Walmart Acquires Vizio in $2.3 Billion Deal to Boost Ad Business

The largest U.S. retailer aims to expand its media business and compete with Amazon’s growing ad segment.

In a move to bolster its high-profit ad business, Walmart has announced its acquisition of TV maker Vizio for $2.3 billion. The deal, which was revealed alongside Walmart’s fourth-quarter earnings report, positions the retail giant to tap into Vizio’s SmartCast Operating System and expand its advertising reach. With this strategic move, Walmart aims to compete with Amazon’s growing ad segment and further diversify its revenue streams.

Walmart’s Push for Higher Profits and Media Expansion

Walmart has long been a major seller of Vizio devices through its Walmart and Sam’s Club stores. However, with the acquisition of Vizio, the retail titan sees an opportunity to not only strengthen its partnership but also leverage Vizio’s customer-centric operating system to enhance its ad business. Walmart Connect, the company’s media business, has been a focus for the retailer as it offers higher profit margins compared to traditional grocery and clothing sales. In the fourth quarter, Walmart’s advertising sales grew by an impressive 22%.

Vizio’s SmartCast Operating System and Advertising Potential

Vizio’s SmartCast Operating System allows users to stream free ad-supported content on their TVs, providing a lucrative opportunity for Walmart to tap into the rapidly scaling advertising market. Seth Dallaire, executive vice president and chief revenue officer of Walmart U.S., expressed confidence in Vizio’s customer-centric operating system, highlighting its ability to deliver great viewing experiences at attractive price points while enabling a profitable advertising business. As Walmart seeks to expand its media business, the acquisition of Vizio positions the company to offer innovative television and in-home entertainment and media experiences.

Walmart’s Response to Amazon’s Growing Ad Segment

With Amazon’s ad segment gaining momentum, Walmart recognizes the need to compete in the digital advertising space. By gaining control of the Vizio platform, Walmart will be able to offer companies that advertise with them a greater reach, tapping into Vizio’s 18 million active accounts. This acquisition presents an opportunity for Walmart to strengthen its position as a major player in the advertising industry, challenging Amazon’s dominance.

Conclusion:

Walmart’s acquisition of Vizio for $2.3 billion marks a significant move towards expanding its media business and competing with Amazon’s growing ad segment. With Vizio’s SmartCast Operating System and its 18 million active accounts, Walmart aims to tap into the rapidly scaling advertising market and offer innovative television and in-home entertainment experiences. As the retail giant pushes for higher profits, this strategic acquisition positions Walmart to strengthen its foothold in the digital advertising space and diversify its revenue streams.