Retail giant Walmart is exploring the possibility of acquiring electronics maker Vizio as it looks for new ways to broaden its reach in the digital advertising space, according to a report published on Tuesday.
The story, which first appeared in the Wall Street Journal, said Walmart could grab Vizio for more than $2 billion, a move intended to help the retailer sell more digital advertising space, including some for goods sold within its retail and online stores.
Discussions between the two companies are still ongoing, and may not result in a deal, the Journal caution. Still, news of the possible arrangement caused Vizio’s stock price to rise 25 percent during the trading day on Tuesday. By the end of the trading day, one share of Vizio was listed for $9.75, or 24 percent higher compared to its close of $7.47 per share on Monday.
The new comes about three months after executives at Vizio said they were exploring ways to license their smart TV operating system SmartCast to other electronics makers.
“Over the past few years, we have been continuously retooling and enhancing our operating system to unlock further growth opportunities,” William Wang, Vizio’s CEO, said on a conference call with investors last November.
Wang said Vizo’s decision to fully develop its own streaming platform offered it “deep expertise with integrated hardware and software,” which “provides a distinct potential for mutually-beneficial outcomes for Vizio and future partners.”
Since then, the company has been relatively quiet on plans to offer SmartCast to other TV makers. But the move follows a trend started by some of its rivals, including Roku and Amazon, which licenses similar streaming TV operating systems to third-party TV makers like TCL, Hisense, Toshiba and Insignia.
Like its competitors, Vizio has shifted its core business away from hardware sales with an eye toward capturing additional revenue streams from its streaming TV platform. Vizio’s connected TV revenue generally comes from advertising inventory sold within its home screen and other menus, as well as short commercial streams on its free TV service called WatchFree Plus.
Beyond traditional display ads, Vizio focuses on pioneering interactive and engaging ad types to draw users in to different products and services. Last year, the company launched a slate of interactive greeting cards via its home screen menu that linked to ad-supported content within WatchFree Plus. Several months prior, the home screen featured floating Lego bricks that, when engaged, pushed users to download the now-defunct Fox Now app and stream episodes of the network’s competition series “Lego Masters.”
Vizio is scheduled to report its fourth quarter and full-year earnings for 2023 on February 27.
