Walmart buys Jet.com for $3 billion to take on Amazon

Jet.com was supposed to give Amazon a run for its money.

It's still going to do that, but with Walmart's backing.

Walmart has acquired ecommerce startup Jet.com for $3 billion in a combination that will look to pair Walmart's reach and supply chain with Jet.com's ecommerce expertise.

The two-year-old Jet.com -- which in many ways was indistinct from Amazon -- was co-founded Marc Lore, who will join Walmart to run ecommerce for both companies. Lore is one of the most respected entrepreneurs in the ecommerce industry, having previously founded Diapers.com, which was eventually sold to Amazon.

"We started Jet with the vision of creating a new shopping experience," Lore said in the press release. "Today, I couldn’t be more excited that we will be joining with Walmart to help fuel the realization of that vision. The combination of Walmart’s retail expertise, purchasing scale, sourcing capabilities, distribution footprint, and digital assets – together with the team, technology and business we have built here at Jet – will allow us to deliver more value to customers."

The deal includes another $300 million in share incentives, meaning the final price tag could be $3.3 billion.

Walmart has struggled to make a significant dent in Amazon's ecommerce dominance. The acquisition of Jet.com -- along with Lore -- is meant to provide an influx of technology and talent that could help close the gap a bit.

It's a quick exit by Jet.com, which had burst onto the ecommerce scene with plenty of fanfare thanks in part to Lore's experience, the company's significant venture backing and its goal of taking on Amazon.

Jet.com had raised a total of $565 million since it started in July 2013 from a combination of Silicon Valley and Wall Street backers including Google Ventures, General Catalyst Partners, Goldman Sachs and Fidelity Investments.

Jet.com didn't take off immediately. The company had originally launched under a membership model like CostCo in which users paid an annual fee. That was quickly abandoned.

What to make of Jet.com's short history as an independent company has sparked two distinct narratives among journalists and analysts that cover ecommerce.

By one measure, Jet.com is a rousing success, having returned to its investors and founders a bit less than six times its initial investment in just more than three years. The company will now continue on in its efforts to take on Amazon, backed by Walmart's considerable power.

On the other hand, it's an early exit for a company that founder Marc Lore had billed as on its way to becoming the second major ecommerce power behind Amazon. Even a distant second worth 1/10th of Amazon, the reasoning went, would be a massive company. Amazon's current market cap is a bit more than $365 billion.