Walmart Drops $3.3B on an Amazon Killer

Acquisition of Jet.com announced Monday
By Kate Seamons,  Newser Staff
Posted Aug 8, 2016 8:50 AM CDT

(Newser) – It's a year-old startup that wasn't yet profitable. Now Jet.com enters the books as the largest-ever e-commerce startup acquisition. Walmart announced Monday that it would purchase the site for $3.3 billion, with all but $300 million of that in cash; the rest takes the form of Walmart shares, reports the Wall Street Journal. The move is a major salvo in Walmart's battle against Amazon. How the deal—which will preserve Jet.com but beef up Walmart.com using its software—is being framed:

  • Walmart has quite a hill to climb. Though Walmart.com launched in 2000 to Amazon.com's 1994, Walmart's online sales amounted to $14 billion in 2015, to Amazon's $107 billion, notes the Journal. Including brick-and-mortar sales, though, brings Walmart's revenue to $482 billion. In a year, Jet.com reached a run-rate of $1 billion in revenue.

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  • But at Business Insider, Hayley Peterson delves into three reasons—customer base, distribution center potential, and Jet.com's shipping prowess—why the acquisition could become a "nightmare" for Amazon, proclaiming "everyone is underestimating Walmart's ability to crush Amazon."
  • At Reuters, Jennifer Saba writes of some of the things that are holding Walmart back, among them, Amazon's move into Walmart's turf with expanded fresh-food delivery.
  • TechCrunch has some interesting details on Jet.com founder Marc Lore, whose prior business, Quidsi, was scooped up by, yes, Amazon for $545 million. Lore could walk away with $750 million from the Jet.com deal; he'll remain at the helm.
  • Your bit of bar trivia: Jet.com takes the e-commerce startup sale record from Zulily, which was acquired by QVC for $2.4 billion, reports recode.
(Read more Walmart stories.)

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