Walmart To Discontinue Jet, Which it Acquired for $3 Billion in 2016 (techcrunch.com) 38
phalse phace shares a report: So much for Walmart's big and expensive effort to take on Amazon with a digitally-native brand. Amid the coronavirus crisis and its impact on the retail industry, today the retail giant quietly announced in its quarterly report that it would be discontinuing Jet.com, the online-only marketplace that it acquired when it was just over one year old for $3 billion (plus $300 million in earn-outs over time), as it struggles to bring its e-commerce operations into that black after reportedly seeing a loss of $2 billion in the division in 2019 and shifting how to deliver its e-commerce strategy: by betting on giant stores, rather than online warehouses, as the hubs of its online delivery model. Jet.com's fate was disclosed as part of a Walmart's Q1 earnings report, in which the company said it saw growth of less than 10% in its core US market, and said that it would be withdrawing guidance for fiscal 2021. The company tried to put a positive spin on the news despite those numbers highlighting how it helped its digital transformation. "Due to continued strength of the Walmart.com brand, the company will discontinue Jet.com," the company said in a short statement. "The acquisition of Jet.com nearly four years ago was critical to accelerating our omni strategy."
Alternate take (Score:5, Informative)
I think it is really reasonable to say, they probably folded a lot of whatever Jet.com did into Walmart.com...
Walmart has a pretty reasonable online store these days, where you can easily order something either for pickup at a store or to be shipped to you. For some things they are a decent alternative to Amazon at this point, and it could well be that Jet.com helped make that happen.
Re: (Score:1)
Re: (Score:1)
The leadership of Jet.com had already taken over quite a lot of the technical leads inside Walmart about a year after the acquisition. The dead weight was shifted, some people moved to Bentonville.
This is nothing really, other than laying down a brand in favor of another brand.
Re: (Score:2)
I think it is really reasonable to say, they probably folded a lot of whatever Jet.com did into Walmart.com...
Walmart has a pretty reasonable online store these days, where you can easily order something either for pickup at a store or to be shipped to you. For some things they are a decent alternative to Amazon at this point, and it could well be that Jet.com helped make that happen.
Agree, I've been ordering more from Walmart lately than Amazon. I didn't even know Walmart owned Jet, never ordered from them. So it would make sense for Walmart to leverage the extremely well known Walmart brand combined with the Jet platform.
Re: (Score:1)
...and it could well be that Jet.com helped make that happen.
They paid for one thing and one thing alone: a catchy, three-letter URL. The discontinuation of the site reveals exactly how much value it's been to them.
Re:Alternate take (Score:5, Insightful)
No, they also bought technical expertise in e-commerce. Walmart online was a joke of a site, now things are far better Rather than try to figure it out themselves, they decided to buy the expertise they needed to actually run their online store and handle online orders efficiently. The three-letter domain was a bonus because really, you don't go to jet.com just to shop at walmart.com.
Re: (Score:1)
No, they also bought technical expertise in e-commerce.
They could have gotten that part anywhere; it was hardly what the premium was shelled-out for.
Re: (Score:2)
I think it is really reasonable to say, they probably folded a lot of whatever Jet.com did into Walmart.com...
Walmart has a pretty reasonable online store these days, where you can easily order something either for pickup at a store or to be shipped to you. For some things they are a decent alternative to Amazon at this point, and it could well be that Jet.com helped make that happen.
If only Walmart could find a way to fix their stupidly broken online product search, then maybe. It only works for the most basic of items. If it weren't for that, I'd buy from them more than from Amazon.
Re: (Score:2)
That was also easily done 8 years ago. Jet did not help them do that.
Totall Worth It! (Score:2)
Yup, that $3 billion loss totally makes us more valuable because we learned a lesson the hard way, showing us what not to do in the future. Totally a positive outcome, no reason to lower stock prices or future valuation!
Re: (Score:2)
"Due to continued strength of the Walmart.com brand, the company will discontinue Jet.com."
Re:Totall Worth It! (Score:4, Insightful)
Buy a competitor before it eclipse you.
Use its assets to strengthen your branded offerings.
Allow old brand to die.
Discontinue and sell off the remaining assets that are redundant.
When I was a consultant, I was often the Consultant that survived the merger/buyout/leadership change... At least to a point where after things settled, where I would position myself to leave for a new project. However, no matter what the CEOs or the Marking says. One Company is going to Take over the other one. The one that has been taken over will be stripped of anything useful and let the the rest rot for a bit, then get cut.
Re: (Score:2)
It's always funny to read a company claim 'oh, we aren't going to meddle with our acquisition in any way and our employees will carry on and shouldn't worry either'. No, they are acquiring for a reason and anyone vaguely in overlap should be concerned. Either they are acquiring what they view as a more solid product to replace their own team in which case current employees need to worry, or they are buying the brand name, in which case the acquired employees should worry.
The game becomes guessing what the e
Or they aquire a vendor/division (Score:3)
For very large companies, it can make sense to aquire a company which has a lower headcount and it pretty much becomes a division of the larger company. I don't know that Google got rid of a bunch of YouTube employees - some managers probably.
One company I worked for got acquired and nothing much changed over the next three years. They were buying a product like we made. We made a security scanning software; we made security scanning software. They were spending a lot every year to license similar softwa
Re: (Score:2)
Yes, an acquisition of a completely complementary company can make sense to carry on both (except for HR and Legal and such...). For example nVidia's acquisition of Mellanox, engineers on neither side have much to worry about.
However, as the combined nVidia/Mellanox goes to acquire Cumulus, then if you are a software developer for Onyx (Mellanox's 'in-house' switch software) then you should rightfully be concerned that you are now considered redundant. Sure, you have a distinct strategy from Cumulus and end
Re: (Score:2)
In my experience most of the senior management was carried over, with the CEO becoming the head of the division, which was located in a different state than the company that aquired us. Over the next three years, several of the senior people moved on to other jobs, as people do.
Initially, they needed to keep the senior people during the transition - the CIO of the aquiring company didn't instantly know everything about the newly acquired company. Over time, fewer of those people were needed and by happy c
More succinct: Dell acquires Belkin (Score:2)
More succinctly:
Dell acquires HP: Layoffs ahead
Dell acquires Belkin or Fellowes: Belkin keeps going as it was
Re: (Score:2)
Re: (Score:1)
Not sure, I only ever bought 1 thing from them, a 1060 GTX with a 20% off coupon before the bitcoin bubble made the prices go crazy. Got it for $230 shipped near launch. At the time they were going for around $270-$300 so a good deal.
Re: (Score:2)
So a three digit domain that has no relevance to the product is worth $3,000,000,000.00
They should have set up walmart.com/online (or something) and saved all that money. I have no idea what jet.com did but Walmart could do it in-house for less than $3 billion.
At least now they can sell the domain to a company that makes jets or something.
Re: (Score:2)
Then it was purchased by Rakuten (a stupid company, we deal with them and I can tell you from a technology-standpoint they are inept) purchased buy.com. For a while they let it stay the same but now buy.com is no more, you are just dumped on Rakuten. "What's a Rakuten" is what we get from people when we bring it up. What a stupid brand
Re: (Score:2)
I wish my company could let go of sunk costs (Score:3)
My first thought when seeing this story is how refreshing it is to see a company write off loses instead of doubling down. My company is currently in a three year long train wreck with a vendor who has consistently failed us. But we have invested millions so we feel compelled to keep going along with it. Right now is the third time in a couple years we have reviewed the relationship and decided to keep charging forward.
Since it is impossible to always be right it is great when companies can admit their mistakes.
Re: (Score:1)
Since it is impossible to always be right it is great when companies can admit their mistakes
Donald Trump would beg to differ.
Re: (Score:2)
Not every company can afford flush 3 billion down the drain and write it off to lessons learned .... HOWEVER I will say this about Jet .. never heard of it .. so if you don't advertise something you paid 3 billion for WTF ???? Walmart is seriously Fd-up. I've known managers and people that worked in the corporate office in Bentonville and everyone has said the same thing it's a dysfunctional train wreck waiting to happen.... right now they make so much from their stores that they can do all kinds of
Re: (Score:2)
Of course, in this case, it seems perfectly likely that the acquisition was getting the underlying engineers/platform and that they would shutdown the brand, in which case it probably went mostly according to plan.
But I hear you, as I know all too well what it is like for a company to acquire and utterly fail for a decade and refuse to admit defeat.
Generally we have to wait for all the key decision makers to get out of the picture. Then the blameless executives can kill it and in no way take the blame for t
Re: (Score:2)
Generally we have to wait for all the key decision makers to get out of the picture. Then the blameless executives can kill it and in no way take the blame for the initial decision.
This is the primary reason we are starting to see light at the end of the tunnel. We still have the original CEO, but a new CFO and COO in charge now (one of them in place primarily by the board). That is the only reason we have started seriously considering other options. No real movement yet, but there is real preparation for movement.
We shall see.
Re: (Score:2)
Is it even a mistake? I mean, a $3 billion purchase that jump started their e commerce division by a year, that could be amazing. I'm sure their technology and know how got folded into walmart.com.
Amazon-Competitor without actually competing (Score:3)
We tried to list on Jet and were not accepted. You needed to acknowledge an order within 30 minutes and had to meet even more strict delivery times than Amazon. That would have meant increased product prices. Don't want it delivered overnight? Well, you don't have a choice - so you must buy the product at a higher price since free shipping doesn't exist and we had to bake overnight shipping into the only price you pay.
With that said, Jet had a niche (not one I agree with, just by definition they had a niche) but was definitely not comparable to Amazon.
Never made sense (Score:2)
The acquisition never made sense to begin with. I never could find anyone who could explain it in an elevator speech. If you can't sum up why your spending a few billion dollars in a 30 seconds sound bite you don't have a use case. More to the point, you should be able to do so with a third party that isn't worried about keeping their job and who is empowered to give honest feedback.
This likely suffered from an echo chamber effect inside Walmart where no one was willing to say it doesn't make sense due for
I'd say fire your marketing director (Score:2)
Considering that now, 4 years later, I'm a reasonably literate individual who's NEVER heard of Jet's association with Wal-Mart, nor of Jet at all.
I mean, I don't shop at Wal Mart much, so maybe they pushed it as in-store branding but seriously: I've NEVER heard of it.
Re: (Score:2)
Re: (Score:2)
Another middleman gone, good. (Score:2)
No loss (Score:1)