Walmart has acquired social media company Kosmix for the sum of $300 million in a bid to create a mobile and social shopping experience to draw in new customers.
California-based Kosmix built a social media platform that helps filter online updates by topic. It drives TweetBeat, a real-time live events filter, and medical search engine RightHealth, providing users with detailed and personalized information.
Founders Venky Harinarayan and Anand Rajaraman, who sold their first company Junglee to Amazon in 1998, had raised some $55 million from Silicon Valley investors, and will now join mega-retailer Walmart to create @WalmartLabs.
“This new group will create technologies and businesses around social and mobile commerce that will support Walmart’s global multi-channel strategy, which integrates the shopping experience between brick-and-mortar stores and e-commerce,” said Walmart in a statement on its website.
A Step Ahead of Target and Kmart
The $300 million price tag is a hefty one but it will give Walmart an edge and force competitors like Target and Kmart to follow suit and invest in social media strategies.
“Walmart is going to leapfrog into social and mobile commerce,” said Ravi Mhatre, Managing Director of Lightspeed Venture Partners, a Kosmix investor. “All of these traditional retailers are going to need to evolve or die. I think social media and mobile are going to completely change the game. “If you’re in the business of selling to consumers and you’re not paying attention to social trends, then you’re not going to be in business long.”
Walmart operates retail businesses in 15 countries and e-commerce businesses in nine countries throughout the world.
Key Players - Biggest Online Retail Leaders in the USA
Key Statistics - US Online Retail Market (source: yStats)
- E-commerce revenue will top $170 billion in 2011.
- Amazon is the biggest online retailer in the US with $24 billion in revenue in 2009.
- M-commerce is booming, with 86 million people throughout the US creating $2.4 billion worth of revenue in 2010.