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Walmart is acquiring Vizio for $2.3 billion, but the deal is more about advertising than selling TVs.
In announcing the acquisition, the retail giant notes that advertising revenue from Vizio’s smart TV operating system has accounted for “the majority of the company’s growth in the last five years.” Now Walmart wants to absorb the TV vendor to expand its own advertising apparatus, dubbed “Walmart Connect,” which launched in 2021.
“Our media business, Walmart Connect, is helping brands create meaningful connections with the millions of customers who shop with us each week,” says Walmart’s Chief Revenue Officer Seth Dallaire. “We believe the combination of these two businesses would be impactful as we redefine the intersection of retail and entertainment.”
(Credit: Walmart)Walmart isn’t exactly known as an advertising provider. But the retail giant sees a lucrative business in letting third-party merchants market their goods and services inside Walmart properties, and on Walmart.com and the company's mobile app.
“We believe Vizio’s customer-centric operating system provides great viewing experiences at attractive price points,” Dallaire adds. “We also believe it enables a profitable advertising business that is rapidly scaling.”
Vizio, founded in 2002, currently has over 18 million active user accounts on its SmartCast TV operating system, which also offers ad-supported programming. In addition, Vizio’s SmartCast OS already has “over 500 direct advertiser relationships,” Walmart says.
The announcement doesn't say how consumers might benefit from the deal. But it sounds like Vizio TV owners can expect to see more targeted advertising on the SmartCast OS.
It’s unclear when Walmart expects the acquisition to close, but the company notes that the deal is subject to regulatory scrutiny. One antitrust concern will likely be Walmart heavily promoting Vizio TVs over other brands.