Wal-Mart announced Monday morning that it has agreed to acquire social media startup Kosmix to aid the retailer in honing its mobile and social e-commerce experience. Terms of the deal were not disclosed, but the acquisition is expected to close during the first half of this year.
Kosmix has developed three distinct social media-based Web services. Tweetbeat aggregates tweets for popular events and topics, like sports games and breaking news, in real-time. Kosmix.com can sort of be described as a social media-sourced encyclopedia, allowing users to search for any topic to learn about it. And RightHealth provides health and medical information. (Side note: Saumil Mehta, former product manager for RightHealth, went on to found Locbox, one of AngelPad’s recently demoed startups.)
How exactly Wal-Mart will benefit by acquiring current offerings from Kosmix or its team is still unclear.
Company founders Venky Harinarayan and Anand Rajaraman and their team will operate under Wal-Mart as the @WalmartLabs team, whose goal is to create social and mobile-based technologies to support the overall company’s retail business.
A visit to twitter.com/walmartlabs reveals a live account, but it has sent out zero tweets and only has a handful of followers. Apparently, it’s just a placeholder for now.
“We are expanding our capabilities in today's rapidly growing social commerce environment," said Eduardo Castro-Wright, Walmart's vice chairman. "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.”
Financially, Wal-Mart has been doing fairly well, last reporting fourth quarter sales of $115.6 billion, up 2.5 percent from the year before. Net sales for the full year were $419 billion, growing 3.4 percent. That said, Wal-Mart’s core business--store sales in the U.S.--slipped 1.8 percent.
Those numbers make it readily apparent to the company that it needs to amp up its online presence as a means of bolstering its brick-and-mortar offerings. Whether that means creating mobile solutions that users can take in stores or simply building up Wal-Mart’s Web properties can’t be said for certain just yet.
Whatever Wal-Mart's strategy, though, Kosmix will obviously play a major part in achieving that vision.
Founded in 2005 and headquartered in Mountain View, Calif., Kosmix had raised four funding rounds totaling $40 million from Accel Partners, DAG Ventures, Lightspeed Venture Partners, Motorola CEO Ed Zander and Time Warner Investments.