What's really behind E Ink's decision to sell?

E Ink is on a roll in a market that is about to explode (in the good sense). After 10 years of work developing a low-power, highly legible display, it's got something that works. Thanks to Kindle, it's proven itself in the mass market and it's in lots of people's hands. And the market is about to take off now that we have digital delivery systems, a new generation of hardware, and a huge disruption in the traditional publishing market. So, why would E Ink sell itself? The price - $215 million - seems relatively low for such a hot product. [E Ink had raised more than $150 million from investors.] If they need the money to fund R&D or to build manufacturing facilities, surely there were other possibilities. Apparently the market crisis made an IPO implausible, although, to tell the truth, I - with my weak financial grasp - am not convinced. Perhaps [E Ink and its investors] have reason to think the market is not going to take off, but that seems wrong. . . . Or maybe they have doubts about E Ink technology. Maybe they worry the cost won't drop fast enough for a commoditized market. Maybe color isn't on its way fast enough. Maybe they're worried about the inability (or so I'm presuming) of their tech ever to handle video, since the winning e-reader will eventually be multimedia. Maybe they know about [other e-book devices] on the way - Apple iPad or whatever the presumed product will be called - that will make static, black-on-gray pages seem obsolete.

www.hyperorg.com/blogger

Good for GM, bad for taxpayers. Harvard Business School professor Rosabeth Moss Kanter says that if she wanted to own a piece of General Motors Corp., she would have phoned her broker. But after the company's bankruptcy filing and the federal government's intervention, she finds herself an involuntary shareholder. "It is hard to see what good will come of this, and it sets a dangerous precedent," Kanter blogged.

Is this a productive new use of assets? No. Is this a move toward transforming transportation? No. Is there a significant national security interest? No. Will this save more jobs than it kills? No. Will this promote innovation and industries of the future? No. OK, maybe there is some prospect of a leaner, more competitive company being created in the restructuring that will make me proud to own it and maybe to consider buying a GM car - if the name GM even survives. But the indicators make this look unlikely, for example: GM's lag in producing energy-efficient models; falling auto sales in general plaguing even world-leader Toyota; new business models such as Zipcar encouraging people to see cars as shared utilities rather than must-have personal possessions; and low-cost innovations such as [India's] Tata Nano coming from the developing world. So I stick with my string of No's. I would advise the Obama administration to help innovative new companies emerge from the ashes of GM. The entrepreneurial spirit will restore the American economy more effectively than propping up falling giants. And if the administration wants to make bold moves, I suggest that what America needs is a big national innovation initiative, equivalent to the space program, to reinvent transportation. Not just to make it greener and more energy-efficient, but to make it radically different.

blogs.harvardbusiness.org/kanter

A look at Microsoft's Bing. Microsoft flipped the switch Wednesday on a revamped search engine, dubbed Bing, hoping to compete more effectively with Google and Yahoo. In a post titled, "Microsoft's Bing Will Change The Face of Search," Forrester Research analyst Shar VanBoskirk applauded Microsoft's new direction

Microsoft hopes that this engine will help it gain more searcher share by delivering results and content [that are] more relevant to how users actually search. What makes Bing different from existing search engines? Bing focuses on delivering answers, not Web pages. Microsoft research shows (and Forrester's research affirms) that users rely more and more on search engines to deliver solutions . . . hotel reservations, movie listings, gift ideas, newsclip replays . . . not just a directory of Web sites. Bing was developed to help consumers make decisions, not just to catalog content. Bing organizes content/results by searcher (not algorithm) relevance. Using research of what types of results have proven relevant to former searchers, Microsoft has organized its Bing interface to deliver the content users are most likely to value, rather than just content that matches an algorithmic formula. Bing filters out results that aren't relevant. Instead of giving users an overwhelming volume of results, Bing acts as a concierge to help point users to the results most likely to meet their need.

www.forrester.com/marketing

Have you see an interesting item on a local business blog lately? E-mail kirsner@pobox.com.