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ECT News Community   »   E-Commerce Times Talkback   »   Re: Kmart and Wal-Mart Move On After E-tail Defeat



Re: Kmart and Wal-Mart Move On After E-tail Defeat
Posted by: ECT News 2001-07-30 14:51:49
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Whatever the cause, Walmart.com and BlueLight.com have not lived up to expectations. Not
so unexpectedly, Kmart announced it would buy all shares of BlueLight.com that it does not
already own, and at almost the same moment, Wal-Mart announced its own intention to buy
all minority interests in Walmart.com.


Blame it on a sluggish economy, a stock market that doesn't seem to really like dot-coms,
or even a fickle consumer base that still likes to push shopping carts down the aisles and
touch the linens. Whether the attempt by Kmart and Walmart to be real players in the New
Economy was a noble experiment or a true hope, last week each essentially admitted some
level of defeat in the electronic marketplace.


Re: Kmart and Wal-Mart Move On After E-tail Defeat
Posted by: Robert 2001-07-30 15:12:04 In reply to: ECT News
Seems like not quite the whole story to declare these spinouts/spin-ins to be failures and symptoms of poor management decisions.

Alternative interpretation:

Premise:

1. Walmart should build a major league presence online, offering most/all of its standard inventory items, as well as other customer service features.
- This was definitely 'conventional wisdom' when the matter was contemplated in '99.
- Still a 'good idea', inferring from your article.

2. Such a presence--from a dead stop--including the requisite back-end integration, costs well into the eight figures.

Then...

Why not take in tens of millions in cheap VC, offering no more than a minority interest?

If things [capital markets] stay rosy, IPO that business unit, thereby having released and created tremendous financial value to the parent corp.

If/when things crater, buy out the twitchy investors at pennies on the dollar. The parent now owns [presumably] the technology investment, customer lists, e-business experienced management, brand equity, etc.

When making the decision to do this in the late nineties, Walmart bought an arguably underpriced option on either of these positive outcomes.

Maybe not such a bad decision, after all?

Jump to:
How important is social media to the success of your business?
Highly -- Social media is essential to our business model.
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Minimally -- We're on social media because that's expected, though it's influence on our success is negligible.
Not at All -- Social media is not useful to our business.