Wal-Mart to buy online retail newcomer Jet.com – Los Angeles Times

Wal-Mart Stores Inc. is buying fast-growing online retailer Jet.com for $3 billion in cash plus $300 million in stock, scooping up a newcomer that launched a year ago with the intention of challenging online leader Amazon.com Inc.

The hefty price underscores how Wal-Mart is trying to compete more aggressively and effectively for younger and more affluent customers as it has seen its online business growth slow despite big investments in distribution centers and expanding services.

As part of the deal, Jet.com co-founder and Chief Executive Marc Lore will oversee both that site and walmart.com and will report to Wal-Mart CEO Doug McMillon. Lore brings to the role a rich ecommerce resume: He founded Quidsi, the parent of Diapers.com, which Amazon bought for $500 million in 2010.

Analysts say the acquisition still won’t enable Wal-Mart to catch up to Amazon in sales, but it will help narrow that gap and should widen the distance between Wal-Mart and other online retailers. The deal also reflects the difficulties for start-ups like Jet.com of making it on their own in a sphere Amazon dominates with its network of distribution hubs and the powerful asset of its Prime membership program.

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