Wal-Mart Launches Online Community
Retailer enters online classifieds business.
Wal-Mart's (WMT) aggressive pricing strategy has already dented profits at the likes of Target (TGT) and Sears (SHLD), but the company isn't satisfied with just taking business from traditional competitors. Now the world's largest retailer wants to expand its reach by building an online community. The challenge will lie in its monetization.
Wal-Mart has partnered with Oodle.com, an online classified advertising community, in launching a site that allows users to browse nationwide classified ads as well as Wal-Mart's Internet store. The move pits the retailer against the the current leader in community shopping, not-quite-for-profit Craigslist.com.
The classified ads are nice and all, but Wal-Mart isn't just in this to take on the kind souls at San Francisco-based Craigslist. On the contrary, the fledgling service is aimed at cementing the company's retail presence online and making it a destination for Internet shoppers of all stripes.
As with auction site eBay (EBAY), part of the strategy is to provide a forum where unwanted items can be turned into cash. Consumers can hawk everything from televisions to homes and, with any luck, use the money they generate to make purchases at Wal-Mart's online store. It's by effectively presiding over these transactions that Wal-Mart hopes to monetize its community.
Bringing people together hasn't always translated into profit. Microsoft (MSFT) and Yahoo (YHOO) are still scratching their heads and trying to figure out how to wring dollars from social networks.
As record fuel prices keep more and more consumers off the roads and at home, companies that control the online retail space will find themselves in an enviable position. Wal-Mart continues to profit from offering what consumers need most: A way to get by.
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