Walmart in Talks to Buy TV Maker Vizio

Retail giant discussing a more than $2 billion deal that would boost its advertising business in battle with Amazon

Feb. 13, 2024 3:07 pm ET

*Walmart is shopping in the TV aisle to help grow its advertising business.(

The retail giant is in talks to buy smart television-manufacturer Vizio for more than $2 billion, according to people familiar with the situation. The move would give Walmart more places where it can sell ads and pitch shoppers on goods.

Walmart, including its Sam's Club chain, has historically been Vizio's largest customer. Vizio is historically the largest television brand sold at Walmart by sales.

The deal talks demonstrate the importance of consumer data and ad space for major retailers as they build out their ad businesses and compete with Amazon. In addition to being an e-commerce behemoth, Amazon is among the biggest ad players in the U.S. behind Google parent Alphabet and Facebook owner Meta Platforms. Amazon has also been building its own smart TV business.

The discussions between Walmart and Vizio are ongoing, and a deal may not happen.

There is also more competition among retailers hunting for ad dollars with companies including Best Buy, Kroger and Instacart jumping into the business. Advertisers continue to shift dollars into the retail media space, which is expected to hit $59.6 billion in U.S. ad revenue this year, up almost 30% from last year, according to Insider Intelligence.

Walmart gets most of its U.S. revenue from its grocery business, which typically has low profit margins. Executives see the Walmart Connect ad unit as a path to heftier profits and a way to generate cash beyond the company's longtime engine of selling goods through stores.

That would give Walmart more money to spend on offering faster shipping and other services to compete with Amazon. Seattle-based Amazon leans on profits from its advertising and cloud-computing businesses in a similar manner.

Early last year Walmart said it earned around $2.7 billion in global advertising revenue for the previous 12 months. The company reports full-year earnings next week. Walmart is already testing selling ads through connected TVs. A potential Vizio purchase could make the prospect easier and more appealing to potential advertisers.

Vizio was founded in 2002 by its CEO William Wang, a serial entrepreneur who survived a catastrophic plane crash that killed around half of its passengers. Vizio priced its initial public offering in 2021 at $21 and shares opened trading at $17.50. Vizio's stock closed Monday trading at less than $8 a share. Vizio is set to report fourth-quarter earnings on Feb. 27.

Vizio is best known for selling low-price TVs, but it has tried in recent years to expand into advertising and streaming. It sells ads that users see when they turn on its sets and inside some free video services.

For Walmart the logic of a potential deal is about growing advertising revenue, not selling more low-price TVs.

Data on TV ad sales and viewership is controlled by whichever company owns a TV's operating system. Walmart already has a large private-label electronics business through its Onn brand, which offers phone chargers, speakers and televisions. The Onn TVs run on operating systems from Roku or Google TV.

Amazon makes up 17% of the operating systems in connected TVs, compared with Vizio's operating system, which makes up 8%, according to Parks Associates. Roku has 25% market share.

Buying Vizio would give Walmart access to a TV operating system and more ad inventory and ad viewership data. For example, an advertiser such as Procter & Gamble that sells goods inside Walmart stores could run an ad through Walmart's advertising unit, then those ads could be shown to viewers on Vizio TVs. Finally, Walmart could potentially track those ads back to the purchase of goods.

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