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Business China

CompUSA, Dell, TV-Guide and NetEase

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Week in review Dec 2 to Dec 8

1) All remaining CompUSA stores to be closed (bloomberg). I think it’s understandable from business point of view, because selling computer is a tough business these days. It is a commodity business, and unlike other commodity such as gas or coffee, a customer only buy a new PC/laptop once every a few years.

Similarly, I can understand Dell computer lackluster financial performance lately, and its decision to sell PCs at BestBuy (reuter news). People used to buy Dell because it offers most bang (more disk and memory, faster CPU, etc) for the buck, but nowadays people buy computer and electronics not solely for the “bangs”, they look for the brand, design, fashion (think Apple iBook, MacBook).

2) MacroVision (MVSN), the licensing software company, announced to buy GemStar-TV Guide (San Jose Mercury News). Normally when company A buys company B, the company A stock will drop, and company B stock will rise. In this case, interestingly, both companies’ stock drop big. I, for one, can not understand why a software company will buy a traditional magazine company.