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Venky Harinaryan, founder of Kosmix, talks about why Walmart bought his company for $300 million
I recently caught up with veteran e-commerce entrepreneur Venky Harinarayan, who this past April sold sold his company Kosmix, which raised $55 million in venture financing, to Walmart for $300 million, resulting in the creation of @Walmart Labs.
In this interview, Venky talks about Walmart's social strategy through @Walmart Labs, and the reason why Walmart purchased them. In other words, he answers the question: What was the core technology Walmart was after.
The retailer's main interest was the company's ability to categorize and organize data on the Web, specifically in the context of social media sites. "The categorization technology, which underlined all the properites we built and the second piece was the ability to apply it to social media firehouses. So we built interesting databases on how people, places and things are connected to one another," he said, adding that the information ultimately will help Walmart provide better recommendations for people to make purchases.
For instance, if someone is Tweeting about Lady Gaga, and they're a Walmart customer that's opted into offers from Walmart, then it's likely Walmart might serve them up an advertisement promoting Lady Gaga's new album, or other products that are being Tweeted about by Gaga influencers.
This ability doesn't seem to be live just yet. But if you go to the @Walmart Labs site, it does make clear that it cares more about what people are saying in social networks than what they're searching for on Google.
Hence the acquisition. Now Walmart can tap into Kosmix's technology, particularly Tweetbeat, which essentially can help Walmart quickly assess what to recommend a customer, after analyzing Tweets around a particular topic and influencers who are Tweeting about that topic.
Venky also said that social commerce recommendations will likely work best with soft goods (clothes, jewelry) and not hard goods (cars, appliances and electronics). Soft good items are more inspirational, he said.
As for whether we'll see Walmart Daily Deals in the future? You'll have to watch the interview to find out.
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