Walmart is quietly building a social media powerhouse with Walmart Labs

Posted In Mobile Web - By Ryan On Wednesday, September 14th, 2011 With 0 Comments

Heard of Walmart? Of course you have. Who hasn’t? They’re the enormous multi-national discount retail chain that’s unmatched in the sheer scale of their warehousing, distribution and volume of products. That’s all nice and well but have you heard of Walmart Labs? If you haven’t, you’re not alone. But don’t let this lack of mainstream awareness fool you. Walmart is quietly building a social media powerhouse in Silicon Valley.

Walmart Labs is “an innovative fusion of retail, social and mobile” according to their website. They are “a group comprised of the brightest technologists and businesspeople in the industry, excited about the limitless opportunities that this next generation of commerce will bring to billions of people around the globe, all in an effort to help them save money and live better”.

While this may at first sound like the typical jargon-packed mission statement served up by any of the other million tech startups, the reality is that Walmart Labs is achieving their aim of bringing a bunch of bright people together. They’ve just closed their latest acquisition, a mobile advertising firm called OneRiot. OneRiot specialises in delivering ad targeting based on careful analysis of public social streams from Twitter and other social services, and then pinpointing the audience demographics, influence and real-time conversations for advertisers.

So why would Walmart care about mobile advertising technology? According to Senior Vice President of Walmart Labs, Anand Rajaraman, “At the core of what we do is the Social Genome, which enables us to connect millions of consumers with the best products based on their interests at any given moment. The OneRiot technology will enrich the Social Genome”. You can see why this would benefit one of the world’s largest offline retailers.

Walmart kicked off the Walmart Labs team by acquiring a company called Kosmix five months ago, headed up by Venky Harinarayan and Anand Rajaraman. Heard of them? They just happened to build a price comparison site in 1996 that was sold to Amazon two years later for $250 million. They both spent time at Amazon and ended up working on the technology behind Mechanical Turk before moving on to form Kosmix, which Walmart bought for a whopping $300 million. That’s half a billion in the short space of 13 years. Not a bad way to earn a living.

So where to from here – and how is Walmart hoping to recoup their $300 million? According to Rajaraman, “Walmart is the biggest retailer in the world but they are not the number one player in ecommerce – Amazon is. About a year ago, Walmart decided that e-commerce is a strategic priority. It’s not like they had not been investing in ecommerce, but they said, “It’s time to go to the next level”. When you do that, what’s important is to look at how the world has changed. Are there some assumptions that can be challenged, or some trends that can be used, to leapfrog the 800-pound gorilla in ecommerce?”

So, ladies and gentlemen, the match of the decade on Pay Per View tonight is Walmart vs Amazon. It should shape up to be a riveting fight and test of wills. Both have bottomless pockets. But will Walmart’s offline bricks-and-mortar business give them an easy edge in dominating the online space, or will Amazon’s online track-record prove too big a dragon for Walmart to slay? Only time will tell. In the meantime, sit back and enjoy the personalised discounts that will be coming to a mobile phone near you very soon.

About - With at least 20 phones tucked away in drawers around the house and office, Ryan is a buy-to-try mobile consumer and loves playing with new handsets. Right now he's stuck on the iPhone 4.

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