Blockbuster + Circuit City = 3?

April 14, 2008

blockbuster-ceo-jim-keyes.jpgEyeing the disintegration of its brick and mortar rental business, Blockbuster offered to buy electronics retailer Circuit City for $6 a share, the rental giant revealed on Monday.

But will one plus one equal three? Putting together two struggling companies have rarely been a good idea.

The bid shouldn’t be a surprise, however. For months, Blockbuster CEO James Keyes has aimed to invest more heavily in its stores by adding more merchandise including entertainment electronics while pulling back on competing with online rental service Netflix.

The new Blockbuster sees itself as a one-stop shop for all media entertainment needs, from content to devices. We know of one other company that has pulled this off quite profitably. But the comparison with Apple, which controls every aspect of the supply chain, from device design to consumer pricing at its digital store, doesn’t quite apply here.


Keep an eye on:

  • CBS Interactive to open Menlo Park outpost, amid fears digital revenue won’t offset lost traditional media revenue for years to come. (paidContent) (NYT )
  • AOL lands biggest ad deal since creation of Platform A with Verizon. (Reuters)
  • Some mysterious guy is snapping up all the copies of “My Wall Street Journal” parody from a Los Angeles newsstand. (NYT )
  • Microsoft will probably stick with its own options for Yahoo. (Reuters)
  • Antitrust bar is higher in any deal with Yahoo that involves Google. (Reuters )

(Photo: Reuters / Blockbuster CEO James Keyes at the 2007 Reuters Media Summit)

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[…] seem to be introducing another problem to its own woes.” Reuter’s DealZone remarks that “putting together two struggling companies have rarely been a good idea.” DealZone also looks at the […]

Posted by Deal Journal – : Afternoon Reading: A Blockbuster of a Deal? | Report as abusive

The 10Q Detective opines that BBI’s play for the electronic gadgets retailer was an effort to turn Street attention away from its own business failings—and, a last-ditch effort to revive a moribund brick& mortar business model.

Does anyone remember the RadioShack – Blockbuster alliance? In June 2001, 130 “RadioShack Cool Things” boutiques opened in Blockbuster outlets–six months later BBI pulled the plug on the ‘pilot program.’

Is BBI is headed for bankruptcy?  /circuit-city-should-remind-blockbuster .html

Posted by david j phillips | Report as abusive