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The Roundup June 5

He can sell cars, but can he make ‘em, too? I’ll betcha a hundred he can — better than GM, in fact.

General Motors Corp. this morning announced a tentative deal for renowned Detroit businessman Roger Penske to acquire GM’s struggling Saturn brand and distribution network. . . .

Saturn will be wholly owned by the Penske Automotive Group. Penske said he hopes retired Chrysler President Tom LaSorda, who was advising Penske on the deal, will have a role with the company. . . .

“The only real value in Saturn, frankly, is that distribution network. There is no discrete plant, there is no discrete model,” said Aaron Bragman, an industry analyst with IHS Global Insight.

(“GM, Penske reach tentative agreement for Saturn brand,” Detroit Free Press, June 5) Just a short cruise down any automotive lane will turn up two or three Penske this-or-thats and, if you’re lucky, a Penske leased truck will go cruising by. You may never have heard of him, but you’ve heard his last name daily for the past decade or so because Roger Penske is a legend at acquiring and turning around companies. This sale, in my opinion, is bad news for GM. Sure, they’ve sloughed off an underperforming brand, but they just handed it to the one man and one business organization that can turn it into a world-class, highly competitive brand — and, in the process, erode GM sales further. Add to the mix what is considered the best and most responsive car dealerships in American (the Saturn dealerships) that are the ones who set the standards of customer service rather than follow distantly (like all other dealers), and you have a whoppingly powerful business model for developing cars that people want to buy.

The sound of number two.

Data from monitoring service StatCounter suggests that Bing, Microsoft’s new search decision engine, has overtaken Yahoo Search as the number two search service in the U.S. and worldwide in large part thanks to stealing market share from leader Google.

The company’s analysis for Thursday finds that in the U.S. Bing overtook Yahoo to take second place on 16.28%, with Yahoo Search currently at 10.22%. For the sake of comparison: Google’s U.S. market share is pegged at 71.47%, and its worldwide share at a whopping 87.62% (vs. 5.62% for Bing and 5.13% for Yahoo).

Are people just test-driving Bing en masse, or does this have anything to do with the fact Bing was forced upon IE6 users (now fixed)? Or is it just because it’s that good and the advertising is already working? Either way, the jump Bing appears to have made since launching merely a couple of days ago is significant, and the drop you see in Google’s share even more so.

(“Did Bing Just Leapfrog Yahoo Search?,” Tech Crunch, June 5) Actually, it’s all three of those things. Yep, people are test-driving the search service and many will opt to return to Google. Yep, people are being influenced by the near-perfect publicity and advertising surrounding the launch and showing up to see what the fuss is about (and it’s mainly publicity that Microsoft has been dealing with, obeying to the letter Al Ries’ immutable Law of Publicity). And, yep, folks in IE6 are stuck with Bing as their default search engine (but, so what, can’t someone just type in if they want to?). That, of course, is the purpose of doing a big, expensive rollout — to gain market share. And then the market share becomes the news and you get . . . more market share. That’s how these things are supposed to work. Will it fade? Maybe. But the odds of Bing fading into also-ran status are higher if the launch failed to make a serious run at Google. But tell that to the distempered anti-Microsoft idiot savants over at Tech Crunch. No, don’t. You can’t actually tell the writers at Tech Crunch anything. It’s like trying to tell Fyodor Karamazov that he’s a buffoon. You just get more buffoonery.

And now it’s auto body shops and nail stores going digital.

According to The Kelsey Group’s Annual Forecast, local advertising is shrinking. In 2008, the market size of the US local media and advertising market was estimated at $155.3 billion. By 2013, that number is expected to be only $144.4 billion. As money dries up from traditional local media like newspapers and the Yellow Pages, local ad money shifts into mobile, search and social networks. . . .

Kelsey notes in its Mobile Local Media 2008-2013 study that the US local share of mobile searches for local services is expected to grow from 27.8%, which was seen in 2008, to 35.1% of searches by 2013. And, ad revenue from local mobile search is expected to grow from 50.3% of revenue seen in 2008 to 56.1% in 2013.

(“Local marketing shifts to digital,” DM News, June 1) The greatest challenge facing local small businesses is how to integrate their marketing communications into the increasing consumer use of mobile devices and social media. Hell, simply figuring out how to get out a print or radio ad is a major day-waster for small business owners and managers. Now they have to figure out the optimal placement in mobile searches and still-in-their-infancy local social networks.

Apple takes over the world.

Apple plans to introduce a cheaper version of its popular iPhone as soon as Monday, in a move that could dramatically increase the company’s share of the market for web-surfing devices, people familiar with the initiative said on Thursday.

Analysts said that the company wanted to show off either a $149 phone or a $99 phone, down from the current low end of $199 and still subsidised in exchange for an AT&T communications service contract.

(“Apple to launch cut-price version of iPhone,” Financial Times, June 5) Okay, they’re not there yet. With only 11% of the worldwide market share in smart phones (Nokia leads with 41%), the Apple version of Microsoft is a few years down the pike. But the contemplated low-price iPhones sure shows you what kind of margins they’re commanding on the higher-priced versions. Who wants to take over the world when your current business model is the “it’s raining money” business model?

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