It is well descreibed what happend. If You dont know, take a look here: 8 - 14 August 1942
The question I will discuss is: what would have been a better disposition of the US and Australian cruisers. I see 2 primary reasons for the disaster:
Radar
I find it unforgivable that US performed so poor with radar. Hey - we are 2 years past the battle of Britain, and 1 year after the British tracked Bismarck for several days. Why have the US Navy not trained in detecting ships at night and why was it not possible for the US Army to see the difference between a flight of B17s and a Japanese air armada at Pearl Harbor. I guess a combination of American “we know best” attitude and som kind of arrogance when it comes to take advise from others. @dan.harnden + @NormanStewart Feel free to flag
The heavy cruiser and naval tactics
Its such a small area, so how could they have so many heavy cruiseres is those restricted waters? Was is the same feeling that with escort fighters over Germany: keep close to what you have to protect. Good for moral of those you are protecting but bad for the tactics. I naval warfare you always want a “cross the T” situation, which means You have Your broadside to an approaching enemy, that can only fire with half his guns.
Suggestion for discussion
I think a slight adjustment to the plan could have made a difference:
If the destroyers was set to circle Savo Island counter clockwise they could make a sweeping radar search with their forward looking SC2 radars and release each other continuously. If all the cruisers was arranged in a line across the sound (blue), any approaching ships (red) would come into a “cross the T” situation and the 8" guns easily had the range to lay a barrage at arrival. After that they could battle across the sound to prevent enemy ships the possiblity to attach the transports.
There are a few more factors for US Navy rout at Savo island I believe
Bad reconnisance and intelligence processing. The movement of Japanese cruiser division from Rabaul to Slot was not unobserved. They had been detected by US submarine S-38 , RAAAF Hudson aircraft , Coastwatchers and aircraft from US Task Force. All those sightings and recon data somehow not processed , nor went to higher ups in time and relayed too slowly and too late to US and Australian commanders off Guadalcanal (shades of Pearl Harbour)
Withdrawal of US cariers pre maturely. Admiral Jack Fletcher commanding US carriers (Enterprise , Hornet , Saratoga) puled out his carrriers too early wary of air attacks from Rabaul and showed refueling need and lack of fuel in his ships as excuse for his retreat though he had more aircraft and fuel in his carriers on 9th August than he had during Battle of Midway when he faced entire Kido Budai. My theory is after losing Lexington in Coral Sea and Yorktown in Midway he became overcautious.
Underestimating Japanese night fighting skills and over confidence after Midway victory. If one looks at the history of Japanese Imperial Navy it will be clear to see they were influenced and take inspiration from British Royal Navy most including their night fighting skills and trained themselves in night fighting maneuvers and exercises about that to breaking point till becoming razors edge on this issue. Japanese surface battleships were equipped with excellent night optical sight devices and light projectors to illumunate targets far away in dark. Their Long Lance Type 93 long range , liquid oxygen propelled torpedoes with far larger warhead than any other model , were excellent for that kind of battle. All these were dismissed and ignored by US Navy Task Force commanders when they were supposed to be full alert after retreat of Fletcher’s carriers the day before. Instead after landing and unloading operations they became relaxed
Drachinefel covers all the Naval Battles of the Guadalcanal campaign one per episode and I think he does his usual exceptional work.
Thank you for the opportunity to flag but I would not flag just for flagging’s sake. I think your post is very good.
It seems to me that American doctrine and command experience was way behind the hardware they had on ships. Commanders did not pay enough attention to the information available. Nor did they try to maximize information by putting their equipment in the correct positions in their ship formations.
Americans learned a lot of hard lessons in this campaign but they did learn. Why did they learn so slow?we can speculate about that a lot here. I would postulate that we were stubborn and didn’t want to learn from Britain but that Britain was not exactly in a position to teach either. I think we had a large number of stodgy admirals.
I will say regarding the carriers withdrawing. Maybe a mistake yes but not only low on fuel, they had also lost 2 dozen fighters which might have played a role.
Even a patriot like me can admit to our misgivings. That’s kinda my job. 
