments and communities adapt to a world more prone to flooding. Neil, the second big test in as many weeks, Aquafense is holding up well so far. Yeah, absolutely. And if you're a hospital or a building or anybody in a flood-prone area,

you're probably looking at aquifense and thinking, hey, maybe I'll get something similar to that as storms increase in severity and more flooding happens. Let's talk about how aqua fence works. It has these modular flood walls that are bait up of these one, inch thick panels. They fold and open up similar to a laptop. You put the horizontal panel facing outward. And what happens is as the floodwaters rise, conversely enough, they become even stronger and it bolsters the support. So this company actually started back in 1999 in

Norway to address flooding from spring snowmelt. But they've made a huge push into the United States. They're now in 24 states. And according to the U.S. president, not the U.S. president, but the company's U.S. president, they now protect $30 billion worth of real estate in the United States. Right. A lot of big companies use a lot of big corporations, J.P. Morgan, Wells Fargo, Citigroup, U.S. military bases, LaGuardia Airport. And the reason why a lot of those are kind of New York focus is because it made, I mean, call it its big break, but in 2012, when Hurricane Sandy hit the East Coast, that's when a lot of these companies started contending with the fact that they did need some sort of flood protection solution.

So this is a little bit of a pricey solution, though. I mean, they range in price from $350 to over $1,000 per linear foot, depending on how much of a barrier you want to construct. But with these older buildings like Tampa General Hospital, which is over almost 100 years old at this point, they don't have great flood planning because at the time it just wasn't top of mind. So you are seeing some of these newer buildings create more of a plan for flooding, but some of these older buildings definitely need these rapidly deployable,

these easily foldable and storable solutions like aqua fence. Right. The existing solution is sandbags, but those can only be used once. And one of the selling points for temporary flood barriers is that they can be reusable aqua fence. It can be reused up to 60 times. Let's just zoom out to what's going on with the hurricane, you know, estimates coming in.

If it were a direct hit on Tampa, could be damage of up to or exceeding 100, billion dollars, which would be the price, one of the pricest storms in history. Right now, as of 6 a.m. Eastern, it looks like more than 3 million customers, businesses, and individuals are without power in the region. It spawned tornadoes as it came in, but as of now, it has passed through Florida. It's exited the coast as a category one, so I'm sure as daylight comes, they'll be surveying the damage. And the United States government and regulators have started been warning yesterday against price gouging, which can happen during disaster scenarios.

One of the items that will be of major focus is gas because a quarter of all gas stations in Florida yesterday leading up to the storm were without gas. So the basically regulators, Lena Kahn at the FTC said price gougers, you're on notice. Don't jack up prices during these disaster situations. Right. Most states have laws intended to curb price gouging in the face of an emergency like this, a declared emergency like this. And then you're right, the Justice Department's antitrust division is sending out these warnings saying, like, hey, do not use the hurricane as an excuse to exploit people through this illegal behavior and also giving people some things to watch out for. Like, do not donate to fraudulent charities.

Do not get, look out for scammers who are trying to get personal information off you. So this is like the next layer of what happens amongst, of course, like the cleanup effort that happens, but also be on the lookout for some of these like price gouging and these scammers out there. Yeah, so we hope everyone who's listening to this in the area is staying safe. If you find Google playing since you've been gone on repeat, it's because it's on the verge of a really bad breakup. Yesterday, the DOJ said it was considering seeking a breakup of Google after its landmark antitrust victory earlier this year when the agency convinced a judge that Google's search engine was an illegal monopoly.

After that big win in round one, the DOJ got to work on round two in which it has to propose possible remedies to unmonopoly Google. One of those remedies we learned in a filing late Tuesday night is splitting up Google into multiple pieces. It wouldn't be unprecedented, but there's not much recent precedent. The last time U.S. antitrust regulators broke up a company was 40 years ago, sorry AT&T, and most of the corporate breakups in U.S. history came in the early 20th century with the splitting up of standard oil and American tobacco.

So breaking up Google would be. historic. Of course, there's a long way to go before that would happen. The ultimate decider in this case is the judge, and he might not agree that breaking up Google is the proper remedy for its behavior, and Google could appeal and win like Microsoft did under a similar threat in 2001. Toby, I'm putting you in the judge's robes right now, maybe even his wig. You've already decided that Google searches an illegal monopoly is breaking it up a compelling argument. Well, clearly the DOJ wants to make an exam. of Google here. One DOJ higher up has said that this verdict belongs to the Mount Rushmore of

antitrust cases. So of course they were going to recommend the extreme. What would that extreme look like? Well, it entails separating its search business from things like Android Chrome, the Google Play App Store, the goal being to prevent Google from leveraging all these products together to promote its search engine. But if I am the judge, I don't know if I'm going that far because Google is just so entrenched in a lot of people's daily lives that it could potentially be more harmful to break it up. So, like, for instance, the whole developer ecosystem relies on Google to maintain Android and its ability to work across platforms. I mean, Peloton uses Android to power its bikes. Airplane manufacturers use it to power their screens. Supermarkets use it to

run those little consumer kiosk. So would lopping Android off from Google really be to the benefit of consumers? It could actually cause more problems than it's solved. So maybe if I'm donning those judge robes. I'm looking at the broader impact here and not going so as far as maybe the Department of Justice wants me to. You sound exactly like Google because in its response to the proposed remedies from the DOJ, it said those were radical and sweeping beyond the scope of the legal issues in the case and a threat to consumers, businesses, and American competitiveness. One thing that could be within the scope of the case, remember, the judge said that those exclusionary agreements that Google made with phone manufacturers and web browsers to make it the default search engine

was the main way that it wielded its size and scale to be an illegal monopoly and entrench its dominance in search. So one thing that the judge could do, and the DOJ did also propose, it proposed a suite of options, not just breaking up Google. There's a lot of different options here. The judge could narrowly ban these exclusionary contacts. Remember, Google paid phone manufacturers and other companies $26 billion in 2021 to be the default search engine, and 20 billion of those went to Apple alone so that when you open up your iPhone and go on Safari and search for something, it's always going to be Google instead of Bing in the first place. So that could be one possible remedy here is to ban those exclusionary contracts.

I do think one potential remedy, too, that the DOJ is looking at is limiting Google's ability to use other websites to train its next generation of search, which is this AI power. search, so they are looking forward and saying we don't want Google to dominate, like, this next option of, like, search engines that are imbued with AI, but then Google could turn around and say, like, hey, the fact that you are already trying to worry about the next generation of search shows how under attack we are right now, because we've talked about perplexity. We've talked about these other AI imbued search engines that are chipping away at Google's dominance. So even though the DOJ doesn't want them to just immediately re-entrench themselves in

this new age, Google's saying, we're already on the back foot. We're already on the back foot here. Like, you're, you are actually making an argument for us. So, but yes, let's zoom out here for a little bit. This is going to be a long process. I mean, this decision isn't expected until 2025. And even then, Google can appeal after that. So there's going to be more podcasts. There's going to be more times that we're, we're talking about this because this thing is far from over. If you're like me, and get a little paralyzed when trying to shop for stuff online, Amazon has the answer for you. AI-powered shopping guides, which is unveiled yesterday.

To save you from getting lost scrolling the endless online aisles of the Everything Store, Amazon is serving up automatically generated buying guides that point out specific features or use cases about a product or answers common questions buyers have. Think of it as an automated version of wirecutter or your friend who has good taste. You can see the vision behind this rollout too. Amazon wants AI to help initiate more purchases so you do less time researching and more time giving Amazon your money. Neil, this is step one in imbuing AI into our shopping habits, but it's not hard to envision what steps two and three might look like.

Word of the day for you, imbue, first of all. Second of all, yeah, so Amazon hasn't really had a flashy AI launch. If you look at its big tech competitors, OpenAI has ChatGBT, BT, meta has meta AI, Apple has Apple intelligence, and then we're looking at Amazon saying, well, you know, what are you doing with AI? And this looks like to be the first step of getting a consumer-facing AI in front of people. And if you're wondering what Amazon wants AI to do, it's obviously to help you buy stuff quicker. And so these AI guides, we looked at them, they're a little underwhelming, not a little underwhelming, pretty underwhelming. But it is

just the first step to infusing AI, see infusing, not imbueing, into the whole process of buying thing on its site. So it can be faster. And I think people, I think they have identified a need that people don't want to spend as much time browsing to buy stuff, and especially on their site, because it is so overwhelming, overwhelmed with ads that this could be a particularly good use case for, you know, an AI chatbot or something even beyond that to help you buy stuff. I do think, yeah, this is a precursor to a lot more sophisticated AI agents that help you shop, that potentially do things like put things directly in your cart. Maybe there's a future where you're, the AI knows that you always order toilet paper on this interval so it starts suggesting

like, hey, are you running low on toilet paper here? You've been in a logical, no, not that far. But it is one of those things that, or if you enter a category that you're not familiar with, I mean, I've been trying to shop for a bed for a long time. And it is, if you go on Amazon, there's hundreds of beds. So maybe there's a, it can help you navigate a category you're not so familiar with. Another option, too, is like, maybe you've been reading multiple books in a book series. And then after a certain amount of time passes after you order the first one, it would say, hey, do you want to order the second one? So there's a lot, if you expand this concept of AI helping suggest products and maybe even helping that buying process go a little quicker and a little

smoother, you do see the vision here for Amazon and suddenly you say maybe it is pretty well positioned to actually have an AI use case that drives revenue. I think it has a much clearer path towards driving revenue that maybe some of these other big tech companies' uses of AI does. Do you think people would rebel against AI recommendations? It really depends on if it's good or not. Because if it's not helpful, then of course people are going to rebel against it. But if it is something where I genuinely feel like this AI agent has helped me figure out what the right bet is for me, or if it does actually suggest products that I am running low on, then suddenly it becomes this magical use case. So I do think it comes down to execution.

I mean, you could say that about a lot of things. All right, coach. Yeah, I know. I'm giving a pep talk right now to Amazon. But I do think it is positioned in a better spot than you might think because it has been generally quiet on the AI front. but I think it's going to do just fine. Up next, get hyped with me because we got Neal's numbers coming your way. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars.

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Welcome to Neal's numbers, the segment where I pick three stats from the week's news that will make you an absolute menace at bar trivia. My first number will anger you if you're a tennis fan, but they'll let you if you're a member of the growing pickleball hordes. At least 10% of all tennis courts in America have been taken over and repurposed for pickleball, the USDA said, showing how in the bitter turf war between racket sports, pickleball is gaining major ground. And it checks out. Pickleball is the fastest growing sport in the United States,

recording a 223% increase in participation since the pickleball boom started three years ago. More than 10 million people picked up a pickle paddle, say that 10 times fast, in the last 12 months, doing their best to stay out of the kitchen at 65,000 courts across the country. The main problem for the USDA,

a tennis organization, is that their sports, is growing fast too, but the pickleball land grab has left them lacking in the real estate category. There are not enough courts to support tennis growth, USTA CEO, Lou Scher told the Wall Street Journal. Court infrastructure is being compromised with people playing pickleball on those courts or courts being repainted. Tennis legend Novak Djokovic is also worried at Wimbledon this summer. He said the rise of pickleball and another racket sport paddle means tennis is in danger. I mean, for a long time, I wouldn't even describe this as a war. because the USDA's position was the more people that are picking up rackets is going to be generally good for the sport.

But you're right. Now there is this court space, this turf battle, whatever you want to call it. And I do think that is going to be a problem because there's only so much space in the U.S. to support these racket sports. I do think that part of the issue for tennis is it just makes so much commercial sense to convert tennis courts to pickaball courts. You can fit two pickleball courts on one tennis court that can support up to eight players. So if you are a country club or something saying, all right, I have these members who want to participate in these racket sports, do I want to double the amount of space for them or do I want to keep it with tennis? So that and the fact that it is so easy to convert to tennis court, all it takes is a couple of repainting the lines. It's pretty easy.

And I see the issue that tenants is facing. I hope everyone can live together in this racket sport world, though. I think ultimately we will reach an equilibrium between tennis and pickleball, both great sports. I also have two new, two other tennis news while we're on the subject. Yesterday, Wimbledon said it was replacing line judges with electronic line calling like the U.S. Open has done since 2021. I like it. I mean, it is just a better system. I get the tradition and like how nice it is to have those polo-clad lines judges in Wilmington, but it just makes too much sense.

And this is breaking news, actually. As of 20 minutes ago, Rafael Nidal is going to retire after. next month. And Toby doesn't even know this. I was just looking at my phone while he was talking. I know. Neil's like, I have tennis news to break. I'm like, what could it possibly be? Oh, dang it. That makes me sad now. Okay, let's move on. For my second number, the cost of buying a ticket to a jackpot you'll never win is going up substantially. This week, Mega Millions announced that its ticket prices are more than doubling from $2 to $5 come April 2025, just the second price increase in the lottery operator's 22-year history. But it's trying to cushion the

price hike with a promise. You pay more, you get more. Mega million, or you could get more. Mega Millian said that the jackpots will start at a higher level and it's eliminating break-even prizes, where you just get your money back and nothing more. Moving forward, every winning ticket will carry an award higher than the cost of a $5 ticket. It's a bet that people will be more motivated to buy tickets no matter the price if the jackpot is high enough. As Joshua Johnston, the lead director of the group that oversees Mega Million said, spending five bucks to become a millionaire or a billionaire, that's pretty good. But when you put it that way. I'm very curious about what the impacts this will have on ticket sales. Will it go down or

will it go up? Because you're right, it is this interesting psychological phenomenon. Like, are people going to be more willing to spend more if they are also being told that you have a better chance of winning? Again, that chance is still won in over 300 million. So even though the chance did get greater, it's still infinitesimally small. But I do think that the lottery did the research here, they ask people, would you be willing to pay more if you had bigger jackpots more frequently? And I think the answer will be yes. Yeah. You do see it time and time again, as soon as that jackpot level hits a billion dollars, there's a surge of media attention and a surge of people buying the ticket. And they think that those bigger jackpots, faster-growing jackpots,

are going to outweigh the pretty more than double price increase. Plus, this is also, they're in a big competition with Powerball and they want to stand out. My final number is, is 22 seconds, which is all the time it took to turn a nearly 70-year-old Las Vegas icon into a pile of rubble. In the early hours of Wednesday morning, the Tropicana Hotel and Casino, the last true mob building on the Vegas Strip, was imploded to make way for a future baseball stadium of the relocating Oakland Athletics. This wasn't your typical building implosion because Las Vegas isn't a typical city. The Tropicana went down in a blaze of glory, accompanied by a seven-minute fireworks show and a 555 drone salute all live streamed, of course.

Vegas has made a spectacle of implosions ever since 1993 when former casino mogul Steve Wend thought everything else in this town is a show. Why can an old building being blown up also be one? That year, he made it appear as if the pirate ships from his casino across the street, Treasure Island, were firing on the dunes as it was cleared out for the Bellagio. It's been a minute since Vegas could revive the tradition, though, the last strip resort to be imploded before the Tropicana was the Riviera, which was taken down in 2016. Yeah, I saw someone right that tearing down casinos is how Las Vegas bolts. So this is like a shedding and a regrowth of a new era. It's becoming a little bit of a sports district now too because

that same neighborhood that contains Allegiance Stadium, which is home to the Las Vegas Raiders, and then T-Mobile Arena, which hosts UFC fights as well. So now the Oakland A's new athletic arena will go there as well. So the space where Tropicana once due, is becoming sports ground zero for Las Vegas. It's progress. I mean, a lot of people are saying it's real, I don't know. It's just the inevitability of Las Vegas. Like this happens over time.

Transformation. Transformation. So I do think that some people had some memories in the, in the Tropicana, Las Vegas. It appeared in a lot of films as well, 1971, James Bond movie. The Godfather was filmed there or a scene there as well. So it was open since 1957. So a lot of memories, a lot of cultural. cachet, as we like to say, wrapped up into that, but now it's gone.

If you've been opting for a side salad instead of french fries more recently, Lamb Weston would like a word. Lamb Weston is the largest producer of French fries in North America, and its main customer is the fast food industry. McDonald's alone accounts for 13% of Lamb Weston's sales. So if business is good and people are failing into the Golden Archest, then Lamb Weston is loving life. But if demand slows, it feels the pain, and right now it is full.

feeling the pain. McDonald's saw sales at U.S. restaurants fall last quarter compared to a year prior while it struggles with declining foot traffic. So Lamb Weston is laying off 400 employees and closing down one production plan because it is oversupplied at a time when demand for fries is limper than that fry you forgot at the bottom of your bag. Neil, it's not quite a potato apocalypse yet, but Lamb Weston really needs people to start chowing down on French fries again. It actually has to do a lot with these meal deals that the fast food industry rolled out this summer. Remember, there's a lot of concern that inflation was having people not go to these fast food joints. And there was price parity with Chipotle.

And if you're going to pay $12 for McDonald's or Chipotle, maybe you'll go to Chipotle. And then when all these fast food joints like Burger King Wendy's McDonald's rolled out these meal deals, this $5 value menus, the problem is those come with small fries. And people aren't buying large portions of fries. They're getting the small fries with these value menus. And that has been terrible, frankly, for this French fry company, this potato company. Shares are down 35%. It had to close the plan.

And it's just a lot of pain for the French fry company. If your main customer is the fast food industry and fast food traffic has been going down 2% last quarter and 3% the previous quarter. And people are opting for smaller fries over large fries. fries. That's bad news. One thing that could save Lamb Weston and save the fast food industry, or at least McDonald's, is that they are rolling out the chicken big mac today. They say it is essentially still a big mac. It just has two of these tempera battered chicken patties instead of beef. I think that this is going to be a massive hit. I mean, there's been this broader

shift in the fast food industry towards putting more chicken on menus per capita consumption of chicken in the U.S. has skyrocketed over the past 50 years or so. consumption has slowly decreased. So we've seen like the rise of these chicken restaurants, Chick-fil-A, obviously being the biggest one. So I think McDonald's put, remaking their classic Big Mac to include chicken might drive that food traffic and potentially save Lamb Weston as well. All right.

That is all the time we have. Thanks so much for starting your morning with us and have a wonderful Thursday. We love hearing from you. So please send any feedback on the show to morning brew daily at morningbrew. com. Then take just one minute of the day to send Morning BrewD Daily to a friend. co-worker or family member who doesn't listen to the pod yet. If you're having some decision paralysis on who to share it with, Toby has you covered.

I actually want you to share today's show with your crush. Maybe even send them some of the pickup lines we offered up at the beginning of the show. I don't know. Shoot your shot, everyone. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer.

Eugenwa Ogu is our technical director. Billy Minino is on audio. Hair and makeup always wants fries with that. Devin Emery is our chief content officer and our shows of production of Morning Brew. Great, show today, Neil. Let's run it back tomorrow. Hey, Mama. Thanks for making all my favorite recipes. Hi, Ma. Thanks for your unfiltered advice.

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