Walmart's App Picks the Right Gift - Analyst Blog

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Walmart Stores ( WMT ) has gone another step closer to its customer's hearts and has decided to launch its first Facebook application, Shopycat, to help its buyers choose gifts for their friends online and avoid the holiday season rush.

WalmartLabs, Walmart's Global e-Commerce Division, and the company's hub for creating technologies and businesses in social and mobile commerce for global shoppers has set up the Shopycat application. WalmartLabs was formed after Walmart acquired Mountain View-based Kosmix, a heavily-funded social media technology provider.

The application will scour data from the social networking site Facebook, and will thereafter recommend gift for a person based on his likings and requirement. The application will also provide links to sites other than, with the purpose of creating a broader marketplace rather than just a Walmart application. The application is part of Walmart's Facebook page, which has 10 million fans.

The gifts are usually not priced on the higher side and range between $10 and $100. It is particularly helpful for budget-constrained customers.

However, customers need not be cautious about the infringement on personal data, as the founder of Kosmix, Anand Rajaraman, assured that Walmart will never use consumers' data in any way beyond what it has been permitted.

Walmart is also working on technologies such as those that let shoppers buy products in the aisles and skip the checkout line, and is also interested in NFC (near-field communication) for enabling purchases by phone.

Other retail biggies are also promoting sales through Facebook. In early November, EBay Inc. ( EBAY ) launched an online service, Group Gifts, that connects eBay shoppers with Facebook friends to collectively purchase presents.

Wal-Mart reported better-than-expected second-quarter 2012 results on November 15, with quarterly earnings of $1.09 a share, up 12.4% over the year-ago earnings of 97 cents a share. Reported earnings per share also surpassed the Zacks Consensus Estimate by a penny.

However, Wal-Mart faces stiff competition from Target Corp . and Costco Wholesale Corporation ( COST ), and has a Zacks #3 Rank, indicating a short-term 'Hold' recommendation.

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WAL-MART STORES ( WMT ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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