Walmart Spends $300 Million On Social Media Startup

"For a $400 billion revenue company, a $300 million option on social commerce makes a ton of sense. "  Particularly when "social commerce" is becoming more of a reality on a daily basis.

So when giant Wal-Mart announced it spent $300 million to acquire social media startup Kosmix, many were not surprised. The six-year-old Mountain View, Calif.-based company–which has built a social media platform that organizes content by topic–has raised $55 million from a large group of Silicon Valley venture firms, AllThingsD's Kara Swisher reports.

Why would a company in the business of selling stuff acquire Kosmix, a social media platform that organizes content by topic?

There's actually two big reasons for the acquisition, with the second one most important:

  • Team. Kosmix was founded by the team that started Junglee, one of the first price comparison search engines, which was acquired by Amazon. The company will form the basis of a newly formed @WalmartLabs division. So to work on innovative projects Walmart is getting entrepreneurs with a great track-record and knowledge of online commerce and social media, which makes tons of sense. But the biggest reason is...
  • Social commerce is becoming a reality. People have been talking about "social commerce" since people have been talking about "social", but it's fast becoming a reality. Referrals to e-commerce sites from social networks are growing really fast, and on the internet, especially commerce, traffic is money. The sites that had great Google rankings in 2003 when Google was just starting to be huge made tons and tons of money. If Walmart.com, which always has been a kind of also-ran in e-commerce, can crack the code to get widely shared on Facebook, like SEOs cracked the code of getting good Google rankings, that could make it a rocketship.

The bottomline is that social commerce is starting to turn into a reality. People are turning to social networks more and more to decide on what to buy, and the businesses who are on the forefront of that trend will reap a windfall.

Norm Bond
NORM BOND shows people how to use digital marketing tools to find customers, grow sales and increase profits. And if you're not using digital tools he shows you how to do that too. He currently splits his time between Bangkok, Thailand and the U.S. He is available for consulting and speaking.
Norm Bond

@normbond

Digital Marketer, Growth Hacker. Solution Dealer. Crashes servers. Sells out events. Highly influential | Learn more https://t.co/3qYcsjLKUb
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