CDK Global, the proverbial bull in the China shop has decided to divest itself of its digital marketing concerns in order to focus more on its core software business. Bottomline is: Their advertising segment got broadsided when it lost its status as exclusive preferred website provider and manager for Chevrolet, Buick and GMC dealers.
Share Prices Taking a Hit
The translation is that when the stock market is cranking and their share prices are tanking at a 6 month low, it’s time to cut bait. Anti-trust lawsuits aimed at them and Reynolds and Reynolds, filed one after the other, have been a headache since 2018, but apparently have played no part in this decision.
The Chief Speaks
Brian Krzanich, president and chief executive officer released this official statement: “Exiting the Digital Marketing Business allows the management team to focus on the building momentum in the core auto software business and to accelerate growth in fiscal 2020. We believe the Digital Marketing Business is an attractive asset for someone who is better positioned to leverage the technology platform and management team that we have built. During this transition period we remain committed to our CDK Digital Marketing customers, and will continue to support our comprehensive suite of Digital Marketing technologies and services.”
For many in the industry, this is big news that surprised few. When your sole purpose is to appease a bottomline to investors, nothing else matters, and when you lose exclusivity, you’re bound to lose customers…and they have.