Valleywag: Best Buy

iPhone fails to save Best Buy's bacon

Paul Boutin — Wed, 12 Nov 2008 07:56:49 PST

You can buy an iPhone at Best Buy, but more likely you won't buy anything at all this Xmas. The company's revised forecast predicts revenue between now and February may drop by 15 percent. CEO Brad Anderson's official statement is blunt: "Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen ... Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year." Cool, but seismic changes? Brad, come on out from Minnesota and we'll demo a real earthquake for you. (Photo by AP/Paul Sakuma)

Wal-Mart and Best Buy will sell MP3s on flash-memory cards

Paul Boutin — Mon, 22 Sep 2008 09:40:00 PDT

SlotMusic is SanDisk's attempt to replace the CD as the brick-and-mortar media for music. Flash-memory cards, preloaded with music files, will be sold in stores like Best Buy and Wal-Mart. There aren't many other details yet, aside from a press release and the "Check back soon" SlotMusic.org site. Here's a primer on the format:

SlotMusic cards will be SanDisk MicroSD cards preloaded with music, album art and other extras.
Each card will be packaged with a USB sleeve, making plug-in to any computer theoretically no problem.
The details in the announcement seem intentionally vague on whether the disk will be a one-on-one alternative to CD albums, or whether record labels will create bundles that take advantage of the cards' 1 GB capacity.
MP3 will be the audio format, with rates as high as 320 kbps rather than the grainier 128 kbps most commonly used to share MP3s. (The 128 kbps rate was chosen as the target for MP3 audio quality back in the early '90s, when ISDN lines were the future.)
No DRM! Seriously, none.
The Big Four music labels — EMI, Sony, Universal and Warner — have signed up.
So far, no details on the initial catalogue of music. "Check back soon for announcements" says the artists page at SlotMusic.org.
It's gotta be annoying to the record execs involved that Slotmusic.com is owned by a defunct band called S.L.O.T.

Best Buy snapping up remains of Napster

Owen Thomas — Mon, 15 Sep 2008 08:20:00 PDT

Over the years, the reports of Napster's death have been greatly exaggerated. But electronics retailer Best Buy may just manage to put a stake in its heart. Best Buy is buying the online music-subscription service for $121 million — $54 million, really, after setting aside the cash in Napster's bank account. A great return on investment, considering Napster's assets last sold for $5 million out of bankruptcy in 2002, right?

Wrong. Roxio, a CD-burning software company, snapped up the Napster name and the technical assets of Shawn Fanning's file-sharing startup on the cheap. But sometimes you get what you pay for. Roxio shed its software business and took the Napster name, but never figured out how to profit from it. In the last year, it lost $16.5 million.

And yet Napster managed to live on. If anyone can lay it in the ground once and for all, we're betting it's Best Buy. The retailer has stumbled from one unsuccessful online-music strategy to another, most recently through a partnership with RealNetworks' also-ran music site, Rhapsody. Why doesn't Best Buy just ask Steve Jobs for more iPods to sell? That seems easier.

Apple geniuses make 56 percent more than Geek Squad agents

Nicholas Carlson — Thu, 04 Sep 2008 17:00:00 PDT

Company-review site Glassdoor says that according to employees at both companies, Apple's repair technicians — known as "geniuses," with the attitude to match — make $18.30 per hour and $36,000 per year on average. That's about 56 percent more than Best Buy's Geek Squad "agents," who earn $11.58 per hour and $23,000 per year. The reason for the difference? Apple's "geniuses" are tasked with repairing beautiful objects that restore your sense of childlike wonder, whilst their Best Buy counterparts open tickets on junk in black plastic cases. Right, Steve?

Report: Best Buy won't profit selling iPhones

Nicholas Carlson — Fri, 15 Aug 2008 08:40:00 PDT

Best Buy will begin selling Apple iPhones this September, but it won't make much or any money at all doing so, according to retail analyst Colin McGranahan, who writes in a not the chain won't markup the phone more than $50 if at all. So why's Best Buy doing it? One, to sell higher-margin accessories like iPhone cases and speakers. Two, iPhone buyers are the kind of customers Best Buy wants to see more of in its stores — wealthy, and happily swayed by good marketing into buying the lastest shiny new objects.

Best Buy agrees to sell iPhone

Nicholas Carlson — Wed, 13 Aug 2008 10:20:00 PDT

Electronics retailer Best Buy will begin selling Apple's iPhone 3G next month. Until now, only Apple Stores and AT&T outlets carried the phone. Like Apple Store customers, Best Buy shoppers must sign a two-year AT&T contract to leave the store with an iPhone. [WSJ]

Inside the BitTorrent collapse

Owen Thomas — Thu, 07 Aug 2008 15:40:00 PDT

BitTorrent has denied our report that the company laid off 12 out of 55 employees. That may be true: While our source told us 12 employees were on the layoff list, we've learned that, at the last minute, the jobs of two sales engineers, an HR manager, and an office manager were spared. Another tipster — "you can guess as to whether I'm an insider or not" — says that the BitTorrent layoffs aren't the fault of new CEO Doug Walker, who came to the those-crazy-kids file-sharing startup to add some enterprise-software gravitas. Instead, the elimination of BitTorrent's sales and marketing departments amounts to a coup by cofounders Bram Cohen and Ashwin Navin, pictured here to Walker's right and left, who are giving up on the notion of marketing BitTorrent's file-sharing technology to businesses and hardware makers, and instead pinning their hopes on becoming an "Internet peace corps."

That's the second time I've heard that phrase from BitTorrent tipsters, so I'm guessing it's already widely used, if poorly understood, within the company. Anyone care to explain what an "Internet peace corps" is — and how this plan will pay back BitTorrent's investors, who have invested at least $24 million in the company? Our tipster also says Walker's trying to raise a third round of financing amidst this uproar. Here's his detailed recounting of BitTorrent's woes:

Owen-

I read your posts on BitTorrent and here is my take (you can guess as to whether I'm an insider or not).

I feel it boils down to two young and inexperienced founders, one a wanna-be Internet celebrity in Ashwin Navin, the other a reluctant Internet celebrity in Bram Cohen, wielding too much power over the company. They executed a coup that doesn't bode well for the new CEO staying much longer. Sound familiar?

Torrent Entertainment Network

Ashwin's grand idea that new CEO Doug Walker put the kibosh on may very well end up being sold to Best Buy, but nowhere near $15M (unless BitTorrent is incredibly lucky or Best Buy foolish). Best Buy's idea is to OEM a white box set-top TV box, put the Best Buy logo on it and bundle it with BitTorrent to download the content. This is what Ashwin dreamed of...sort of to do for movies what iTunes did for music; a seamless end to end solution for renting and buying movies online. Its just been poorly executed and with Apple TV nearing perfection, TEN will be an albatross with whoever ends up with it. BitTorrent is on the hook for licensing deals (that Ashwin's brother Alvir put together) that were not favorable to the company at all, especially since the store has not done well with consumers. Apple has more leverage here too. You've probably already heard the nightmares TEN has had with Windows DRM so I won't rehash it here.

SDK

Their SDK business was attractive to device manufacturers in part because of the ability to leverage the TEN. With TEN going away or at least changing dramatically, device manufacturers are not as excited to partner with BitTorrent. The FCC ruling that will likely force ISPs to cap bandwidth and charge for overage makes it that much worse. Why would Buffalo, D-Link, Netgear, etc want to bundle and pay royalties for the BitTorrent client on their device when their own consumers may end up having to pay more to their ISP for the behavior of that client passively sharing files? Talk about a tech support nightmare.

DNA

Probably the brightest part of their business, they had the model wrong. They were charging per GB to match CDN pricing schemes. What they should have done is given DNA away for free from the start and charge for the help and support people will end up needing (like what Red Hat did for Linux). Of course, BitTorrent had absolutely no post-sales support put together so even when the now laid-off sales and marketing team started to get traction in the market, supporting those customers became a headache. Not to mention that Eric Klinker and the engineering team had no desire to support what product marketing said customers were asking for. Mac client? Good luck...the engineer working on that left in May and they have no plans to pursue that project. Live streaming? Bram tried to figure this one out but gave up after becoming increasingly frustrated over not figuring out a way to make it work easily. Bundle the DNA client into the next release of uTorrent in order to propagate it? Too much of a sacred cow. They feel the uTorrent users would leave in droves if they were to do such a horrible thing as attempt to commercialize uTorrent. Seems like the solution here was to just let everyone in sales and marketing go to make the people causing these issues go away. At least they got to keep their laptops as a consolation gift.

So now Doug Walker is left trying to cobble together a C round of funding as they desperately cut expenses. They are not renewing the lease on Floor 9 of 201 Mission St in December (rumor is Google is interested in the space, as well as several other floors in 201 Mission). 40 people in an office with room for 150 never does well for morale. Word is they are going to go back into stealth mode, turning into an "internet Peace Corps"...whatever that means. To me it sounds like they are turning into a non-profit which can't be attractive to for-profit minded investors. I'd hate to be one of their VCs right now.

BitTorrent Inc. laying off 12 of 55 employees

Owen Thomas — Wed, 06 Aug 2008 09:40:00 PDT

BitTorrent Inc., the file-sharing startup whose underlying technology is responsible for much of the piracy that plagues Hollywood, is laying off its sales and marketing department. The immediate cause of the layoffs: A failure to sell the Torrent Entertainment Network, BitTorrent's attempt at an online media store, to Best Buy for a rumored $15 million. That deal fell apart, a BitTorrent insider believes, because of a recent FCC ruling on file sharing. CEO Doug Walker, who replaced troubled founder Bram Cohen last fall, had hinted at a rethink of the store in March. Walker's also said to be rethinking BitTorrent's "DNA" service, which sought to offer businesses a cut-rate online content-deliver service, using file-sharing technology to undercut Limelight and Akamai's prices. BitTorrent is now thinking about making the service free, which would certainly count as "cut-rate" — but also suggests that it hadn't had much success selling it.

Getting the "Sex" date you never wanted with the Geek Squad

Melissa Gira Grant — Fri, 30 May 2008 12:00:00 PDT

Trying to download the Sex and the City movie last night, I had to wonder, When is a torrent site more comfort than a Cosmo? If you can't fulfill your Sex-seeking ladylove's needs with some unpacked .rar files, I understand. So does Best Buy's Geek Squad, which is offering rescue packages composed of quarters and excuses for men who don't want to lose quality videogame time to the premiere of the world's most commercially viable feature-length shoe porn. Geek Squad has it only half-right: Why not save your quarters and hire a girl to be professional company at the multiplex — for your girlfriend? (Photo: Daniella Zalcman)

Best Buy urges customers to take a break

Owen Thomas — Wed, 26 Mar 2008 16:00:00 PDT

(Screenshot via shifted)

Best Buy's Geek Squad celebrates death of noted pedophile Arthur C. Clarke tonight

Owen Thomas — Wed, 19 Mar 2008 16:00:07 PDT

Best Buy's Geek Squad is holding a memorial tonight to honor Arthur C. Clarke. Alas. Everyone was far too polite to say this about the recently deceased sci-fi writer: Had he lived in the U.S. rather than Sri Lanka, he'd be a prime membership candidate for the North American Man-Boy Love Association. "Once they have reached the age of puberty, it is OK... It doesn't do any harm," Clarke told the U.K.'s Sunday Mirror in 1998. More or less exiled from Britain over his underage affairs, he continued to pursue them in the South Asian island nation. Authorities there turned a blind eye. This is all well known among the more sophisticated realms of fandom — but not, apparently, Best Buy headquarters in South Richfield, Minn. At 8:01 p.m., every Geek Squad repairman will pause to think reverently of a champion of child abuse. The press release:

Tonight the Geek Squad is going to hold a moment of silence at 8:01 pm to remember the venerable Arthur C. Clarke (in army time, that's 20:01). Memo's regarding Mr. Clarke's passing have been posted at Geek Squad precincts around the nation...See below for the memo the Agents created...best...CK
ARTHUR C. CLARKE
1917 - 2008

Yesterday, the worlds of science and science fiction lost one of their true visionaries, the inestimable Arthur C. Clarke, author of seminal works like 2001: A Space Odyssey and Rendezvous with Rama. Through the writings of Mr. Clarke, all these worlds are yours.

It isn't easy to overstate Mr. Clarke's contribution to increasing the public's fascination with science and technology. In fact, Mr. Clarke's imaginative fiction, profoundly insightful futurist thinking and boundless optimism played no small part in shaping the formation of our company, Geek Squad.

Out of the deepest respect for Mr. Clarke, Geek Squad personnel will be observing a moment of silence this evening at 20:01 military time. Many thanks for your understanding. The sky is filled with one more star tonight.

Chris Kooluris
Ketchum
1285 Avenue of the Americas, 4th Floor
New York, NY 10019

Apple is now the second largest music retailer, ...

Mary Jane Irwin — Tue, 26 Feb 2008 11:54:57 PST

Apple is now the second largest music retailer, beating Best Buy, in the United States. NPD Group, the market-research firm which tracks sales, estimates 12 single-song downloads as an album. Why don't they just count revenues? That would be easier. [BusinessWeek]

Best Buy caught engaging in act of capitalism

Jordan Golson — Fri, 15 Feb 2008 14:40:22 PST

Sales clerks at a number of TV retailers in Massachusetts gave inaccurate information regarding the upcoming analog-to-digital television conversion. Imagine that: Sales clerks giving inaccurate information! The switch will require users of older televisions to purchase a basic set-top box partially subsidized by the government, but does not require viewers to buy a new TV. Eric Bourassa, a consumer advocate with MassPIRG, which commissioned the study, says "retailers should do a better job training their staff so that going forward, consumers that go into the stores can get the right information."

Or perhaps consumers should inform themselves about how they're spending their money. Best Buy is in the business of making money, not providing higher education to those who barely made it through grammar school. They aren't required to tell you that Amazon.com will sell you the exact same TV for cheaper, either. Would you expect a clerk making $9 an hour to give you detailed information about your legal rights? Would you expect them to even understand the subject? Why doesn't MassPIRG just raise money to mail free set-top boxes to everyone in the state? That seems easier. (Photo by AP/Ng Han Guan)

Best Buy loses woman's laptop, gets sued for $54 million

Nicholas Carlson — Tue, 12 Feb 2008 17:00:16 PST

Raelyn Campbell wants $54 million from Best Buy. She bought a $1,100 laptop and a $300 warranty for it from Best Buy in 2006. The next May, the laptop's on/off switch broke and Campbell brought it into the store for repairs. The store told her she'd have it back in two to six weeks. That didn't happen.

On July 11, they told her it would be ready in days. On July 25 they told her it'd been sent to Louisville for repairs. On August 7, Campbell left a message for the store manager. On August 9, a Best Buy employee finally confessed: They'd lost Campbell's laptop. Now Campbell wants $54 million. Or at least, Campbell confesses, the media attention such a huge number will bring to Best Buy. (Photo by Manuel W.)

Sprint Nextel has revived serious discussions ...

Jordan Golson — Tue, 29 Jan 2008 11:42:55 PST

Sprint Nextel has revived serious discussions with startup Clearwire to form a joint venture that would bring in funding from the likes of Intel, Google and Best Buy to build a high-speed wireless network using WiMax technology. [WSJ]

Best Buy's quarterly profit stormed up 52 ...

Jordan Golson — Tue, 18 Dec 2007 09:50:34 PST

Best Buy's quarterly profit stormed up 52 percent because of strong sales and fewer discounts than last year. Margin benefited from the "more rational" environment. Same-store sales climbed 6.7 percent. [WSJ]

CompUSA packs it in

Jordan Golson — Tue, 11 Dec 2007 14:40:43 PST

Those Brits really have a way with words. The witty writers at British IT rag The Register summed it up so well: "CompUSA goes tits up." The computer retailer, which closed a number of stores earlier this year (including one half a mile from my house, natch), has sold itself to Gordon Brothers, a "restructuring specialist" which plans to close CompUSA's remaining 103 locations. The stores will run through Christmas and offer "attractive bargains" to shoppers. CompUSA.com will be closed once current purchases are shipped. This, folks, is why they call Best Buy a "category killer." (Photo by cubicleman)

Microsoft and Best Buy are liable for subscribing ...

Nicholas Carlson — Mon, 15 Oct 2007 13:21:03 PDT

Microsoft and Best Buy are liable for subscribing the retailer's customers to Microsoft's Internet service, MSN, without consent, the Supreme Court ruled today by overturning a lower court's ruling on an appeal. One question the Supremes should have asked: "Who in their right mind subscribes to dialup anymore?" [AP]