Best Buy Updates: Enters Cloud Computing Biz with mindSHIFT Deal

November 17th, 2011 by Trefis Team
-9.53%
Downside
99.06
Market
89.62
Trefis
BBY: Best Buy Co logo
BBY
Best Buy Co

Last week, Best Buy (NYSE:BBY) acquired mindSHIFT, a Massachusetts based managed service provider for $167 million. mindSHIFT provides cloud service, data center services and professional services to more than 5,400 U.S. clients. The acquisition, which is expected to be completed by year-end would give Best Buy entry into the growing MSP market for small and midsize companies, which is worth $40 billion. [1] We believe this is a major development for Best Buy as the acquisition could bring in diverse revenue streams and possible synergies with the Best Buy Geek Squad.

On Monday, Best Buy announced that it would sell Zynga’s limited-edition toys from FarmVille in its U.S. stores. Best Buy plans to offer eight FarmVille collectible plush toys to customers with in-store availability from November 25. [2]

Internationally, Best Buy also announced its plans to close all of its 11 stores in the U.K. which are part of Best Buy Europe, a JV with Carphone Warehouse. The first store was opened in April 2010. [3]

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Best Buy and Carphone Warehouse plan to launch a mobile phone venture with Best Buy’s Chinese partner Five Star, and they plan to replicate the success of Best Buy Mobile, a JV between Best Buy and Carphone Warehouse in the U.S. They plan to rollout out a specialist mobile phone outlet within Five Star’s existing stores in China. [4] Best Buy also agreed to buy out Carphone Warehouse’s share in its U.S. and Canadian mobile business for $1.3 billion.

See our complete analysis for BBY stock here

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Notes:
  1. Best Buy Buys Into Cloud With mindSHIFT, Forbes, November 7, 2011 [↩]
  2. Zynga Teams Up With Best Buy To Sell FarmVille Collectible Plush Toys, Tech Crunch, November 14, 2011 [↩]
  3. Carphone Warehouse to close all 11 Best Buy shops, BBC News, November 7, 2011 [↩]
  4. Best Buy, Carphone target China’s mobile market, Yahoo News, November 7, 2011 [↩]