Sears' Peculiar Acquisition

From TechCrunch:

Social search engine Delver, which we placed on death watch a month and a half ago has been acquired by Sears in a last minute play right out of left field.

Israeli business media is reporting that as part of the deal, Delver CEO Liad Agmon will move to Chicago where he will hold a title of VP at Sears Holdings. Delver itself will become an R&D center for Sears and will continue to develop its social graph search engine, as well as additional products. It is not clear what Sears wants to do with Delver. Perhaps it will turn it into a social product search engine, or maybe it just likes the idea of buying an Israeli R&D team on the cheap.

The purchase price is unknown but it’s safe to assume it could not be very high considering the company was literally days from being shut down. The bright side of course is that Delver’s remaining 20 employees will not join the unemployed in Israel.

The company has raised $4 million from a single investor, Carmel Ventures.

What is Delver?

Delver is an intelligent social search engine that enables you to find, experience and benefit from the wealth of information created and referenced by your social world.

The search engine allows you to discover and benefit from the collective wisdom of your friends, friends of friends, and people whose knowledge and value you admire. People around you are increasingly creating and sharing useful content online through: blogs, videos, reviews, articles, websites, music… and the list is only growing.

By cross-connecting all that content with your social graph, Delver aims to deliver search results that are truly relevant to you.

What is Lampert doing? Well, first of all he basically bought the CEO to become VP of Sears (SHLD). Lampert had made no secret in desire to increase Sears' web presence. Currently it is a bit unorganized. You have Sears.com, Kmart.com, Sears2go -- a mobile commerce Web site, Partsdirect.com (you can find almost any part for anything there), Landsend.com, managemyhome.com (allows people to bid improvement projects out) and a few others.

Sears has valuable online brands, their Sears and Kmart site are some of the most visited retail site (although far behind #1 Amazon (AMZN)). What Sears needs is a way to consolidate the various properties in a cohesive site that could be very powerful. For instance. If I am on Sears.com and do a search for "home improvement", I get a listing of DVDs from Tim Allen's sitcom by that name. I do not get choices for managemyhome.com or thegreatindoors.com. Just the DVD. Sears is not maximizing its properties with its search feature. In a way, Sears has its online stores almost standing alone rather than under Amazon.com type umbrella.

Lampert has expressed in the past his desire to sell more direct to customers and expand Sears' online presence. My thought is this move is a way for Sears to rapidly increase progress there.

This could very well be one of the acquisitions that is dismissed because of the lack of obvious immediate benefit that later comes back to give Sears tremendous benefit.

Disclosure: Long SHLD

Comments

[yellowhoard:]

Lampert is no dummy. He had a good idea years ago in using Sears as a real estate play. Unfortunately for him, he was only a genious for about a year, then the real estate market collapsed before he could liquidate all of the surplus property. I think he's thinking outside of the box again. Hope he can pull this together in a hurry.

Mar 10 07:58 AM

[fatcat:]

When I think of Lampert,I think about Autozone...

If I had my life over for the last 10yrs,thats the only stock I would have played...and I would be rich beyond measure...

Oh,well...

Mar 10 08:08 AM

[raytayzmd:]

..."Delver"??...doesn'... that require installation of some stupid "toolbar"?...to me, a toolbar represents a breach in my firewall that threatens the security of my data...unless they can get rid of that, I won't be interested in using them.

Mar 10 11:52 AM

[socphd71:]

The Sears and K-Mart stores in the small city where I live have very few customers. The local mall is owned by GGP, another of your long positions. I think you own two losers (at least). So do I, but not GGP or SHLD.

Mar 10 07:18 PM