Walmart Buys Former Search Engine Kosmix To Power Social And Mobile Shopping

For those who follow search it was initially one of those “WTF moments”: Walmart acquiring erstwhile Google challenger Kosmix. However AllThingsD reports that the price was $300 million-plus vs. $55 million raised. So the founders and investors get a seemingly nice exit.

Kosmix will now become part of the newly established “@WalmartLabs.”

When it launched in 2006 Kosmix was building a better search engine that organized results by category and added numerous filters allowing users to drill down for more relevance and control.

Below is an early Kosmix search results page (via DailyTech):

When it became clear that Kosmix wasn’t viable as a general purpose search engine the company shifted its model — multiple times. The company evolved into a vertical search engine and then into a collection of structured content pages or homepages for topics.

Behind it all was a massive taxonomy (not unlike Pandora) that made connections between places, things, entities and products. Kosmix used its technology to assemble multimedia rich Wikipedia-like “topic pages”  for different queries or subjects. Below is an example for Las Vegas:

These local pages could have beaten Google Places to the punch but the company didn’t make a promised major push into local. Instead it found great success with a vertical site, RightHealth, which the founders say is “one of the top three health and medical information sites by global reach.”

The company also built personalized news service “MeeHive,” which was a bit ahead of its time and ultimately discontinued. Using the same technology Kosmix later created TweetBeat, “a real-time social media filter.”

Clearly the Kosmix technology is versatile and the founders creative. Walmart will use the technology (and founders) to develop social and mobile applications. Here’s what Walmart said in its release announcing the acquisition:

“We are expanding our capabilities in today’s rapidly growing social commerce environment,” said Eduardo Castro-Wright, Walmart’s vice chairman. “Social networking and mobile applications are increasingly becoming a part of our customers’ day-to-day lives globally, influencing how they think about shopping, both online and in retail stores. We are excited to have the Kosmix team join us to accelerate the development of our social and mobile commerce offerings.”

Here’s Kosmix co-founder Anand Rajaraman discussing how Kosmix will be implemented at Walmart in more detail:

Quite a few of us at Kosmix have backgrounds in ecommerce, having worked at companies such as Amazon.com and eBay. As we worked on the Social Genome platform, it became apparent to us that this platform could transform ecommerce by providing an unprecedented level of understanding about customers and products, going well beyond purchase data. The Social Genome enables us to take search, personalization and recommendations to the next level.

Although Microsoft might have been a more “logical” buyer, in the context of this history and the wide range of capabilities that Kosmix brings to the retailing giant — but e-commerce laggard — it makes a good deal of sense.