With Kosmix, Did Walmart Get What It Thought?

When Wal-Mart spent more than $300 million to buy social media firm Kosmix last week, much of the discussion and analysis focused on whether Wal-Mart would properly use its social media gem. But how sparkly is that gem? The premise has been that Kosmix has mastered this amorphous creature called social media. Searches on Kosmix itself, however, suggest that Kosmix is not quite an ideal guide.

ConsumerReports began the concerns when it reported that the site's home appliances page showed "news from the Philadelphia Inquirer on building-material thefts, broken links to stories on Helium.com and brief stories from sites like wikiHow were less empowering. And along with a plethora of Twitter posts, Kosmix’s Washing Machines page includes a Wikipedia entry on washing machines, a totally unrelated article from articlebasement.com on the importance of dreams and some unrelated YouTube videos." RetailWire did a search and found "Our own visit to Kosmix to run a few searches on topics of interest left us underwhelmed. Results coming back were not current and a few were not really related to our search objectives."

We did the same thing and also didn't conclude we were in the presence of social media gods. We searched for "refrigerators," which is a fairly well-understood term. Indeed, Kosmix quickly offered that "A refrigerator is a large box-like appliance, usually ranging from 200 to 400 pounds in weight, used to cool and store fresh foods and beverages." So far, so good.

But then it listed a wide range of tweets that used the word "refrigerator" but clearly were not referencing the cooling device, as in "was still here he'd be get'n real close to Put'n this game in the Refrigerator!" It then showed a story headlined "Gaming console thefts grow exponentially" and another titled "Australia to possibly restrict Plasma and LCD TVs."

YouTube videos referenced included "L. Ron Hubbard. The Xenu Story" and videos that were even farther removed from the searched topic.YouTube videos referenced included "L. Ron Hubbard. The Xenu Story" and videos that were even farther removed from the searched topic. So, yes, this shows that Kosmix is mortal. And that social media is incredibly difficult to master. To answer the obvious question, "Have we found anything else that does a better job of tracking all of social?" No, we haven't.

But run a search for refrigerator on Google, Bing or Yahoo, and you'll get tons of listings and, for the first several pages at least, they all refer to the big cooling units. Not an L. Ron Hubbard video in sight. (No disrespect intended to Mr. Hubbard. I'm sure he's a fine religion founder, but when faced with a busted icebox and a kitchen full of spoiling food, his videos are not top-of-mind.)

We could try and make the excuse that tweets use their own special shorthand jargon and that it's hard to understand context, beyond a simple word-match search. But isn't that exactly what Kosmix sold to Wal-Mart, the premise that it had figured out how to accurately and comprehensively decode the utterances from Twitter, Facebook, YouTube and other social network sites?

We don't want to make light of this situation. The other social search engines today—for example, search.twitter.com—mostly limit themselves to searching for precise words. For "refrigerator," its results are just as bad as those we found at Kosmix. Then again, it delivered precisely what it promised: an accurate word-match.

Perhaps that's the real issue? Not that Kosmix is weak, but that it pitched itself as such a social-site genius that we actually believed some of it was true. That's cool, though. It's not as though Kosmix was selling itself for $300 million or anything.

Retail due diligence is great with spreadsheets, earnings figures, profits and operating costs. But when it comes to assessing cleverness or subject mastery, things get messy. Lawyers and accountants can't help here, and that's where the mergers and acquisitions (M&A) people invariably turn.

Even worse than that is when people feel they are weak in an area and try to hire subject matter experts to help them. By definition, the people with the checkbooks—the ones who have decided they need the expert help—are ill-equipped to perform due diligence on the expertise of the candidates.

If you're trying to hire an RFID expert for a new initiative, wouldn't you have your best RFID people in the room during parts of the interview, specifically to report to you if the applicants are indeed knowledgeable RFID experts? Otherwise, they could BS you for hours and you'd never know (assuming that you personally are not comfortable with RFID nuances).

Did Wal-Mart test the position that these people had truly mastered social site searches? Or did its execs see impressive resumes and executive track records and assume the best?

The chances are that Wal-Mart didn't really need to have people who had figured out the answers as much as it needed a large team of people who were well positioned to figure out how find those answers. Still, the current Kosmix site isn't filling people with a lot of competency confidence.

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