Ever since Circuit City Stores (NYSE: CC) CEO Philip J. Schoonover sliced 3,400 sales people in March 2007 to save money, I have questioned the savvy of its management. That's because many of those fired sales people took their customers over to Best Buy (NYSE: BBY). As its stock lost 86% of its value, I was surprised that anyone would make a bid for it.

Yet Blockbuster (NYSE: BBI), the struggling video store chain, decided to buy. I don't know what got into Blockbuster's head to make it think that combining two struggling companies would make an agile competitor. The Richmond Times reports that it wanted to create a one-stop shop for movies, games, and electronic equipment. But that dream died when Blockbuster pulled its $1.3 billion offer after reviewing Circuit City's books.

Carl Icahn has said he would buy Circuit City. But it's losing money -- $164.8 million, or $1 a share, in its fiscal first quarter. This was $100 million more than its Q1 2007 loss. And Blockbuster's conclusion after a closer look at its financial statements does not bode well for Circuit City's future. Circuit City stock is down 7.8% in pre-market. Let's see whether any new bidders emerge.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

I've been known to harp on consumer retailer Best Buy, Inc. (NYSE: BBY) from time to time here. The retailer just gets it in most cases -- from the consumer experience to merchandising decisions to customer service. While fellow retailer Circuit city Stores, Inc. (NYSE: CC) completely doesn't get it and is in horrid shape, Best Buy just keep steaming along, economic recession be damned. Here's a reason why: its store managers are actually encouraged to go "off script" and change merchandising displays on the fly to fit the area where the store is located.

This example about a normal Houston-areas Best Buy location is a perfect example. Houston, being the large port city that it is, was seeing a huge amount of Eastern European shoppers. As a result, it moved iPods and international power converters to the front of the store (from the rear) and saw sales spike on these items -- among other things -- by 67%. In most cases, changing merchandising displays -- called planograms -- are a huge no-no in corporate retailers. The thinking is that the "secret sauce" that works at one store should be simply duplicated at every store. Big-box retailers like Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) follow this strategy religiously.

Expecting store managers to take risks in terms of merchandising decisions is the kind of thing that makes good retailers great. Contrary to what some national retailers preach and practice, the customer needs vary widely from state to state and market to market in most cases throughout the U.S. Why not have a planogram for every unique store that responds better to the surrounding population and give the local consumer the best and most profitable experience? Looks like Best Buy even made the experience personal for shoppers from halfway around the world. That kind of thinking is why the retailer continues to be successful.

Best Buy Co., Inc.'s (NYSE: BBY) Geek Squad technical support services have been very successful for the largest consumer electronics retailer in the U.S. in recent years. It's a profit-making machine that's put the emphasis on service margins over ever-shrinking product margins. Anything and everything PC-related that you need done -- personal or business -- the Geek Squad can be there.

Technical support is the best way to describe much of what Best Buy's Geek Squad does -- so would you believe the retailer wants to get involved with technical support in a social networking sense? FixYa.com, a website that allows customers to help each other with technical issues and owner's manuals from almost any piece of technology, is generated by users -- not retailers. However, as many of us have seen, user-generated destinations can be some of the most successful. Why pay to support your customers when they can support themselves in a sense?

I don't believe this is any kind of cost-saving move by Best Buy -- the retailer simply wants to provide its customers with an additional way to receive support as fast and efficient as possible before handling in-depth issues directly to a Geek Squad representative. Best Buy's co-branded version of the site located here will allow customers an easy entry path into support and troubleshooting. Again, it looks like Best Buy is outpacing competitors in terms of getting help to its customers as fast as it can, and in this case, at no charge.

When D&M Holdings recently put 49% of the company up for sale, consumer audio brands like Denon, Marantz, Snell, McIntosh, Boston Acoustics and Escient seemed primed for the picking. These are top-tier audio brands sold in some of the most prestigious consumer electronics retailers in the nation. The price for that slice? $700 million. The possible suitors? Consumer electronics brands Kenwood, Harman International and ... Best Buy Stores, Inc. (NYSE: BBY), the largest consumer electronics retailer in the U.S.

Philips Electronics, who holds 12% of D&M Holdings' shares, indicated that it would also put its shares up for sale, as well, to the same bidder group, giving one company access to 61% of D&M Holdings' shares. Kenwood is owned by Bain Capital, and may be looking to re-enter the home audio field. Harman, which owns the Harman Kardon, Infinity and JBL brands, may be looking to expand. But Best Buy buying a top-tier audio manufacturer? Isn't it a retailer, not a brand owner that could compete with the brands it already carries?

Best Buy is already D&M Holdings's largest customer, but there is a fine line between a Best Buy-owned brand (which is seen as entry-level and with inferior quality) and a top-of-the-shelf brand such as Denon and others. I would posit that Denon and Snell customers are audiophile-type customers who would scoff at the idea of having a Best Buy brand in that audio equipment rack, even if nothing but the ownership of the brand changes. Harman dropped out of the bidding already, so it could come down to Bain Capital and Best Buy soon. Should a mass-market electronics retailer really get into high-end consumer audio? That's a gamble, although the price wouldn't be exorbitant (just over $1 billion if you do the math).

Many of us have heard about the end of analog television. Come February 19 2009, analog television signals will be shut off and it will be the Y2K mess all over again. Well, not exactly -- but that's what the FCC will have you believe. If you don't hear many (many) times in the next 10 months that analog television signals are going away in 2009, then you're probably living under a rock.

But consumer electronics retailer Best Buy, Inc. (NYSE: BBY) probably wishes the FCC would go crawl under a rock. The largest consumer electronics retailer in the U.S. was fined $280,000 along with other national electronics retailers as the FCC recently doled out more than $9 million in fines for not clearly indicating to consumers that analog televisions will need a special converter box come next February. Best Buy, which has removed analog televisions from its stores, was a tad befuddled by the fine since it does not even sell analog television sets.

Nevertheless, the FCC says that many retailers "willfully and repeatedly" violated the rule governing the specific labeling of analog television sets. Just in case that hermit living on a mountaintop is confused about analog television signals going away, that label on the side of a TV box will save the day. Not. It's not the small amount of the fine that an issue here -- it's how incredibly short-sighted and goofy a federal agency can be about something so minor.

Although I'll get arguments that analog TV being shut off isn't a minor issue, it is. Best buy indicated this to the FCC: "Best Buy has been a leader in helping educate consumers about the analog to digital transition," the company said. "We were among the first retailers to put signage and brochures in our stores, including Spanish language versions of this material. We have had extensive DTV information available on BestBuy.com as well as our Spanish language website."

But whoa -- watch out: those TV box labels might save the day in 10 months for someone. Sheesh.

Not only is Best Buy, Inc. (NYSE: BBY) moving swiftly to kick out the dead HD DVD format from its store shelves, but now the largest consumer electronics retailer in the U.S. is starting to aggressively price the victor format of the next-generation DVD -- Blu-ray.

Although there is now just one next-generation DVD format available, consumers still haven't ponied up tons of cash to buy Blu-ray hardware players and accompanying $29,99 Blu-ray movie titles. Why? Standard DVD is good enough for most of us.

That is, until the prices come down on the players and the movies themselves. Blu-ray players are still pricey at $399 and up in most cases, but Best Buy is taking the sting out of some movie prices by cutting many popular titles to $19.99 each. Psychologically, that gets Blu-ray pricing on some level of parity with normal $14.99 and $16.99 DVD prices. Even some new releases on standard DVD start at $19.99 as well.

And not only that, online competitor Amazon.com (NASDAQ: AMZN) started offering more than 100 Blu-ray titles this week at up to 47% off. Is this the start of aggressive Blu-ray movie pricing meant to finally spur sales of the new DVD format? Now that the competing HD DVD format is out of the way, the path becomes much easier for retailers. Perhaps aggressive movie titles will actually cause the more expensive hardware to move faster off shelves.

In 2007, over 75 millions Americans purchased a mobile phone from a carrier-owned store, while roughly 5.5 million bought their handsets from a consumer electronics or other retail chain. That's quite an imbalance. But as networks open up and many handsets are sold in an "unlocked" state, does it make sense for carriers like AT&T, Inc. (NYSE: T) and Sprint Nextel Corp. (NYSE: S) to continue to operate their own retail stores?

After all, if the exclusivity of certain handsets is no longer the domain of a certain wireless carrier, why operate an expensive chain of national retail stores that compete with the fast-and-furious retailers like Best Buy, Inc. (NYSE: BBY) and Radio Shack Corp. (NYSE: RSH)? Although AT&T and Verizon Wireless won most of the licenses at a recently-completed FCC auction, one possibility that emerged from the auctions itself was the promise of being able to use non-carrier cellphones on any network which is technically compatible. For example, one could buy a Sprint Nextel phone and use it on Verizon's network.

Does this kind of move erase any incentive for carriers to continue operating expensive retail stores across the U.S.? That is the question retailers like Best Buy would like answered, as the largest consumer electronics chain in the U.S. would like to up its mobile phone sales market share from 2% now into the double digits within five years. Financially, it may make more sense for the large wireless carriers to eventually exit the retail business and let the mega retailer -- which has better overall selling efficiency anyway -- handle phone sales. It's already ramping up Best Buy Mobile, so the strategy may be underway anyway.

Best Buy, Inc. (NYSE: BBY) will be joining up with Goodwill Industries in the Silicon Valley market to host a free electronic waste recycling event this weekend. Specifically, the event will be held at the Best Buy location at 5065 Almaden Expressway in San Jose, California from from 9am to 3pm. Here's my beef with this -- why aren't all U.S. Best Buy locations doing this at the same time?

This is a great partnership between two huge brand names. If Best Buy were to really want to pump up its brand name even more, a national partnership with Goodwill seems a great way to do that. The amount of change in consumer electronics means that consumers are replacing equipment -- from older iPods to laptop PCs -- at a pretty decent rate. What happens to all that e-waste?

Toxic substances like lead and mercury exist in all those products (and more), and with more citizens in the U.S. becoming "green" -- as in ecologically-conscious -- a national partnership hosted by the largest consumer electronics retailer in the country with a goal of minimizing electronic waste is a fantastic idea. Best Buy, you could promote this just like a two-day weekend sale. Forget pitching products for a single weekend and promote a campaign like this for a single weekend on national television, cable and in your newspaper circular and website. It could turn out to be one of the best brand-builders you could ever have.

Best Buy, Inc. (NYSE: BBY) announced this week that it has made some large changes in the executive ranks. The largest consumer electronics retailer in the U.S. has promoted Barry Judge as its Chief Marketing Officer, Mike Vitelli to Exec VP of all customer operating groups, David Berg as exec VP of international strategy and corporate development and David Morrish to Exec VP of connected solutions.

In other words, Best Buy has revamped is focus areas to get a grip on the way customers are buying and using its products and has reorganized some executives to lead those new groups. Brian Dunn, Best Buy's President, called the large amount of executive changes reflective of "better serving our customers into scalable actions." Translated, that means seizing upon each customer as an "action item" and making sure the solution they need is fulfilled by Best Buy.

Changes have happened in the consumer electronics world and will continue happening at a rapid pace. It's good to see Best Buy realize this and appoint leaders capable of seizing on all these new opportunities. Starting in 2007, Best Buy started distancing itself from the competition, and so far has no real match for breadth of products, store locations, pricing and branding. Competitor Circuit City Stores (NYSE: CC) has continued to flounder and has an uncertain future, and CompUSA completely shut its doors early this year.

Best Buy, Inc. (NYSE: BBY), the largest consumer electronics retail chain in the U.S., may be eyeing another service provider acquisition to follow up on the Speakeasy purchase earlier this year. Speakeasy was a provider of IT services to small businesses, and Covad Communications (AMEX: DVW) is a larger broadband internet service provider. Is Best Buy really staking an offensive in the business world with one completed and one rumored acquisition? You bet.

Best Buy for Business is a division of the retail giant that wants to be the products and service provider for small and medium businesses as the chain branches away from strictly consumer retail to broaden its portfolio and diversify revenues from the vagaries of retail that can change like the wind.

According to Broadband Reports, talks of an acquisition have been on-again, off-again for a while and may not be an acquisition of Covad in its entirety, but perhaps its VoIP business only. This would make sense, as Best Buy has recently stepped up its VoIP business in order to bring more competition to the telecom world. At this time, Covad is valued at about $194 million based on its current stock price of $0.65 per share on the American stock exchange.

In an age of flat-panel television and laptop computer sales, consumer electronics giant Best Buy, Inc. (NYSE: BBY) continues to impress me. The company rolls out initiatives that actually work and serve consumers first (instead of shareholders), which in turn brings the company more business, which in turn of course helps shareholders.

Compared to laggard Circuit City, Inc. (NYSE: CC), I believe Best Buy will continue to offer the best upside in an age of slim electronics margins since it leads the way in sufficiently groping customers for those fat-margin services, including helping them set up their HDTVs, to scanning their computers for viruses.

So, it was with a bit of shock that I read the Associated Press report that Best Buy has only doled out some $235,000 to lobby the Federal government in the first six months of this year. This fact was recently disclosed by the company, and in an age of so much change -- like HDTV transitions and declining CD sales -- I would have thought the company would be pouring much more money into the pockets of politicians who have a direct impact on the products that it sells.

Of course, as would be expected, Best Buy did lobby the FCC regarding the expected completion of a nationwide transition to digital television in early 2009. That issue alone is set to cause an even larger transition to newer high-definition television sales in 2008, and Best Buy will be a main beneficiary of that movement once the FCC gets in gear and starts warning hundreds of millions of Americans that analog television will be shortly shut down. I'm betting that Best Buy will break the $600,000 lobbying spend barrier at the conclusion of 2007. Place your bets now.