26th
More thoughts on the auto industry
Image by Getty Images via Daylife
I was just looking at the automakers stocks, GM’s market cap is $6.74 billion. Crazy idea (I know this would never happen) have Microsoft buy GM. Why would they do this, for 2 reasons. The first is that one of the largest un-tapped markets for software is the car. Owning the largest manufacturer of cars globally gives you great distribution and leverage at building the best software for the car and getting it into consumers hands.
Also Microsoft could use its tech savvy to help push GM into being a leader of alternative fuel and higher MPG cars. We have already seen what Tesla has done with a little Bay Area mojo. There is going to be a continued huge opportunity for automakers as the world’s drivers switch from low MPG’s to higher MPG cars, the only way to do this is through buying new cars.
So lets say they buy the company for $10 billion (with the rumors of bankruptcy they might be able to get it even cheaper) and they invest an additional $10 billion into the company. They already have a lot of investment in automotive innovation so most of this will be for management reorganization and investment in R&D for alternative fuel and higher MPG cars.
If Microsoft did this they would end up having control of a significant share of a consumers access to Internet etc. As time goes forward with better technology in the car and cheaper wireless Internet, I am sure that a percentage of search will happen from the car as one example. Product integration for mobile, gaming, software, etc., could all be done which would assist all of their other divisions. And the best thing is they would then control a portion of the consumer that Google would not have access to.
Will not happen but would be cool if the largest Software company saved itself from Googledoom by buying a very old manufacturing business for a total investment of $20 billion less then what they would have spent on Yahoo.
