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Friday, November 11, 2011

Why Did WalMart Buy Kosmix?

This was a question asked on Quora - "What do people think of WalMart's acquisition of Kosmix?".

The short answer is - because it made strategic and financial sense. Here is the answer I wrote on Quora, as a start -

(disclosure, I used to work at Kosmix).
1) Kosmix, or WalMart Labs, is already on the way to earning their purchase price back for WalMart. Without any social media or online marketing of any sort (SEO, SEM, you name it), currently gets between 40 - 70 MM monthly visitors. The WalMart Labs team can easily get multiples of this number without breaking a sweat. (Kosmix operated the second largest Health website in the US, and some other very high volume web properties - they know how to get traffic).

2) Kosmix has built categorization technology that will be very useful for WalMart (lots of folks have written about this, so I won't repeat). This tech will help WalMart use social media to streamline operations, offer deals, and increase revenues.

By the way, the OneRiot acquisition ties right into the points above - seems WalMart has a large gameplan they're putting into action quite fast.

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