Walmart 2000 Annual Report Download - page 9

Wal-Mart fast-forwarded its online
retailing plans recently by forming a
promising new partnership with the
respected Internet venture-capital
firm, Accel Partners.
The new venture, Wal-Mart.com Inc.,
is expected to benefit Wal-Mart
shareholders by further accelerating
development of the Company’s online
retailing model — a model that pro-
vides opportunities for even greater
sales growth, future profits and
shareholder value.
Wal-Mart moved into the Internet
in 1996 with the introduction of
Wal-Mart On-line, then relaunched
the site on January 1, 2000. The
original Internet business model
was designed and operated in-house
at the Company’s Bentonville, Ark.,
headquarters, but the new
Wal-Mart.com will be based in
Palo Alto, Calif., in the middle of
Silicon Valley’s vast information
and technology talent pool.
Ultimately, Wal-Mart.com might
choose to go public. But even if there
is a public offering, Wal-Mart Stores
will retain a majority ownership of
the new venture, ensuring that the
“online store” builds on the Wal-Mart
brand and takes full advantage of the
traditional “bricks-and-mortar”
stores. Since Wal-Mart Stores, Inc. is
the majority shareholder, the results
from the Internet business will be
consolidated into Wal-Mart’s
financials, so Wal-Mart shareholders
will benefit from any increased
sales and profits that result from
Internet business.
Wal-Mart.com will even have a sepa-
rate management team and board of
directors. Board members will
include Wal-Mart Chairman Rob
Walton; Wal-Mart President and CEO
Lee Scott; new Wal-Mart.com CEO
Jeanne Jackson and Accel Managing
Partner James Breyer.
“This puts Wal-Mart.com right
where it needs to be and should
allow us to further develop our e-com-
merce business at both Wal-Mart and
Internet speed,” Scott says. “Our
focus is to grow our market through
the Internet — not just cannibalize
the existing Wal-Mart customer base.”
Scott says Wal-Mart’s new online
model approaches the Internet as a
fresh new market with totally differ-
ent retailing rules — much like a for-
eign country. The formation of this
new company offers advantages in
recruiting Internet talent; eliminates
disadvantages that impact Wal-Mart
customers; and levels the Internet
playing field.
Fortunately, the new company was
able to attract a top retail manage-
ment talent in Jeanne Jackson, who is
the former CEO of a leading specialty
retailer and also directed that retail-
er’s efforts in catalog and Internet
business. In her 22-year career,
Jackson has acquired expertise in
retail brands while working for sever-
al top-name firms. She was even
named by Fortune as one of the “50
Most Powerful Women” in U.S. busi-
ness, and by
Business Week
as one of the
nation’s top
25 business
managers.
Jeanne’s expe-
rience gives
the Company
a great start
on building an
even stronger
presence on
the Internet and attracting new cus-
tomers to the Wal-Mart brand.
Wall Street’s reaction to the new
dot-com venture has been ovewhelm-
ingly positive. Merrill Lynch called
the new partnership “a smart move
for Wal-Mart” and other analysts
congratulated the Company for har-
nessing the power of the technology
market to develop Wal-Mart’s online
retailing program into a world leader.
Accel, the first venture-capital firm to
invest in the Internet, gained wide-
spread acclaim for backing UUnet,
which grew into one of the world’s
largest Internet service providers
and a unit of MCI WorldCom. Accel
also backed RealNetworks, the online
audio/video company.
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Joint-Venture Opens New Frontier for Shareholders
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Wal-Mart.com
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Jeanne Jackson,
Wal-Mart.com CEO