Archive for May, 2011
San Francisco loses last domestic car dealership
May 11th
The San Francisco Chronicle reports that the Golden Gate City has lost its last domestic car dealer. Since San Francisco Ford Lincoln Mercury closed last week, the city lacks a single Ford/Lincoln, GM/Chevy/Buick/Cadillac, or Chrysler/Dodge/Jeep dealer in its 47.6 square mile territory. The dealer’s original owner returned its franchise three years ago to Ford, which has been running the shop since. Ford Lincoln Mercury president Mel Turner said that when Ford’s attempts to sell the dealer fell through, the company had to make a “very tough decision” to close its doors in San Francisco.
While Ford is recovering nationally, with a new set of globally-competitive models that are selling well and boast higher quality almost at par with Japanese rivals, San Francisco car buyers don’t seem to have caught on. Mike Hollywood, a sales manager at Ellis Brooks Chevrolet — a seven-story, 195,000 square foot facility that stop selling Chevrolets 2.5 years ago and will soon become a flagship Nissan/Infiniti dealer — said, “People in San Francisco just weren’t buying Cadillac Escalades. You can’t even park them in the parking structures here.”
Meanwhile, dealers of import brands, from Audi to Toyota, Scion, Honda, VW, Mazda, BMW, and Mercedes are doing great business just down the road from the former Ford dealer. Dennis Fitzpatrick, regional VP of the California New Car Dealers Association, said “It’s a tough market. Imports have a much bigger share in San Francisco. ”When you can sell 100 imports a month as opposed to 25 domestic, and what with the rents and real estate, it’s tough to make a U.S. car dealership pencil.”
Source: San Francisco Chronicle
Charger owner beheads robot in new Dodge ad
May 11th
Dodge’s recent ads depict people taking back control of their driving experience from computers, and the latest spot for the Charger follows in the same pattern. The sedan ironically no longer offers a manual transmission, but the ad is simple and works well. A passive owner literally rips the head off of a nanny driver robot and channels a streak of irresponsibility, driving the HEMI-powered gas guzzler through town like a madman. As in all of Dodge’s ads, the spot is narrated by a calm, deep male voice meant to appeal to Dodge’s target audience, which is almost exclusively male.
Ad video after the break.
Microsoft buys Skype for $8.5 billion
May 10th
Announcing the largest deal in its 36 year history, Microsoft said earlier today that it would acquire internet telephony firm Skype for $8.5 billion, all-cash. The Redmond software giant will integrate Skype into Xbox, Kinect, and Windows Phone, along with its Outlook/Lync/Exchange enterprise platform. The company is investing heavily in mobile technology, and integrating the world’s most popular VoIP voice/video chat service should give that effort a shot in the arm, while also further extending the company’s enterprise leadership. Microsoft says Skype users who don’t run Windows or Windows Phone shouldn’t worry, as it will continue to “to invest in and support Skype clients on non-Microsoft platforms.”
Skype’s current CEO, Tony Bates, will head the new Microsoft Skype Division, reporting directly to Microsoft CEO Steve Ballmer. Skype boasts 663 million users worldwide, and its users made 207 billion minutes of voice and video calls last year. Most of these calls, however, were free, which has made it difficult for the company to make money since it was founded in 2003.
Rumors swirled over the last few weeks that Google was looking to buy Skype, but an IPO was the most likely option, so Microsoft’s offer had to be high enough to convice Skype shareholders that life in the Microsoft fold would be better– hence the hefty price premium. Microsoft is an investor in Facebook, which may now be able to tap into Skype’s network via Microsoft. Apple appears to be building massive server capacity to make a big telecommunications play (perhaps by extending its current FaceTime video chat service), and Google of course has its Google Voice service, so we’re likely to see a three-way internet telecom battle between the Microsoft-Skype-Facebook combine, Apple, and Google.
eBay first bought Skype in 2005 for $2.5 billion, but having found little potential for synergies, it sold off most of the company to an investment group led by Silver Lake in 2009 at a valuation of $2.75 billion. Microsoft’s purchase price today is over three times that. With this deal, Skype will gain a permanent home and likely a central role in Microsoft’s bid to gain prominence in Internet services and the mobile arena. Microsoft has an estimated $48 billion in cash reserves, and the Skype deal would be its largest deal in 36 years. The operating system giant’s last big-ticket acquisition was its $6 billion purchase of online ad firm aQuantive in 2007. The Skype deal has been approved by both companies’ boards of directors and is expected to close by the end of the year.
Press release after the break.
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