A blog about business and economics.

Aug. 12 2014 2:15 PM

Increasingly Desperate Lyft Accuses Rival Uber of Dirty Business Tactics

In the fight for ride-sharing dominance, Lyft has started throwing punches. After attempting to stay above the fray for months, the pink-mustachioed car service ditched its upbeat attitude and accused rival Uber of deliberately sabotaging its operations by repeatedly ordering and canceling Lyft rides.

Lyft claims that 177 Uber employees have booked and canceled 5,560 rides since Oct. 3, 2013. Instead of bait and switch, call it book and ditch. CNN Money reports that Lyft identified this tactic by crossreferencing the phone numbers of "known Uber recruiters" with numbers attached to accounts that canceled rides.

This is not the first time that Uber has been accused of shady business tactics. In January, taxi-hailing app Gett said that dozens of Uber employees had employed the same book-and-ditch strategy to tie up its platform. Gett claimed the subversion came from at least 13 Uber employees and went as high up as New York general manager Josh Mohrer. For both Gett and Lyft, Uber's approach did damage on multiple fronts: delaying service, frustrating drivers, and likely sending some customers who saw increased wait times over to Uber.

What's interesting in Lyft's case is not just that it is being targeted by Uber but also that it has chosen to make that publicly known. Lyft has been shopping around the story of Uber's book-and-ditch attacks to journalists (including two at Slate) for several months but until recently had opted to keep the information off the record. "It’s something that’s happening and taking place," says Erin Simpson, a spokeswoman for Lyft. "Frankly, it's not a good use of my time to be talking about the things that Uber is doing."

Simpson says the company's calculus changed after learning that drivers who worked both for Lyft and for Uber were being bullied for doing so. Multiple drivers said Uber told them (falsely) that working for both companies violated New York City's Taxi and Limousine Commission regulations and threatened to report them. "We were told by drivers that Uber representatives had called them and said 'We know you're driving with Lyft,' " Simpson adds. Uber issued a statement denying the allegations as "patently false."

While Uber may very well be engaging in dirty business ploys, Lyft's decision to lash out at its competitor suggests a growing frustration, and perhaps desperation, at the company. Just last week, Uber stole Lyft's thunder when it pre-empted a carpooling announcement Lyft had spent months on—and touted as its biggest contribution yet to the future of transportation—with its own release of a virtually identical service. In terms of size and scope of the two companies, there's no comparison. Uber has raised $1.6 billion for a massive $18.2 billion valuation, Lyft a mere $333 million that values it at $700 million. Uber is in 92 cities in the U.S. and 70 outside of it; Lyft operates in 67 U.S. cities and has no international presence.

So far being the nice guy hasn't worked for Lyft. Now it might be changing its tune.

Update, August 12, 5:08 p.m.: Uber continues to deny Lyft's accusations and is offering an explanation for the hostility—Lyft is upset that Uber hasn't acquired it. "These attacks are unfortunate but somewhat expected," Uber said in a statement. "A number of Lyft investors have recently been pushing Uber to acquire Lyft. One of their largest shareholders recently warned that Lyft would "go nuclear" if we do not acquire them. We can only assume that the recent Lyft attacks are part of that strategy."

Lyft, for its part, dismissed Uber's claims: "Once again Uber is deceiving the public, now with false allegations and an attempt to deflect from their illegal cancel campaign."

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Aug. 12 2014 11:25 AM

After Deadly Crash, Will Corporate Sponsors Abandon Tony Stewart?

Under the usual circumstances, a famous athlete who had just indisputably killed a man would shed at least a few, if not all, of his corporate sponsors. Yet in the case of NASCAR star Tony Stewart, companies seem to be taking a wait-and-see approach—which speaks to the murky nature of the deadly accident on Saturday at the Canandaigua Motorsports Park in upstate New York, where the former Sprint Cup champion struck and killed 20-year-old driver Kevin Ward Jr., who had run onto the track seemingly to confront Stewart after their cars collided during a race.

“Our thoughts and prayers remain with the Ward family, Tony Stewart and all of those affected by this terrible tragedy,” Mobil 1, one of Stewart’s primary sponsors, said in a statement. “We are monitoring the situation closely and continue to respect the process local officials are taking to gather all of the information.” Another sponsor, Coca-Cola, said in its own statement, “We are aware of the tragic accident that took place over the weekend. Our thoughts and prayers are with Kevin Ward’s family, and with Tony and the Stewart-Haas race team.” National used-car dealership J.D. Byrider stated that it is “monitoring the situation, and we have not made any changes to our sponsorship agreement with Tony Stewart at this time.”

Often described as “brash,” Stewart has a famous aggressive streak—he’s thrown punches and helmets at competitors and reportedly sought anger management counseling. But so far, the local sheriff in Canandaigua says investigators have found no evidence of criminal intent on Stewart’s part. As Sports Illustrated explains, he could still face a charge such as negligent homicide, which would not require demonstrating that he meant to kill Ward. But that charge might not stick, either, given that Ward ran onto a poorly lit dirt track, wearing dark clothes, in the middle of a live race. It was a supremely unsafe decision. As my colleague John Swansburg wrote, it’s nearly impossible to tell exactly what transpired just by watching the gruesome video of the crash that has circulated online.

Unless Stewart faces criminal charges, experts say, it’s unlikely any of his sponsors will abandon him. “I don't think that there are people out there who would stop supporting [a company] because of its relationship with Tony Stewart," Ramsey Poston, a former NASCAR executive and president of public relations company Tuckahoe Strategies, told CNBC. "I just don't see it rising to that level at all.”

If the controversy does escalate, Stewart’s stock could quickly drop, in part because of the unusually strong association between NASCAR drivers and the companies that sponsor them. Racing stars like Stewart are paid practically as full-time corporate pitchmen. Whereas Rafael Nadal would never thank his sponsor shoe company after winning a French Open, it’s considered de rigueur for Stewart and other drivers to reel off their sponsors’ names after winning on the track. They put in celebrity appearances at corporate events and star in TV ads, including this Smokey and the Bandit takeoff that Stewart cut for Mobil 1. Given how tightly bound up sponsors and drivers are, it’s easier to imagine any blowback from the accident hitting the companies. Even if he’s cleared of any wrongdoing, it’s uncertain how many corporations would want a grinning Stewart pitching their products after this sort of tragedy.

Should his sponsors begin having second thoughts, the stakes for Stewart would be much higher than for other athletes who have lost sponsorships. When players in sports such as basketball or even golf lose a corporate backer, they lose money—but not their ability to compete. Companies quickly fled Tiger Woods after his serial infidelities came to light, but he managed to soldier on, eventually reclaiming the world’s top ranking.

In race-car driving, however, sponsors are responsible for funding teams’ basic operations. The details of NASCAR sponsorships are generally shrouded in secrecy, as Craig Depkin, a sports economist at the University of North Carolina–Charlotte, told me. But leaked documents indicate that top teams earn in the ballpark of $20 million per year by letting companies plaster their logos all over their cars and suits. That money, combined with winnings, helps cover the massive expenses involved in running a sophisticated racing operation, which may involve 100 employees custom-designing and building cars and engines, race after race. As author Jeff MacGregor has described it, “The big-money teams have stables of cars for each driver. They have an arsenal of primary and backup cars specially built and dialed in for the superduperspeedways or the short tracks or the road courses or the mile-and-a-half ovals. As many as 15 or 16 cars per driver.”

Stewart is reportedly worth north of $100 million. But even with his personal fortune, it would be hard—maybe impossible—to compete on that level without the support of companies like Mobil 1. It may not help that he races under his own company, which also supports big-name drivers like Danica Patrick and Kevin Harvick.

“The existential threat of sponsors leaving is more acute than it would be in other sports such as golf or tennis,” Depkin said. Unless Stewart faces charges, or a sudden wave of outrage from NASCAR fans, it’s not a good bet that his top sponsors will leave his side. Still, the companies involved have a troubling moral dimension to consider: If it does ever start to look like Stewart lost his cool, or simply acted recklessly, before running down Ward, they won’t just be responsible for supporting him financially. They’ll be responsible for keeping him on the track.

Aug. 11 2014 5:36 PM

Watch John Oliver Sing “The Circle of Debt” to Explain Predatory Lending

In his latest Last Week Tonight monologue, John Oliver takes on the multibillion-dollar payday-loan industry. These high-interest, unforgiving loans are a huge business in the U.S., where roughly one in five households has resorted to them. (At times, payday loan storefronts have outnumbered those of McDonald's and Starbucks combined.)

Payday loans are designed to ensnare borrowers in a perpetual cycle of debt. Oliver calls them the Lay's potato chips of finance—"You can't have just one and they're terrible for you!"—with lenders dodging regulation at all costs. "It's the circle of debt," he sings to the familiar Lion King tune, "and it screws us all." Check out the full clip below.

Aug. 11 2014 3:07 PM

The Laughable Claim That the NCAA Wants to Protect Athletes From “Commercial Exploitation”

Fans of college sports who would like to see the players paid but think that doing so could be difficult for many schools will sometimes offer up a Solomonic compromise: Instead of compensating athletes directly, let them sign endorsement deals. It’s free for the schools and lets players profit off of their commercial worth. Win-win.

The ruling that Judge Claudia Wilken handed down late Friday in Ed O’Bannon’s antitrust suit against the NCAA could also be described as Solomonic. For the plaintiffs, the goal of the O’Bannon suit was to allow players to be paid for the use of their images in broadcasts and video games. Wilken’s decision will make that possible—the NCAA now cannot ban schools from offering larger scholarships or setting up trust funds for their athletes to pay them once their playing days are done. However, Wilken ruled that the NCAA can limit the extra money to a mere $5,000 per athlete per year.

The decision was a historic win for players that makes mincemeat of most of the NCAA’s legal and economic arguments for “amateurism” in college sports. Yet it leaves the status quo mostly unscathed. Baby, split.

But one fascinating, and somewhat infuriating, aspect of the ruling is that it rules out the classic compromise position of endorsement deals. Wilken seems to have bought into the NCAA’s argument that doing so would undermine its ability to “protect” players from “commercial exploitation.” Here’s the language, which was apparently written with a straight face:

Allowing student-athletes to endorse commercial products would undermine the efforts of both the NCAA and its member schools to protect against the "commercial exploitation" of student-athletes. Although the trial record contains evidence—and [NCAA President Mark Emmert] himself acknowledged—that the NCAA has not always succeeded in protecting student-athletes from commercial exploitation, this failure does not justify expanding opportunities for commercial exploitation of student-athletes in the future.

In the history of ironic legal fictions, this has to be one of the most transparent. The problem isn’t that the NCAA has failed to protect players in the past. It’s that the entire endeavor of big-time college sports is, inherently, about commercial exploitation. You cannot separate the two, except in the most willfully oblivious, legalistic way possible.

The NCAA is a noncommercial entity in only the hollowest possible sense of the word. Yes, it’s a nonprofit organizing body. It still generates nearly $1 billion per year in revenue. Yes, the schools fielding teams are not-for-profit endeavors. They still participate in a business that is, for many schools, massively lucrative while handing $1 million paydays to coaches and athletic directors.

Of course, nobody involved in college sports feels the apparent need to protect athletes from the commercial predations of, oh, CBS or ESPN. But apparently it is essential to the NCAA’s mission to keep players from doing TV spots for their local car dealers.

Aug. 11 2014 3:00 PM

What Makes BuzzFeed Worth $850 Million?

BuzzFeed, the site that gave us "29 Cats Who Failed So Hard They Won" and "The 50 Cutest Things That Ever Happened," announced on Sunday a new $50 million funding round from venture capital firm Andreessen Horowitz that values it at around $850 million. The series E financing easily eclipses BuzzFeed's four previous investments, which totaled $46.3 million, and the near-billion-dollar valuation makes each of its 550 employees worth about three times that of a staffer at the New York Times.

With its new cash infusion, BuzzFeed said it is planning a major expansion. The editorial team will break into three divisions—News, Buzz, and Life—and the video section will expand its work on everything from GIFs to Hollywood-caliber films under the umbrella of BuzzFeed Motion Pictures. A newly created division called BuzzFeed Distributed will focus on creating original content for social platforms like Snapchat, Tumblr, and Instagram.

What makes BuzzFeed worth $850 million to investors? Chris Dixon, a partner at Andreessen Horowitz and now a member of BuzzFeed's board, explains some of the firm's thinking on his blog:

Many of today’s great media companies were built on top of emerging technologies. Examples include Time Inc. which was built on color printing, CBS which was built on radio, and Viacom which was built on cable TV. We’re presently in the midst of a major technological shift in which, increasingly, news and entertainment are being distributed on social networks and consumed on mobile devices. We believe BuzzFeed will emerge from this period as a preeminent media company.

Dixon sees BuzzFeed as a "full stack startup"—focused on building its own software, marketing, sales, content, and so on, instead of licensing out its technology to an existing company. Tesla, Netflix, and Uber are also like this. And so in Dixon's estimation, BuzzFeed isn't really a media company at all:

BuzzFeed has technology at its core. Its 100+ person tech team has created world-class systems for analytics, advertising, and content management. Engineers are 1st class citizens. Everything is built for mobile devices from the outset. Internet native formats like lists, tweets, pins, animated GIFs, etc. are treated as equals to older formats like photos, videos, and long form essays. BuzzFeed takes the internet and computer science seriously.

That Dixon feels this way is a coup for BuzzFeed, which has walked a fine line between new-media platform and technology-first startup. Vox, the explanatory journalism project of Ezra Klein that trumpeted its modern content management platform, is attempting a similar balancing act. Of course, tech savvy and media chops aren't mutually exclusive. The trick has been convincing Silicon Valley investors that a smarter digital platform still needs people running it.

“It wasn’t easy raising money in the early days of BuzzFeed,” Jonah Peretti, BuzzFeed's founder, said during a lengthy interview in June with Felix Salmon. “It was always, ‘Is there any way you can do this without having any writers or content creators or journalists? Can you make this automatic? Could you detect what was trending and then grab stuff from other places and turn it into an article synthetically where the cost of content creation would be zero?”

For Peretti to keep the process in human hands, he's needed to show that BuzzFeed editors and writers can consistently manufacture compelling and shareable content; BuzzFeed has relied heavily on analytics to figure out what works and what doesn't. Yet at the end of the day, Peretti says content is driven by something computers can't replace—creativity. "We have lots of meetings with five or six people sitting in a room brainstorming about what they could create," he told Salmon. "None of that is directly tied to any metrics."

Proving the added value of those content creators has also hinged on BuzzFeed's ability to reliably produce viral content. Peretti has spent the better part of his life analyzing what makes something viral. His first brush with viral—before that was even a term people tossed around—was when an email exchange with Nike blew up online and landed him on the Today Show with Katie Couric. After several other one-off successes in that vein, he jumped over to co-found early SEO master the Huffington Post. BuzzFeed was initially conceived of as a small viral lab for running content experiments; now it draws 150 million average monthly viewers.

Despite his experience, it's unclear whether Peretti has cracked the code on viral or if creating that kind of content will always be somewhat like trying to trap lightning in a bottle. But that might explain why BuzzFeed is so eager to expand its offerings and delve into new media formats: While hanging onto viral, it also wants to move beyond it. "Part of the idea of BuzzFeed from the beginning was can we get to the point where the platform is more valuable than the expertise?" Peretti told Salmon. "If you actually have an idea or an insight into how things are shared or why they're shared or what works, can you build that into either the technology platform or the data science or the culture of a team of people?" With Peretti at the helm, Andreessen Horowitz is betting the answer is yes.

Aug. 9 2014 11:47 AM

Amazon Invokes Orwell in Latest Stab at Hachette

Amazon has a new target in its ongoing war with publisher Hachette: that book-hating, totalitarian, anti-democratic English author George Orwell.

Sometime between Friday evening and Saturday morning, Amazon unveiled a new message from its book team to readers. Published at the Web address "Readers United," the letter encourages readers to email Hachette CEO Michael Pietsch (contact info provided) to complain about high e-book prices. Should readers have nothing in particular to say to Pietsch, Amazon suggests a few friendly talking points. (First up: "We have noted your illegal collusion.") But before it gets to those recommendations, the company gives a short history lesson:

Just ahead of World War II, there was a radical invention that shook the foundations of book publishing. It was the paperback book. This was a time when movie tickets cost 10 or 20 cents, and books cost $2.50. The new paperback cost 25 cents—it was ten times cheaper. Readers loved the paperback and millions of copies were sold in just the first year.

Did the literary establishment embrace this? Absolutely not! Amazon says.

Instead, they dug in and circled the wagons. They believed low cost paperbacks would destroy literary culture and harm the industry (not to mention their own bank accounts). Many bookstores refused to stock them. ... The famous author George Orwell came out publicly and said about the new paperback format, if "publishers had any sense, they would combine against them and suppress them." Yes, George Orwell was suggesting collusion.

It continues to invoke Orwell throughout the letter. "Perhaps channeling Orwell's decades old suggestion, Hachette has already been caught illegally colluding with its competitors to raise e-book prices," Amazon writes. And later on: "It was never in George Orwell's interest to suppress paperback books—he was wrong about that."

Amazon's economic argument, as it has stated before, is that e-books are highly price-elastic. This means that when the price of e-books falls, consumers as a whole purchase more of them. Amazon wants to sell most e-books at $9.99 instead of the $14.99 and $19.99 price points they sometimes carry. The company believes that reducing prices to $9.99 would allow customers to pay less while leading to a 74 percent increase in e-book sales, which would create more royalties for authors. "The lower price is good for all parties involved," Amazon says. "The pie is simply bigger."

The company does have a point about price elasticity—when Walmart began selling Hachette titles for 40 percent off in June, it saw sales of physical books rise 70 percent in just four days. Independent bookstores that offered discounts on Hachette books have also seen sales and foot traffic increase. On the other hand, Amazon's argument that this is good for authors seems to assume that the pie will grow for each e-book and not simply in the aggregate. Sure, slashing the cost of a bestseller might cause sales to jump 74 percent, but will it do the same for a new author, or an academic with a relatively small and specialized audience?

Economic debates aside, one thing Amazon is almost certainly incorrect on is its reading of Orwell. As David Streitfeld notes at the New York Times, some quick Googling reveals a fuller text of Orwell's comments on the paperback—and with it, a more nuanced view of his opinion. "The Penguin Books are splendid value for sixpence," Orwell wrote, "so splendid that if the other publishers had any sense they would combine against them and suppress them." Translation: Paperbacks are great! So great that they might drive publishers who don't make them out of business!

But Orwell also had his concerns. "It is, of course, a great mistake to imagine that cheap books are good for the book trade," he wrote. "Actually it is just the other way about. If you have, for instance, five shillings to spend and the normal price of a book is half-a-crown, you are quite likely to spend your whole five shillings on two books. But if books are six-pence each you are not going to buy ten of them, because you don't want as many as ten; your saturation point will have been reached long before that." He went on to conclude: "In my capacity as reader I applaud the Penguin Books; in my capacity as writer I pronounce them anathema."

This, in a sense, is what the debate has hinged on all along: that lower e-book prices are good for readers but more dangerous for authors. Orwell surely didn't hate the paperback. Nor would he have said the consequences of cutting e-book prices are as simple as Amazon would have its readers believe.

Aug. 8 2014 5:17 PM

Southwest Airlines Has a Huge Lateness Problem

If you want your flight to arrive on time, you might not want to take Southwest. Its planes were on time just 67.6 percent of the time in June—the third-worst rate among U.S. air carriers—according to the recently released June Air Travel Consumer Report. Regional airline Envoy (formerly American Eagle Airlines) and ExpressJet were the only two that performed worse in that category, with on-time rates of 62.2 percent and 65.1 percent, respectively.

Southwest has been struggling to turn around its chronically late flights for a while. June was a particularly bad month for its timeliness; over the past 12 months, 71.8 percent of Southwest flights were on time. Of course, that's still not nearly as good as Delta (82.7 percent of flights on time in the past year) or the current gold standard, Hawaiian Airlines (93.6 percent on time in the past year). Businessweek traces the tardiness to last August, when Southwest overhauled its aircraft turnaround and flight times to pack more flights into peak travel hours. It worked—in a sense. Demand soared and customers flooded Southwest planes. But the company wasn't well-equipped to handle the surge, and so its timeliness fell.

Most of Southwest's delays in June came from late-arriving aircrafts. Delays for Envoy and ExpressJet, on the other hand, were split more evenly between late-arriving aircrafts and so-called National Aviation System delays—a broad category of issues that aren't really in the airline's control. What else makes airlines late? The report breaks down the most common causes in a nice pie chart:

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Screenshot from the Air Travel Consumer Report

Other fun stats to inform your travels: Envoy had by far the most mishandled baggage reports filed per 1,000 passengers over the past six months, while Virgin America had hardly any. JetBlue and Virgin America are also among the least likely to bump passengers from an oversold flight (not surprising, since they routinely top rankings of airline customer satisfaction). Finally, Spirit Airlines got the biggest number of complaints in June, at 235. But we already knew that everyone hates Spirit.

Aug. 8 2014 4:25 PM

Will Millennials Be the Tiny-House Generation?

At the moment, millennials are a generation of renters. Part of the reason is obvious: Money’s tight and houses are expensive. But some—myself and the Atlantic’s Derek Thompson included—have wondered if there might be a cultural component to our apparent aversion to homeownership as well, given that we’ve gotten our start in adulthood post–housing bust.

The below graph is from a newly released Federal Reserve survey about America’s overall economic well-being, which asked renters why they didn’t buy a home. Among 18-to-29-year-olds, the most popular answer by far (49 percent) was that they couldn’t afford a down payment. A plan to move soon was the second-most popular reason, with 29 percent mentioning it. Meanwhile, 24 percent said they couldn’t qualify for a mortgage. Only 14 percent said they actually preferred renting to the idea of owning. Finances really are the big issue.

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These results are both obvious and meaningful: There are a vast number of young people who would purchase real estate if they could find something within their price range. Real estate developers are already building smaller, less expensive houses in order to cater to millennial budgets. It’s possible that we’ll end up as the generation that shrinks the American home back down to size—not out of desire, but necessity.

Aug. 8 2014 4:14 PM

Puerto Ricans Are Fleeing the Economic Disaster That Is Their Home Island

Puerto Rico is a slow-rolling economic wreck. The island’s unemployment rate is around 13.1 percent. Poverty is around 45 percent. And it’s buried in debt.

To top that all off, it’s shrinking. In a new report, the Federal Reserve Bank of New York tracks Puerto Rico’s ongoing population decline. Over nine years, the number of residents has dwindled by 5.5 percent, thanks in part to falling birthrates but mostly to migration. While that kind of dip has occurred in a few U.S. states before, it’s still a rather stark symbol of how dire the situation on the island has become. Worse yet, the exodus has been speeding up in recent years. "Nearly one-third of those born in Puerto Rico live on the U.S. mainland,” the report notes.

shrinking

So who’s leaving the island? The emigrant class is disproportionately made up of young people without college degrees, which means, oddly, that migration is raising the overall level of education among those left on the island. But that’s cold comfort. Population declines can be a symptom of economic malaise. They also perpetuate that malaise by shrinking tax rolls and killing growth, which is pretty much the last thing a small, semi-autonomous island needs when it's struggling to pay back creditors.

Aug. 8 2014 1:18 PM

Amazon Appoints Self as Sales Rep for Google Shopping Express

This morning I received my first-ever copy of a James Patterson novel. Along Came a Spider arrived at Slate's New York office at 10:11 a.m. in a crisp white package via Google Shopping Express, which announced on Thursday that it had teamed up with Barnes & Noble to offer same-day delivery of books from local stores in Manhattan, West Los Angeles, and the San Francisco Bay Area. (Confession: I have never read a James Patterson book, but was advised that this one must be pretty good since it was made into a movie starring Morgan Freeman.)

It's important to note that this mass-market paperback copy of Along Came a Spider is not just a mass-market paperback copy of Along Came a Spider. It is also an emblem of the ongoing dispute between Amazon and publisher Hachette—and of the tremendous business opportunity that the feud has presented for other companies trying to break into the e-commerce and rapid-delivery space.

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The ware.

Photo by Alison Griswold

Amazon, you might recall, is fighting an all-out war with Hachette. The "Everything Store" wants to get a 30 percent cut of sales and to sell most e-books for $9.99. In an attempt to squeeze compliance out of Hachette, Amazon is selling many of its titles at full price, eliminating preorders on upcoming Hachette books, and delaying shipments by several weeks. Authors—published by Hachette and otherwise—have responded to the sanctions with outrage and 909 of them signed a letter condemning Amazon's negotiating tactics that will run as a full-page ad in the New York Times on Sunday.

Retailers have had their own response to the dispute: They've lowered Hachette book prices. Walmart and Barnes & Noble slashed the cost of titles in June, and at Walmart, sales of physical books rose 70 percent in four days. Independent bookstores announced similar discounts and were rewarded with increases in sales and foot traffic. Google is the latest to jump on that bandwagon through its partnership with Barnes & Noble. Google Shopping Express, the company's same-day delivery service, launched in Manhattan in May and has already been working with big-box stores such as Costco, Walgreens, and Staples. By adding Barnes & Noble, it's making a concrete push into the book-delivery business that Amazon has long dominated. And if Google can get Amazon customers to buy books on Shopping Express, maybe they'll switch to its service for other items as well.

Google Shopping Express has its flaws. When I tried to sign up yesterday, I got repeated error messages and had to consult customer service twice before it started to work. ("How frustrating—that's very bizarre," one online technician commented, after I explained that I couldn't add an address to the "Deliver to" field.) On the other hand, once my account got hooked up, the process was totally smooth. I placed the order at 7 p.m. on Thursday for delivery between 9 a.m. and 1 p.m. on Friday, and Along Came a Spider came along to my office just an hour into that window. That's fast service for anything—and for a Hachette title, it's way faster than the one to three weeks Amazon is promising.

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