Gone Baby Gone

Hi, today we explore: (1) Google ads are still huge for Alphabet, (2) Global fertility rates are down, (3) Nestlé sales are struggling. Good morning! The sails on top of Paris’s iconic [Moulin Rouge]( cabaret venue collapsed yesterday — for the first time in its 135-year history. Today we're exploring: - All ads up: Google search ads are still huge for Alphabet. - Ill-conceived: Birth rates are down around the world. - Packaged portfolio: Nestlé's expansive family of brands. Have feedback for us? Just hit reply — we'd love to hear from you! Alphabet arguably posted the pick of the big tech earnings yesterday, reporting more than $80bn in revenue and a record $25.5bn in operating income. What really got investors going, however, was the news that the company would pay its first-ever dividend alongside a $70bn share buyback plan, sending shares up more than 10% and taking Alphabet into the coveted $2 trillion [market cap club](. Reports of the death of Google Search… … might be exaggerated. Or, at least, early. In recent years, a number of articles — including a particularly [sharp one]( from Ed Zitron just this week — have outlined the demise of Google Search. While it may be harder than ever to find what you’re looking for on Google, that hasn’t translated into any discernible impact on the search giant's bottom line (yet). The search engine raked in over $46bn in ad sales in Q1 alone... translating to ~$20m of revenue every hour. Plugging more sponsored results at the top of the Google search bar might make for a worse user experience, but, for now, it also means more money for the company, which is spending a fortune on staying competitive in the AI race. Indeed, the cherry on top was the stellar performance of [Google Cloud]( which as a division tripled its operating profit, boosted by a rise in demand for all-things-AI (server infrastructure etc). Why the company has decided to start paying a dividend now is somewhat curious. Maybe it’s run out of suitable ideas to invest that money into… or maybe it’s just so profitable it can do both: pay a dividend and invest for the future. [Read this on the web instead]( Conceived notion New [provisional data]( released yesterday by the CDC outlined another drop in US births, as the total fertility rate fell from 1.66 births per woman in 2022 to 1.62 last year — equivalent to about 3.6 million births, less than any year since 1979, and the lowest rate recorded since tracking began in the 1930s. America’s fertility rate peaked at ~3.7 births per woman during a baby boom in the late ‘50s so substantial that it became the moniker of an entire generation. It dropped sharply in the 1960s and 70s, before picking back up. In 2007, it reached 2.1 for the last time — the birth rate required for the natural population to replace itself from one generation to the next (theoretically). And, America’s not alone in its baby bust. On a global scale, fertility is [falling fast](. The global rate has roughly halved over the past 50 years to ~2.3 births per woman, and it’s a trend that cuts across cultures, language, and incomes. Just this week, the Korea Times [reported]( that births in South Korea, which has the widest gender pay gap of any OECD country, had dropped below 20,000 in February — the first time that threshold had been breached, despite its government spending ~$280bn on [child-rearing incentives](. In Italy, there are now [12 deaths]( for every 7 births in the nation. The population of China, once-famed for its one-child policy, is now also shrinking. Although throwing money at a fertility shortfall might temper the trend in the short term, it fails to address some of the longer-term factors. Unequal labor divides within households, the rising cost of raising a child, increasing access to contraception, economic insecurity, lowering male fertility rates, and a desire to delay starting a family have all been posited as reasons for the declines. Related reading: Teen birth rates plunge 78% since peaking [in 1991](. [Read this on the web instead]( A tale of 2 customers Nestlé, the world’s largest food company, is struggling. When we talk about Nestlé, it’s usually tricky to pin down one reason for its performance considering that the conglomerate has a sprawling portfolio of 2,000+ brands, selling everything from cat food to candy. If some brands are doing poorly, others are typically doing well, and vice versa. But in Q1, the Swiss-based packaged food giant reported a 6% decline in revenue. That was partially due to currency fluctuations, but also a very real deterioration in its North American region, where [consumer demand waned]( for its frozen pizza and snack brands. According to the company’s own metric known as “real internal growth” — essentially a measure of the volume of products that the company sells — sales volumes fell at 6 out of the 7 divisions in Q1. Its “prepared dishes & cooking aids” division fared worst of all, with volumes dropping 6.5%, offset slightly by price rises of 2.3%. That was a theme seen across the board: price rises were one of the only thing keeping Nestlé’s sales figures up across the board. For the company as a whole, volumes dropped 2%, prices went up 3.4%, and organic growth came out at 1.4%. Weary of inflation, consumers seem to be splitting into two factions, according to [Nestle’s CEO](. Many seem to want to splurge on premium products, while others want the best value possible for their buck, with fewer interested in mid-priced brands. [Read this on the web instead]( More Data • Ford’s [electric vehicle unit]( just posted a $1.3bn loss for its most recent quarter — or, a $132k deficit for every EV it sold in the first 3 months of the year. • A new report from [Pew Research]( reveals that, despite a growing share of Americans believing that crime rates are increasing in the US, a dramatic 49% decline in violent crime was observed over the last 2 decades. • What’s going on with the production numbers for [Apple’s Vision Pro]( • Southwest is still dealing with the fallout of Boeing’s costly [door-plug fiasco]( the airline, which only flies the manufacturer’s 737 planes, is now shutting down operations at 4 airports. • Splitting hares: How Rabbit’s new r1 companion stacks up in the [AI tech space](. Hi-Viz • See which cities are the best at [attracting talent](. Off the charts: The CEO of Norway's wealth fund recently claimed Americans "[just work harder]( than Europeans, but which 2 nations are putting in the most and least hours at work each year? [Answer below.] [Answer here](. Thanks for stopping by! Have some [feedback](mailto:daily@chartr.co?subject=Feedback&body=Hi%2C%0A%0AI%20like%20the%20newsletters%2C%20but%20I%20had%20a%20thought%20for%20you...) or want to [sponsor]( newsletter](mailto:james@sherwoodmedia.com?subject=Chartr%20NL%20Sponsorship%20Enquiry%20)? Not a subscriber? Sign up for free below. [Subscribe]( Copyright © 2024 CHARTR LIMITED, All rights reserved. You are receiving this email because you opted in via our website. Our mailing address is: CHARTR LIMITED 231 Vauxhall Bridge RoadLondon, SW1V 1AD United Kingdom [Add us to your address book]( Don't want charts in your inbox anymore? Break our hearts and [unsubscribe](. [Privacy Policy](