When Zombies Mate: A thought experiment about the merger of GM and Sirius XM

There is something ironic about the fact that a company that sells navigation information inside the car is three times as valuable as the company that makes the cars!  More specifically, Garmin, the navigation firm who derives three quarters of its revenue from autos has a market cap of over three billion when GM's hovers just over a billion.  I know GM's low market cap is due to many things - not just their weak auto business, but also their pension, health and other liabilities -- (Toyota, which has few of these long tail liabilities remains above $100 billion), but nevertheless, there is a lesson to be learned.  Many years ago, I predicted that there would be as much money made in the information and entertainment sold in and around the car platform - as in the car itself.  And even then, I was not the first, or the only person to suggest that the car should be a platform for modular user-purchased communications and entertainment devices.  The new book, What Would Google Do, also recommends this open architected idea for the car. The answer as to why car companies did not allow an standard set of interfaces is very simple - the dealers and the manufacturers did not want to hand over the lucrative margins they made on dealer and factory installed equipment - and they lost the innovation race for information in the car.  Nokia, not GM, bought Navteq - Garmin's big competitor.  I blogged recently about the power of the map as an interface, and what more natural home for it than the car?

I know it would never happen politically, but what if it were possible to merge GM and Sirius XM - two of the walking dead?  If they both were willing to open up their end user "devices" radically, and allow open innovation on their satellite bandwidth and moving vehicles.  What innovations would be possible?  At our firm we have calculated that roughly 10% of the economy - about $1.2 trillion dollars is chasing demand in the form of advertising, promotion, inside sales, and other 'demand creation activities.  Certainly a good chunk of that river of funding is beginning to flow to location based services and the open car would have a good shot at it!

However, I think the truly open information layer on a car will never happen.  This past week, John Malone, was making his move to control Sirius XM in his signature shark-like manner nosing toward the blood in the water with the unerring accuracy of a beast whose design is hundreds of millions of years old.  I doubt that the two toxic entities will birth great innovation, but I can dream can't I?

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