Kosmix deal raises question, now what?

Walmart’s acquisition of Kosmix will shorten the company’s social media learning curve and open the door for some intriguing new possibilities, even if those possibilities aren’t quite clear just yet.

What is clear is Walmart is intent on being a multichannel operator, and social media is viewed as the new Holy Grail when it comes to engaging with customers. It is an opportunity that Walmart can’t afford to miss, so it did what big companies tend to do when they discover a deficiency in their operations. It went looking for an acquisition to shore up its capabilities and found Kosmix.

So what does Kosmix do?

According to founders Venky Harinarayan and Anand Rajaraman, Kosmix employs an innovative technology platform that searches and analyzes connections in real-time data streams to deliver highly personalized insights to users. The platform powers TweetBeat, a real-time social media filter for live events that recorded five million visits last month; Kosmix.com, a site to discover social content by topic; and RightHealth, one of the top three health and medical information sites by global reach.

Harinarayan and Rajaraman are regarded as pioneers of online shopping who founded a company called Junglee that was acquired by Amazon.com in 1998, back when dotcom startups were fetching lofty valuations. Walmart didn’t disclose what it paid for Kosmix, but there is a lot of chatter in the marketplace around a second dotcom bubble except this time mobile is the source of exuberance.

“We are expanding our capabilities in today’s rapidly growing social commerce environment,” said Eduardo Castro-Wright, Walmart’s vice chairman. “Social networking and mobile applications are increasingly becoming a part of our customers’ day-to-day lives globally, influencing how they think about shopping, both online and in retail stores. We are excited to have the Kosmix team join us to accelerate the development of our social and mobile commerce offerings.”

Accelerate is the operative word there. As Walmart chairman Rob Walton noted in the company’s annual report, one of his father’s favorite quotes was, “To succeed, stay out in front of change.” Walmart hasn’t exactly been the tip of the spear when it comes to all things digital, but the company has made some significant strides the past few years, including the restructuring that took place last year and put former Walmart U.S. president and CEO Eduardo Castro-Wright in charge of the new Global eCommerce organization.

Say what you will about Castro-Wright, and plenty have, the guy gets things done and could be exactly what Walmart needs to bring a sense of urgency to the development of Walmart’s multichannel capabilities. It will also require him to be a good listener as the Kosmix founders and their team will be joining Walmart as part of a newly formed group called @WalmartLabs. The group will be expanded and based in Silicon Valley where it will create technologies and businesses around social and mobile commerce that will support Walmart's global multichannel strategy.