Walmart is trying to roll onto Amazon's turf

One of the most fascinating rivalries going on in tech right now isn’t between Apple and Microsoft. Or Google and Facebook. It’s actually the battle for online retail dollars between Walmart and Amazon.com, a fight for the hearts and minds of the world’s shoppers.

Through its Walmart Labs unit, the giant Arkansas retailer is investing heavily in e-commerce as it plays a game of catch-up to Amazon.

Walmart is still the bigger of the two companies, with a market value of $207 billion to Amazon’s $89 billion. And because of that you might think it would have the upper hand at the negotiation table, right?

But as Reuters reports today, Walmart has lost out on two big possible acquisition deals to Amazon.com in the past few years. The most recent one occurred this week when Walmart passed on an opportunity to buy warehouse robot maker Kiva Systems, which Amazon gobbled up for $775 million.

A Kiva robot in action

Citing a source familiar with the situation, Reuters reported that Walmart passed because “it did not see an attractive return on the investment.”

In the same report, Reuters noted that Walmart went after Quidsi — operator of Diapers.com and other e-commerce sites — but lost out to Amazon.com which purchased the company for more than $500 million in 2010.

Certainly, Walmart is behind in e-commerce. And one way that it can get into the game is through acquisitions, gobbling up either tech talent (which it has already done), big niche players (like a Quidsi) or pure technology plays  (Kiva). Walmart has been making a number of buys in recent months, but they’ve typically been smaller upstarts like Small Society, One Riot, Kosmix and Grabble.

Given that, all I have to say is watch this space. With two well known and well capitalized giants going at one another, I anticipate plenty of fireworks in the coming months.

The rivalry between the two companies has come and gone over the years. Back in 1998, Walmart sued Amazon for stealing trade secrets. At the time, Walmart issued this statement:

“The purpose of the lawsuit is to bring an immediate stop to what appears to be a wholesale raiding of its proprietary and highly confidential information systems by Amazon.com and others through the use of former Wal-Mart associates.”

That was just three years after Amazon.com launched, and it showed the disdain (or  fear) for the young upstart. It also occurred just before the dot-com implosion, a period that nearly killed Amazon. Walmart could have used the time to plant its flag in e-commerce. But it didn’t, and now 10 years later the fight appears to be back on in a big way.

The question now is whether Amazon.com is just too big to kill off.

Previously on GeekWireJeff Bezos on innovation: Amazon ‘willing to be misunderstood for long periods of time’

 

Comments

  • http://highlyframeable.com/ Nick White

    These two will certainly have a fierce and public rivalry for the foreseeable future. 

    If competition heats up (further) in this space, it will put pressure on WMT and Amazon’s already thin margins. Amazon claims to be comfortable operating with thin margins, and they certainly have experience doing so. Yet I wonder whether there can be a clear winner in this space.

    • http://aallison.com/ Andrew Allison

       Us!

  • http://www.retailpitch.com/ Brad

    The problem is whether online or in retailers, you are still helping the big box. WE created the commerce network to help small retailers and brands connect. http://www.retailpitch.com

  • Guest

    I imagine a Walmart-Amazon tech battle to be rather like this mixed martial arts fight, with Walmart as Laucaro Tucas and with Amazon as Chris Clements: http://www.youtube.com/watch?v=75cpv9PQkx8&feature=related

  • Manov rao

    Largest section of online shopping for electronics.

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