9 ms·

I figured out what is going on here. Walmart thinks to themselves "we want to be like amazon, we want to be huge online" and then jet comes along and is someth

I figured out what is going on here. Walmart thinks to themselves "we want to be like amazon, we want to be huge online" and then jet comes along and is something of an almost competitor to amazon, so corporate thinks "oh we should snap this up" but...my gut reaction here is this is going to be a terrible deal for walmart, what are they going to do, keep dumping $500M/yr for it at a loss or what? Pretty desperate, but whatever.. :)

HillaryBriss 10y ago
Here's an assessment of how Walmart was doing against Amazon -- from the year 2000: ... the case for Amazon getting crushed by Wal-Mart doesn't stand up when you do some side-by-side comparing of their Web sites. What's wrong with Walmart.com? Put simply, it settles for taking orders for the products people come looking for rather than enticing them to buy things they hadn't even thought of buying. http://www.bloomberg.com/news/articles/2000-12-17/walmart-dot-com-vs-dot-amazon-this-race-isnt-even-close http://www.bloomberg.com/news/articles/2000-12-17/walmart-do... It's 16 years later and Walmart still hasn't been able to compete with Amazon very effectively.
- antisthenes 10y ago
  Amazon sells more than the next 10 biggest websites, combined. It's useful to note that those 10 biggest websites are operated by large retailers with a physical presence, so it doesn't necessarily mean they're in trouble (walmart, macy's, home depot, etc.) But the gap between Amazon and the next biggest e-tail site is huge. It's more of a canyon than a gap, really.
  - smitherfield 10y ago
    eBay isn't even one of the top 10 anymore? How the mighty have fallen, if that's the case.
swalsh 10y ago
If you're a cynical person that is an easy thought... but something tells me a 3B acquisition of a company that is losing money in so many places isn't a decision taken lightly. A public company like Walmart, there's some people doing some math here.
- sbierwagen 10y ago
  A public company like Walmart, there's some people doing some math here. http://www.zdnet.com/article/yahoo-reports-another-big-loss-and-tumblr-write-down/ http://www.zdnet.com/article/yahoo-reports-another-big-loss-... Yahoo also reported that it's writing down $482 million in charges related to the declining value of Tumblr, the social-blogging service that Yahoo acquired for $1.1 billion in 2013. http://www.theverge.com/2015/7/8/8910999/microsoft-job-cuts-2015-nokia-write-off http://www.theverge.com/2015/7/8/8910999/microsoft-job-cuts-... and the company is writing off $7.6 billion related to its acquisition of the Nokia phone business. That's more than the $7.2 billion Microsoft paid for Nokia's phone business last year. Public companies "do some math", but that doesn't mean their math is always right. Acquisitions are bets, and bets don't always pay off.
  - deleted 10y ago
    [deleted]
  - coryfklein 10y ago
    It seems you're pointing out the obvious: that no investment 100% guarantees any sort of return. Surely "the math" discussed internally at Walmart includes both: 1) A calculation of risk/reward on this investment 2) Determining whether result of 1 appropriately reflects Walmart's risk profile. Given that Walmart decided to acquire, it is safe to assume this investment's risk of loss falls within Walmart's investment profile.
  - mark-r 10y ago
    My own observation is that the bets hardly ever pay off. Microsoft/Nokia is a great example but there are plenty of others. Maybe it's just confirmation bias, but I have trouble thinking of one counter example.
deegles 10y ago
Would $500m/yr even be enough? I guess they could leverage their existing distribution network and stores...
__derek__ 10y ago
Walmart.com has much higher sales than Jet. It already is huge online, even if it's not Amazon huge. If anything, this is about pruning competition and buying potentially useful IP.
- mandeepj 10y ago
  >even if it's not Amazon huge are your serious? Walmart's revenue was $482.1[0] billion in 2015 and amazon's was $107b[1] [0] - https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=walmart+revenue https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e... [1] - https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=amazon+revenue https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e... edit - sorry, i missed the .com part
  - chockablock 10y ago
    Parent referred to walmart.COM. Walmart online sales only $13B/yr, per http://fortune.com/2016/05/20/the-silver-lining-in-walmarts-slowing-e-commerce-growth/ http://fortune.com/2016/05/20/the-silver-lining-in-walmarts-...
  - __derek__ 10y ago
    Even though I meant Wal-Mart e-commerce, this is a good reminder that the company remains huge despite concerns about its online sales.
- rogerdpack 10y ago
  Honest question: do any readers here really order from walmart.com ? I am surprised they sell much at all, based on how much I personally have ordered from them (never).
  - gtk40 10y ago
    I do. I price compare on larger purchases and have found Walmart.com cheaper occasionally. I've even done stuff from Sears, which has a multi-vendor marketplace as well. Both tend to have an addition 5-10% with Discover Deals as well, which I can't normally get with Amazon.
Maarten88 10y ago
> keep dumping $500M/yr for it at a loss or what? I think building Amazon wasn't cheap too. Amazon made losses for most of two decades straight, so Walmart dumping massieve money into building a competitor, with the insights of today, might still be cheap, relatively.
- sjg007 10y ago
  All shopping is going to be online and delivered for the same price as going to a big warehouse store. With the dash buttons and the third party integration Amazon is too big to ignore.
- rpgmaker 10y ago
  Amazon turned a "small" profit just the other day. Overall I think it's still fair to categorize it as a money losing venture (so far).
- gscott 10y ago
  Walmart being a established multi-national company they can't really have unprofitable divisions or unprofitable quarters. This will be equivalent to Yahoo's Tumblr acquisition (a failure).... no amount of heads exploding blue dust will save this.
exclusiv 10y ago
Jet.com is a disaster of a company fundamentally. However, it does make sense for a company like Walmart. I don't know about 3B, but Jet is a drastically cooler brand for them in their ecommerce battle esp. among millenials. Jet was previously fulfilling many orders from Walmart and now they can build a seamless integration to deliver competitively priced items quickly from the stores.
- antisthenes 10y ago
  > I don't know about 3B, but Jet is a drastically cooler brand for them in their ecommerce battle esp. among millenials. Every time I see a comment like this, it really makes me wonder who these mythical millenials are. I work in a company with 11 millenials out of 16 employees and NONE of them have even heard about Jet, let alone bought from it. Now that Jet was acquired and will be quietly folded into Walmart, it's more than likely they never will. They use Amazon almost exclusively for all of their shopping needs. Not sure where you got the notion that 'Jet is a drastically cooler brand'. It seems false both from anecdata I have and from the design of their website, which looks like a cheap knockoff of Amazon.
  - arcticfox 10y ago
    > will be quietly folded into Walmart There are some huge assumptions built into your comment.
  - duderific 10y ago
    I think the GP probably meant that Jet is drastically cooler than Walmart, not Amazon.
  - exclusiv 10y ago
    I meant Jet is a much cooler brand than Walmart. Sure - many millenials haven't heard of it yet, but that's beside the point. Everyone has heard of Walmart but they struggle online. In your anecdote, 30% have brand recall which isn't as bad as you make it seem. The problem with Jet as it currently stands is that it isn't very compelling for word of mouth. I've used it and had a decent experience but never told anyone about it. Anyway, Walmart can put more muscle behind it, likely deliver a better service and push a cooler brand than their own. At the same time - they can utilize their store inventory and distribution/shipping and potentially drive consumers to pick up in store same day (and drive more in-store revenue). You make an assumption about them folding it in. I don't think they will, but if they do it will be a waste. Also - your note about people you know using Amazon for all shopping needs doesn't mean that it will always be that way. Do you expect everyone to roll over because Amazon is the leader? Should nobody bother competing? - Amazon has a LOT of fake reviews. - They're pissing off merchants by competing directly with them. - They often ship other merchant's products instead of your own if it's closer to the user. I'm not that bullish on Jet either, but I wouldn't underestimate Walmart.
deleted 10y ago
[deleted]
camelNotation 10y ago
Walmart has something Jet.com needs: one of the world's most advanced product delivery systems. Every Wal-Mart store is a distribution center waiting to happen. They are enormous and they are everywhere. Jet.com has something Wal-Mart can use to rocket its online presence forward: advanced online infrastructure, patents, a wealth of technology experts, and users. Together, Wal-Mart can beat Amazon at its own game by doing what Amazon is already doing (building more, smaller DCs everywhere) using what they already have (massive retail locations everywhere).
- desireco42 10y ago
  I am a little skeptical on Jet side, experts, patents etc. I think Walmart probably has better experts, but like someone said, this is mostly lead by corporate and I expect this to turn out to be terrible decision. But what do I know :)
  - bluGill 10y ago
    WalMart has experts, but they are already busy current problems. To get into online needs experts who spend their time on the problem - but WalMart cannot afford to let their current experts leave their current jobs or the company would go under. That isn't to say WalMart can't (or shouldn't) transfer some of their experts to Jet, and some Jet experts elsewhere. Just that they cannot afford to lose all their experts in the core business to the online dream. I too expect this to turn out to be a terrible decision, but I've been proven wrong on my expectations before. Reasons like the above is generally why.
- kevin_thibedeau 10y ago
  Wal-Mart's delivery system is tuned to service a few thousand stores plus whatever scraps walmart.com takes in. It remains to be seen if they can use Jet to their advantage or destroy it by borgifying their management with Wal-Mart graybeards.
- rpgmaker 10y ago
  I hope it works out for them. Amazon's age it's showing, their site it's clunky and unresponsive at times. Sellers misrepresent their wares all the time. They're outright banning some products which, for a store, it's a very opinionated move if you ask me. And don't give me the "the Apple Store doesn't carry the Fire" crap, Amazon bills itself as the "everything store". It works sure and customer service it's still miles ahead the competition (this is expensive and something that it's always overlooked by the competition) but they're neglecting the storefront by trying to be "everything".

HillaryBriss 10y ago

Here's an assessment of how Walmart was doing against Amazon -- from the year 2000: ... the case for Amazon getting crushed by Wal-Mart doesn't stand up when you do some side-by-side comparing of their Web sites. What's wrong with Walmart.com? Put simply, it settles for taking orders for the products people come looking for rather than enticing them to buy things they hadn't even thought of buying. http://www.bloomberg.com/news/articles/2000-12-17/walmart-dot-com-vs-dot-amazon-this-race-isnt-even-close http://www.bloomberg.com/news/articles/2000-12-17/walmart-do... It's 16 years later and Walmart still hasn't been able to compete with Amazon very effectively.

antisthenes 10y ago
Amazon sells more than the next 10 biggest websites, combined. It's useful to note that those 10 biggest websites are operated by large retailers with a physical presence, so it doesn't necessarily mean they're in trouble (walmart, macy's, home depot, etc.) But the gap between Amazon and the next biggest e-tail site is huge. It's more of a canyon than a gap, really.
- smitherfield 10y ago
  eBay isn't even one of the top 10 anymore? How the mighty have fallen, if that's the case.

swalsh 10y ago

If you're a cynical person that is an easy thought... but something tells me a 3B acquisition of a company that is losing money in so many places isn't a decision taken lightly. A public company like Walmart, there's some people doing some math here.

sbierwagen 10y ago
A public company like Walmart, there's some people doing some math here. http://www.zdnet.com/article/yahoo-reports-another-big-loss-and-tumblr-write-down/ http://www.zdnet.com/article/yahoo-reports-another-big-loss-... Yahoo also reported that it's writing down $482 million in charges related to the declining value of Tumblr, the social-blogging service that Yahoo acquired for $1.1 billion in 2013. http://www.theverge.com/2015/7/8/8910999/microsoft-job-cuts-2015-nokia-write-off http://www.theverge.com/2015/7/8/8910999/microsoft-job-cuts-... and the company is writing off $7.6 billion related to its acquisition of the Nokia phone business. That's more than the $7.2 billion Microsoft paid for Nokia's phone business last year. Public companies "do some math", but that doesn't mean their math is always right. Acquisitions are bets, and bets don't always pay off.
- deleted 10y ago
  [deleted]
- coryfklein 10y ago
  It seems you're pointing out the obvious: that no investment 100% guarantees any sort of return. Surely "the math" discussed internally at Walmart includes both: 1) A calculation of risk/reward on this investment 2) Determining whether result of 1 appropriately reflects Walmart's risk profile. Given that Walmart decided to acquire, it is safe to assume this investment's risk of loss falls within Walmart's investment profile.
- mark-r 10y ago
  My own observation is that the bets hardly ever pay off. Microsoft/Nokia is a great example but there are plenty of others. Maybe it's just confirmation bias, but I have trouble thinking of one counter example.

deegles 10y ago

Would $500m/yr even be enough? I guess they could leverage their existing distribution network and stores...

__derek__ 10y ago

Walmart.com has much higher sales than Jet. It already is huge online, even if it's not Amazon huge. If anything, this is about pruning competition and buying potentially useful IP.

mandeepj 10y ago
>even if it's not Amazon huge are your serious? Walmart's revenue was $482.1[0] billion in 2015 and amazon's was $107b[1] [0] - https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=walmart+revenue https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e... [1] - https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=amazon+revenue https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e... edit - sorry, i missed the .com part
- chockablock 10y ago
  Parent referred to walmart.COM. Walmart online sales only $13B/yr, per http://fortune.com/2016/05/20/the-silver-lining-in-walmarts-slowing-e-commerce-growth/ http://fortune.com/2016/05/20/the-silver-lining-in-walmarts-...
- __derek__ 10y ago
  Even though I meant Wal-Mart e-commerce, this is a good reminder that the company remains huge despite concerns about its online sales.
rogerdpack 10y ago
Honest question: do any readers here really order from walmart.com ? I am surprised they sell much at all, based on how much I personally have ordered from them (never).
- gtk40 10y ago
  I do. I price compare on larger purchases and have found Walmart.com cheaper occasionally. I've even done stuff from Sears, which has a multi-vendor marketplace as well. Both tend to have an addition 5-10% with Discover Deals as well, which I can't normally get with Amazon.

Maarten88 10y ago

> keep dumping $500M/yr for it at a loss or what? I think building Amazon wasn't cheap too. Amazon made losses for most of two decades straight, so Walmart dumping massieve money into building a competitor, with the insights of today, might still be cheap, relatively.

sjg007 10y ago
All shopping is going to be online and delivered for the same price as going to a big warehouse store. With the dash buttons and the third party integration Amazon is too big to ignore.
rpgmaker 10y ago
Amazon turned a "small" profit just the other day. Overall I think it's still fair to categorize it as a money losing venture (so far).
gscott 10y ago
Walmart being a established multi-national company they can't really have unprofitable divisions or unprofitable quarters. This will be equivalent to Yahoo's Tumblr acquisition (a failure).... no amount of heads exploding blue dust will save this.

exclusiv 10y ago

Jet.com is a disaster of a company fundamentally. However, it does make sense for a company like Walmart. I don't know about 3B, but Jet is a drastically cooler brand for them in their ecommerce battle esp. among millenials. Jet was previously fulfilling many orders from Walmart and now they can build a seamless integration to deliver competitively priced items quickly from the stores.

antisthenes 10y ago
> I don't know about 3B, but Jet is a drastically cooler brand for them in their ecommerce battle esp. among millenials. Every time I see a comment like this, it really makes me wonder who these mythical millenials are. I work in a company with 11 millenials out of 16 employees and NONE of them have even heard about Jet, let alone bought from it. Now that Jet was acquired and will be quietly folded into Walmart, it's more than likely they never will. They use Amazon almost exclusively for all of their shopping needs. Not sure where you got the notion that 'Jet is a drastically cooler brand'. It seems false both from anecdata I have and from the design of their website, which looks like a cheap knockoff of Amazon.
- arcticfox 10y ago
  > will be quietly folded into Walmart There are some huge assumptions built into your comment.
- duderific 10y ago
  I think the GP probably meant that Jet is drastically cooler than Walmart, not Amazon.
- exclusiv 10y ago
  I meant Jet is a much cooler brand than Walmart. Sure - many millenials haven't heard of it yet, but that's beside the point. Everyone has heard of Walmart but they struggle online. In your anecdote, 30% have brand recall which isn't as bad as you make it seem. The problem with Jet as it currently stands is that it isn't very compelling for word of mouth. I've used it and had a decent experience but never told anyone about it. Anyway, Walmart can put more muscle behind it, likely deliver a better service and push a cooler brand than their own. At the same time - they can utilize their store inventory and distribution/shipping and potentially drive consumers to pick up in store same day (and drive more in-store revenue). You make an assumption about them folding it in. I don't think they will, but if they do it will be a waste. Also - your note about people you know using Amazon for all shopping needs doesn't mean that it will always be that way. Do you expect everyone to roll over because Amazon is the leader? Should nobody bother competing? - Amazon has a LOT of fake reviews. - They're pissing off merchants by competing directly with them. - They often ship other merchant's products instead of your own if it's closer to the user. I'm not that bullish on Jet either, but I wouldn't underestimate Walmart.

deleted 10y ago

[deleted]

camelNotation 10y ago

Walmart has something Jet.com needs: one of the world's most advanced product delivery systems. Every Wal-Mart store is a distribution center waiting to happen. They are enormous and they are everywhere. Jet.com has something Wal-Mart can use to rocket its online presence forward: advanced online infrastructure, patents, a wealth of technology experts, and users. Together, Wal-Mart can beat Amazon at its own game by doing what Amazon is already doing (building more, smaller DCs everywhere) using what they already have (massive retail locations everywhere).

desireco42 10y ago
I am a little skeptical on Jet side, experts, patents etc. I think Walmart probably has better experts, but like someone said, this is mostly lead by corporate and I expect this to turn out to be terrible decision. But what do I know :)
- bluGill 10y ago
  WalMart has experts, but they are already busy current problems. To get into online needs experts who spend their time on the problem - but WalMart cannot afford to let their current experts leave their current jobs or the company would go under. That isn't to say WalMart can't (or shouldn't) transfer some of their experts to Jet, and some Jet experts elsewhere. Just that they cannot afford to lose all their experts in the core business to the online dream. I too expect this to turn out to be a terrible decision, but I've been proven wrong on my expectations before. Reasons like the above is generally why.
kevin_thibedeau 10y ago
Wal-Mart's delivery system is tuned to service a few thousand stores plus whatever scraps walmart.com takes in. It remains to be seen if they can use Jet to their advantage or destroy it by borgifying their management with Wal-Mart graybeards.
rpgmaker 10y ago
I hope it works out for them. Amazon's age it's showing, their site it's clunky and unresponsive at times. Sellers misrepresent their wares all the time. They're outright banning some products which, for a store, it's a very opinionated move if you ask me. And don't give me the "the Apple Store doesn't carry the Fire" crap, Amazon bills itself as the "everything store". It works sure and customer service it's still miles ahead the competition (this is expensive and something that it's always overlooked by the competition) but they're neglecting the storefront by trying to be "everything".