"Turn Left into Kentucky Fried Chicken... Then Continue 10.5 Miles to Destination"

One of my favorite financial blog sites Seeking Alpha has an entry on why Microsoft should buy Garmin. I know, I know everyone likes to speculate why Google or Microsoft should buy pretty much anything and everything, but whenever anyone puts actual pen to paper to make a sound argument as to why it may be a good thing, it’s always worth a read.

The author has five reasons why, but three of them can be summarized as Garmin is a well run company trading at a reasonable price and Microsoft has the cash to burn. But besides that, Garmin would very solidly fill a need within the new Microsoft in-car Sync platform and would build on the company’s existing relationship where its Garmin/Ford products already integrate MSN Direct for many features.

I think he is probably right… I don’t know how much Microsoft is investing in its Sync business, because $25B certainly doesn’t seem cheap, but the navigation system would seem like the most critical component of an in-vehicle networked technology system, so getting that part right will be critical for success. Garmin has proven over the years to be one of the biggest innovators in the space and is a pro at understanding consumer needs and translating those needs into features in consumer electronics device that sell very well. Microsoft doesn’t have the same track record.

Over the past few quarters, advertising and marketing revenue have been talked about more and more as a new source of revenue for Garmin. With Microsoft looking for new niches in which to get an edge over Google in the search and digital display advertising business, locking down this important part of the mobile experience with a leading PND and in vehicle navigation systems innovator like Garmin could give it a big leg up in location aware ad serving and location based search. And while it waits for that business to arrive, they continue to make a ton of money from the existing Garmin device sales which still have much room to grow on their own.