Walmart Buys Vizio

Retail giant Walmart is set to purchase TV maker Vizio for $2.3B in a bid to expand its advertising business, according to the two companies yesterday. The move is expected to allow the worldwide operator of 11,000 department stores to better compete with Amazon's and Google's ad businesses.

The acquisition comes as similar retailers like Target and Kroger look to leverage their broad reach to diversify revenues via digital ad sales and their historically high margins (70% on average). Walmart has significantly increased the number of ads its 139 million weekly customers see in stores since last year, deploying over 170,000 screens in the US in addition to in-house radio spots and product samples. The retailer also plans to sell ads on Vizio's existing SmartCast operating system, a free ad-supported service on its TVs, which currently has 18 million active accounts. See how retail media works here.

The announcement came alongside a better-than-expected earnings report, with Walmart's revenue rising 6% last quarter. Walmart's shares closed up 3%.