In a strategic move to further its lucrative advertising business, Walmart has announced its acquisition of TV maker Vizio for $2.3 billion. CNBC reports that this development surfaced as Walmart disclosed its fourth-quarter earnings- a major leap for the retail giant this year.
The deal, valued at $11.50 per share, positions Walmart to use Vizio's prominence in the television market, especially for their advertising venture.
Notably, Walmart and its Sam's Club chain have long been key retailers of Vizio devices, making the acquisition a natural extension of their existing partnership.
The move, driven by Walmart's pursuit of higher profits, holds potential for the retail giant to capitalize on Vizio's SmartCast Operating System.
The said system allows users to stream free, ad-supported content on their TVs, aligning with Walmart's broader strategy to expand its media business, Walmart Connect. This segment, boasting higher profit margins than traditional retail categories like groceries or clothing, reported a robust 22% growth in advertising sales during the fourth quarter.
Seth Dallaire, Executive Vice President and Chief Revenue Officer of Walmart U.S., expressed optimism about the billion-dollar deal.
"We believe VIZIO's customer-centric operating system provides great viewing experiences at attractive price points. We also believe it enables a profitable advertising business that is rapidly scaling."
Walmart Advertising Venture
The move is a strategic business decision and a response to the growing competition in the advertising sector, particularly against Amazon.
By gaining control of the Vizio platform, Walmart aims to extend its advertising reach. This means companies advertising through Walmart can access a broader audience.
According to Walmart, Vizio's SmartCast system boasts 18 million active accounts, providing a substantial user base for potential advertisers.
Looking ahead, Walmart envisions not only strengthening its advertising foothold. But also explore opportunities to provide "innovative television and in-home entertainment and media experiences" as it fully integrates the TV maker into its operations.
Like all industries, the retail landscape continues to evolve with media exposure. This acquisition positions Walmart at the forefront of the ever-expanding intersection of retail and media.
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