Hacker News Reader

Comment by deafcalculus | Hacker News Reader

Walmart could've started out on their own. They wouldn't have been far behind because e-commerce is still new in India. But no, they spent billions buying a glorified smartphone shop that people will desert the moment they stop offering deep discounts.

View on HN

> Walmart could've started out on their own.

They could have and it would have taken years to build a brandname or they could buy an established player and get the brandname from day one. Walmart went with the other option.

That is how big companies operate, nothing to do with India.

Is Google a fool to buy youtube when they had Google Video?

Fair point. I'd argue that youtube has way higher network effects than an ecommerce shop and that Google paid a comparatively smaller 1B$ for a richer global market than the 16B$ that Walmart paid to grab a bite of the Indian market, especially with the political risk involved. I'll also wager that Walmart could've spent a lot less by getting exclusive deals on new smartphones along with deep discounts to quickly grab a huge chunk of the marketshare.

I could be wrong. With the absurd amounts of QE that went on for so long, maybe valuations that price in earnings decades away are justifiable.

1. Time and cost of building and growing a new e-commerce platform, especially for a giant like Walmart is non-trivial. I bet the requirement design alone would take a year to be approved.

2. Big companies often fail in new and unfamiliar markets.

3. Consider acquisition price inflation. If YouTube was created in this period, its selling price would be near $20B just like WhatsApp.

Reply on news.ycombinator.com