I really think Amazon should go out and buy acquire Best Buy right now…..And timing of this is critical…
1. Being a brick and mortar (right) now is extremely hard because, partly because of a competitive disadvantage of sales tax. I think no sales tax is one of the reasons Amazon is successful (among others). But that advantage very well might come to an end in 2-4 years (at least it will take awhile for Fed to make any ruling on it).
2. Best Buy is on life support right now… However, if Best Buy can survive for the next 2-3 years, and the internet sales tax thing does kick in more states, Amazon may not be as compelling before simply because all else being equal, people would rather see it, touch it, and take it home right away if the price is virtually the same, and I think Best Buy might actually grow stronger again if it survives because you’ll see a shift back into brick and mortar companies. By acquiring it now, it’s cheaper and it’s one less competitor to deal with in the future.
3. Amazon can restructure/reinvent the Best Buy stores to be similar to how Apple makes its Apple stores. Get more people to buy it’s online services and online devices, by offering services locally in house. Handle exchanges and returns. Possibly cut down on shipping expenses, etc…
4. If the fed ends up passing laws that takes away an sort of internet sales tax, it will take some time..When that happens, Amazon can sell or spin off Best Buy again into a separate company..It will get a much better price than it paid because under the Amazon management, perhaps it would be more profitable..And if the internet sales tax thing is settled by the fed, Best Buy as a spinoff would again be at a competitive disadvantage versus Amazon.com….
