Wal-Mart is taking a gigantic leap into the social media technology business with its pending acquisition of Kosmix, a heavily funded social media technology provider that has built a platform that enables users to filter and organize content in social networks, in order to connect people with information that matters to them, in realtime.
So why is the retail behemoth buying a social media technology company which rumors have the price tag of some $300MM?
Do we expect to see branded Wal-Mart social media applications such as WalFace, SquareWal, WalMartoogle or WalTube? Wal-Mart is getting serious about the linkage between viral, on-line and in-store shopping. Witness that Wal-Mart is now testing an e-grocery delivery service in San Jose, California competing with PeaPod and Fresh Direct.
According to Wal-Mart’s press release, Kosmix will be joining a newly formed venture entitled, @WalMartLabs based in Silicon Valley. Walmart expects them to create technologies and businesses around social and mobile commerce that will support its multi-channel strategy, thus blurring the line between offline and online shopping.
Eduardo Castro-Wright, Wal-Mart’s vice chairman, states: “Social networking and mobile applications are increasingly becoming a part of our customers’ day-to-day lives globally, influencing how they think about shopping, both online and in retail stores. We are excited to have the Kosmix team join us to accelerate the development of our social and mobile commerce offerings.”
Hmmm…our imaginations are churning. How will Wal-Mart apply their value brand proposition in this new territory for them? What do you think?