jasens: @WalmartLabs: How a Scrappy Search 2.0 Startup Became The Future of Walmart

Tuesday, August 30, 2011

@WalmartLabs: How a Scrappy Search 2.0 Startup Became The Future of Walmart

In April, social media startup Kosmix was acquired for $300 million by retailing giant Walmart. Kosmix had built a Semantic Web platform called the Social Genome, which organized social media data. The platform powered 3 products: TweetBeat, a real-time social media filter for live events; Kosmix.com, a topic-based search engine; and RightHealth, a health search portal. The URLs for TweetBeat and Kosmix now re-direct to a new site called @WalmartLabs.

The tagline of @WalmartLabs is "Social + Mobile + Retail" and it's an indicator of where Walmart wants to go with the technology it acquired. Walmart wants to tap into social data - for example from Twitter - and entice mobile phone toting customers to its stores. Walmart also wants to beef up its online operations, traditionally a laggard compared to Amazon.com.

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Kosmix was founded in 2005 by Venky Harinarayan and Anand Rajaraman. The two had previously built and sold a company to Amazon.com in 1998, called Junglee. That was a comparison shopping search engine, amongst other things.

Kosmix started out as a "vertical search" product in 2005/06, with health as the proof of concept. It was world class search technology, but in many ways Kosmix was conducting its own search - for the right business application.

We profiled a group of similar "search 2.0" companies at the end of 2006. There was no doubting the class of Kosmix though, even in such a crowded field. In 2008, ReadWriteWeb named Kosmix one of our Top 10 Alternative Search Engines.

Kosmix in October 2005, courtesy of the Wayback Machine

It was the rise of social media, with its noise and need for real-time analysis, that finally opened up business opportunities for Kosmix. Also key was mobile technology and a return to the founders' roots in online shopping. It all led to the $300 million acquisition by Walmart this year.

An article in Mercury News explains how social media data from the ex-Kosmix product might be used:

"That information could be used to steer shoppers to products based on their hobbies, for instance. Or the Kosmix technology could be used to analyze Twitter tweets in neighborhoods surrounding specific Walmart stores. That intelligence could help store managers decide on inventory. Should they expand their sporting goods department or maybe their video gaming offerings?"

It remains to be seen how well @Walmart capitalizes on the trends of social media and mobile, but in Kosmix's founders they certainly have the right people leading this online push. As Anand Rajaraman wrote in his announcement of the acquisition in May:

"We are at an inflection point in the development of ecommerce. The first generation of ecommerce was about bringing the store to the web. The next generation will be about building integrated experiences that leverage the store, the web, and mobile, with social identity being the glue that binds the experience."

This is a wonderful startup success story. But do you think Walmart will make the best of Kosmix's technology and online shopping nous? Let us know in the comments!

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