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"Time Warner Should Buy Starbucks"?

Money2Scott Donaton suggests that Time Warner should buy Starbucks in this blog post.  His argument is all about the "fat pipe" that Starbucks represents and the upside it could provide Time Warner via in-store magazine racks, for example.

This sounds like a solution in search of a problem.  I'm not convinced that availability and placement are the key challenges facing the magazine industry.  Magazines are on sale in as many locations (or more!) today than they ever have been.  I've got to believe that all the freely available magazine-like content online is the bigger threat here, just like it is for newspapers.

Additionally, would the in-store Starbucks experience be hurt or helped by the addition of a magazine rack?  Do they want or need that additional clutter?  If I've avoided buying a magazine at the grocery store, Walmart, etc., am I more likely to buy one when I'm picking up my afternoon latte?  Sure, it can work with specialty CDs, but is People magazine really exotic enough to be Starbucks-worthy and move the needle?


Michael Miller

Typically stupid corporate America "synergy" idea. TW doesn't have to buy Starbucks to put its magazines in Starbucks stores. Haven't they ever heard of rack jobbers? Acquiring Starbucks for magazine distribution is something lower than than the tail wagging the dog. It would be like Wiley purchasing Wal-Mart in order to get its books distributed.

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