Amazon and Wal-Mart Don’t Want to Share the Web

A front-page story in today's New York Times details the swelling rivalry between Amazon (AMZN) and Wal-Mart (WMT). This may seem odd because, in reality, the retailers are fundamentally different. Wal-Mart is rooted in its big-box retail stores, and Amazon operates only online. But that hasn’t stopped them from engaging a heated competition for overlapping customers. As Wal-Mart is stepping up its online offerings, Amazon has found itself on the defensive. The paper explains, “In what is emerging as one of the main story lines of the 2009 post-recession shopping season, the two heavyweight retailers are waging an online price war that is spreading through product areas like books, movies, toys and electronics.”

Nearly a quarter of U.S. homeowners are stuck “under water” on payments.  In other words, they “owe more on their mortgages than the properties are worth” the Wall Street Journal reports. This does not bode well for the state of the housing market, as more homes nearing foreclosure means that more properties will likely “get dumped into an already saturated market.” Citing a recent report, the paper says, “Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home's value.” In other real estate news, today’s lead business story in Washington Post starts out on a good note. It points out a “clear uptick in the housing market” signaled by the strongest monthly sales of existing single-family homes, townhomes and condominiums since February 2007. Not so fast, though. There’s a “catch,” the paper says: The first-time home buyer tax credit encouraged the recent rush to buy, so “real doubts linger about whether these gains can be maintained, especially if unemployment continues to rise and government intervention is curtailed.”

The Wall Street Journal takes a step back and examines the ever-thorny relationship between American International Group (AIG) and the federal government. The latest issue, which brings the notorious bailed out insurer back into the news, is whether or not its top employees’ compensation should be restricted in 2010. The firm is 80% government-owned, so ultimately, what hurts AIG, in some ways hurts US tax payers. Thus, the pay czar’s proposed pay limit, which could scare away top performing employees, might not actually be a great idea. The paper explains, “Fed and Treasury officials told Mr. Feinberg that tough restrictions could ultimately jeopardize the government's ability to recoup its roughly $90 billion in loans because key employees would leave. Unlike other firms subject to Mr. Feinberg's review, AIG isn't expected to pay back the government's investment for several years, making it subject to the pay czar's rulings for the foreseeable future.”

The New York Times reports that the Wall Street Journal’s parent company, News Corp. (NWS) is considering striking a deal with Microsoft (MSFT) that would make it impossible for readers to search for its content on Google (GOOG). The article says, “Microsoft has been in early discussions with the News Corporation, the media conglomerate controlled by Rupert Murdoch, about a pact to pay the News Corporation to remove links to its news content from Google’s search engine and display them exclusively on Bing, from Microsoft, according to a person briefed on the matter who spoke anonymously because of the confidential negotiations.” The deal could be a risky move for the media company, but if it ends up working out, it could lead other publications to follow and “start picking sides” between the search engines.

To the dismay of parents across the country yesterday, 2.1 million cribs were declared unsafe for use and recalled. The New York Times called it “the largest recall ever of cribs” which it says “comes amid growing concern about the safety of drop-side cribs, in which the crib’s side gate slides up and down.” The Consumer Product Safety Commission, which made the announcement, has told parents to “immediately stop using the recalled cribs, wait for the free repair kit, and do not attempt to fix the cribs without the kit.”

And finally, Ketchup company Heinz (HNZ) is increasingly looking south of the border to boost sales, the Wall Street Journal reports. Since 2007, the company has been focusing on building its presence in Mexico, in an attempt to meet a growing demand for the condiment. The popularity of the product mirrors a global trend of "surging" packaged-food sales in developing countries.  As the paper explains, “Mexicans eat more ketchup by sales value than consumers in all but eight other countries. Many of them slather the thick red sauce on chicken, pasta and eggs—even pizza.”