Walmart, the world’s largest retailer, announced it will acquire two-year-old online retailer Jet.com for $3.3 billion in cash and stock in the largest-ever acquisition of an e-commerce company. 
 
 Jet co-founder and CEO Marc Lore will continue to run Jet as well as Walmart’s U.S. e-commerce operations after the acquisition closes, according to sources. The deal includes $3 billion in cash, as well as $300 million in Walmart stock that will be paid out over time as part of an incentive bonus plan for Jet executives. 
 
 The announcement comes after Recode reported the deal was finalized over the weekend. Walmart and Jet declined to comment on the earlier report. 
 
 For Walmart, the purchase marks a giant bet on a largely unproven startup that only launched its shopping site widely last July. Up until now, the largest U.S. e-commerce acquisition was last year’s $2.4 billion sale of Zulily, a public company, to QVC. 
 
 The Jet acquisition is an acknowledgement by Walmart CEO Doug McMillon that his company needs outside help if it’s ever going to close the giant gap with Amazon. It’s still unclear whether that is the right strategy for the brick-and-mortar retailer. 
 
 Lore spoke about battling Amazon on Recode Decode last December: 
 
 The deal is in many ways a marriage of necessity, but a shot worth taking, as I explained last week when news of the talks first broke. 
 
 Walmart’s $14 billion in annual e-commerce sales is a fraction of Amazon’s $99 billion and is growing slower than the industry average. Its growth rate has decelerated for five consecutive quarters. 
 
 Jet.com was co-founded in 2014 by the entrepreneur Marc Lore in an attempt to build a new online megastore that would compete with the likes of Amazon, Walmart and Costco. Jet has secured more than $800 million in financing since its founding but is spending $20 million to $25 million on advertising a month to fund its growth. It is not profitable. 
 
 It most recently raised a $619 million round that gave it a value of more than $1.6 billion, but was going to have to keep raising huge sums of money to survive on its current path. 
 
 Lore pulled the rip cord instead, but he will be rewarded handsomely — he owns about 25 percent of the company, according to sources. Such a stake suggests Lore stands to make as much as $750 million in the deal. He will now have Walmart’s deep pockets — the company registered $15 billion in profits last year — to try to fuel more growth at Jet. 
 
 Lore will stay on and run Walmart.com as well as Jet.com, two sources said. It seems likely that he will report to McMillon, the CEO. 
 
 Walmart’s current global e-commerce chief, Neil Ashe, will eventually depart after a transitional period, these people said. He joined Walmart in 2012 after a three-year stint at CBS Interactive. 
 
 Lore previously co-founded Diapers.com’s parent company and sold it to Amazon for $550 million in 2011 after the two sides battled through a pricing war that threatened to put the startup out of business. 
 
 Jet sells more than 12 million products ranging from TVs to toys to cereal, and even milk and other fresh groceries in some markets. A little less than a third of its sales volume comes from items that Jet stores in its own warehouses and sells directly to customers, an exec recently told Recode. 
 
 The remainder comes from a network of more than 2,000 vendors who list their own products on Jet.com and ship orders to Jet customers from their own facilities. The company typically takes a cut of 8 to 15 percent on these orders. As of March, Jet was on track to sell more than $1 billion worth of goods over the next 12 months, though it only records a fraction of that as revenue. 
 
 Jet has attempted to stand out from competitors through a discounting model, dubbed the Smart Cart, that rewards customers with greater discounts as they add more items to their order. 
 
 Jet also gives customers additional discounts if they forfeit the right to return an item, or pay with a debit card instead of a credit card. Four million people have made a purchase on Jet since it launched, but the company recently shifted its advertising efforts to getting existing customers to come back more often. 
 
 Jet originally planned to charge customers a $50 annual membership fee in exchange for even larger discounts, but scrapped that model before its launch. At the time, Lore explained the move in part by saying that some brands did not want to sell goods on a site that was considered a discount destination. 
 
 On the back end, Jet’s technology can identify in real time which orders should be routed to which vendors to garner the lowest fulfillment and shipping costs — a model that is said to allow the company to provide bigger discounts for bigger orders. Vendors are able to set business rules so they only accept orders that will be profitable for them, Lore has previously said. 
 
 Such technologies were attractive to Walmart, according to sources, as it attempts to use its vast store and warehouse footprint to reduce shipping costs and cut down on delivery speeds. Amazon has put pressure on the whole industry through its Amazon Prime shipping program, which now delivers some goods in as little as two hours in dozens of cities. 
 
 Walmart is expected to utilize some parts of the pricing technology on its other e-commerce sites. Walmart may also use some of Jet’s technologies to expand the business it gets from other vendors selling their wares through Walmart.com. This model — known as a third-party marketplace — is also employed aggressively by Amazon, which now gets around half of its unit sales from that group. 
 
 Even with Walmart acquiring the strong Jet leadership team and proprietary technology, the deal still will be viewed as a rich, if not desperate, one by some industry observers. 
 
 Jet does not disclose revenue numbers, but my back-of-the envelope math suggests the company is on pace to do no more than around $500 million in revenue over the next year. An acquisition price that is six times a company’s revenue is mostly unheard of in e-commerce, especially for a company that is nowhere near profitable. Dollar Shave Club sold to Unilever for between four and five times revenue but had said it could be profitable on an Ebitda basis by year’s end. 
 
 Amazon, by comparison, currently trades around 3.7 times its e-commerce revenue and has registered record profits three quarters in a row. 
 
 Jet is based in Hoboken, N.J., and has raised investments from several of Diapers.com’s original backers including Accel Partners, NEA and MentorTech Ventures. Jet also took investments from Primary Venture Partners, Bain Capital Ventures, Google Ventures and Alibaba. 
 
 Lore had been known to regale the press with his ambitious plan to build a long-term stand-alone business that could be worth tens of billions some day. Jet’s investors are still pleased. Several have told Recode privately that they thought the chances of a successful outcome were slim to near-impossible, even with the background of Lore and his co-founders. Now, they’re cashing out tens of millions or more, in some cases. 
 
 "Not bad for two years’ work," one said. 
 
 Correction: An earlier version of this article incorrectly stated Lore would run Sam's Club's online operation. He will only run Walmart and Jet's e-commerce businesses. 
 
 Update: The story was updated to include official announcement of the deal from Walmart. 

 The author is a Reuters Breakingviews columnist. The opinions expressed are her own. 
 
 Wal-Mart may be trying to hasten its pursuit of Amazon by riding a unicorn. The U.S. retail titan is in talks to buy Jet.com, a fledgling online-shopping site, according to the Wall Street Journal. It would fit into a bigger plan to beef up its lackluster digital and e-commerce efforts. Amazon, meanwhile, keeps moving ahead with offerings such as one-day shipping and groceries. 
 
 Doug McMillon, Wal-Mart Stores’ boss, has no illusions about how his company is faring on the web. “Growth here is too slow,” he said in May. Online sales clocked in at about $14 billion last year, barely 3 percent of Wal-Mart’s top line. Amazon by comparison reported a revenue increase of about one-fifth in 2015 to $100 billion, excluding web services. It also was about a year ago that Amazon charged past Wal-Mart in terms of market value. At $350 billion, it is now 60 percent larger. 
 
 Wal-Mart lags in other areas, too. Its marketplace that allows consumers to sell their products next to Wal-Mart’s own has over 10 million items. Amazon counts 200 million, according to Jefferies. What’s more, Amazon is eyeing turf claimed by Wal-Mart. It recently expanded the markets in which it delivers fresh food such as milk and produce. 
 
 Given Wal-Mart’s ambitions, Jet understandably makes for a tempting target. Founder Marc Lore also helped start the company behind Diapers.com, which Amazon bought in 2010. Launched just last year, Jet has been struggling to challenge its larger online rival. The business model already was changed. Jet first required a $50 annual membership fee, in a bid to mimic the successful Costco structure online. It dropped the idea, however, and turned its attention to other ways to generate revenue instead. 
 
 Wal-Mart has been rapidly gulping down startups over the past couple of years, including recipe and meal-planning service Yumprint and advertising-tech firm Adchemy. Jet would be a bigger bite. It has raised more than $500 million and is valued at over $1 billion. Wal-Mart can afford to buy as it builds, but even a galloping unicorn – and there’s no sign Jet is yet such a beast – will struggle to tow the lumbering retailer into a competitive position online. 

 Walmart as we know it today evolved from Sam Walton’s goals for great value and great customer service. “Mr. Sam,” as he was known, believed in leadership through service. This belief that true leadership depends on willing service was the principle on which Walmart was built, and drove the decisions the company has made for the past 50 years. So much of Walmart’s history is tied to the story of Sam Walton himself, and so much of our future will be rooted in Mr. Sam’s principles. 
 
 The Road to Walmart 
 
 Sam Walton was born in 1918 in Kingfisher, Oklahoma. In 1942, at the age of 24, he joined the military. He married Helen Robson in 1943. When his military service ended in 1945, Sam and Helen moved to Iowa and then to Newport, Arkansas. During this time, Sam gained early retail experience, eventually operating his own variety store. 
 
 In 1950, the Waltons left Newport for Bentonville, where Sam opened Walton’s 5&10 on the downtown square. They chose Bentonville because Helen wanted small-town living, and Sam could take advantage of the different hunting seasons that living at the corner of four states had to offer. 
 
 Inspired by the early success of his dime store, and driven to bring even greater opportunity and value to his customers, Sam opened the first Walmart in 1962 at the age of 44 in Rogers, Arkansas. 
 
 Changing the Face of Retail 
 
 Sam's competitors thought his idea that a successful business could be built around offering lower prices and great service would never work. As it turned out, the company's success exceeded even Sam's expectations. The company went public in 1970, and the proceeds financed a steady expansion of the business. Sam credited the rapid growth of Walmart not just to the low costs that attracted his customers, but also to his associates. He relied on them to give customers the great shopping experience that would keep them coming back. Sam shared his vision for the company with associates in a way that was nearly unheard of in the industry. He made them partners in the success of the company, and firmly believed that this partnership was what made Walmart great. 
 
 As the stores grew, so did Sam's aspirations. In addition to bringing new approaches and technologies to retail, he also experimented with new store formats—including Sam's Club and the Walmart Supercenter—and even made the decision to take Walmart into Mexico. Sam's fearlessness in offering lower prices and bringing Walmart's value to customers in the U.S. and beyond set a standard for the company that lives on to this day. His strong commitment to service and to the values that help individuals, businesses and the country succeed earned him the Presidential Medal of Freedom, awarded by President George H. W. Bush in 1992. 
 
 It was during Sam's acceptance remarks that he articulated what would come to be Walmart's official company purpose. 
 
 
 
 If we work together, we'll lower the cost of living for everyone...we'll give the world an opportunity to see what it's like to save and have a better life. 
 
 Today, "saving people money so they can live better" is the driving force behind everything we do. 
 
 
 
 10 Rules for Building a Better Business 
 
 Sam Walton believed running a successful business boils down to 10 simple rules and they helped Walmart become the global leader it is today. We continue to apply them to every part of our business. Read his 10 rules for building a better business » 
 
 Mr. Sam's Legacy 
 
 Sam Walton died in 1992, shortly after receiving the Medal of Freedom, but his legacy lives on. To this day, Walmart remains a leader in the retail industry. We are committed not just to expanding the business to better serve our customers, but also to improving the communities we serve through our efforts to constantly improve what we do and how we do it, and through the impacts we're able to achieve through the Walmart Foundation. Through this daily dedication to our business and our customers, we honor Mr. Sam. 

 Wal-Mart Stores Inc. WMT -1.18% signed a $3.3 billion deal to buy web retailer Jet.com Inc., bringing in some outside help to jump-start growth at the retail giant’s e-commerce operations. 
 
 The deal is the largest ever purchase of a U.S. e-commerce startup and a sign Wal-Mart Chief Executive Doug McMillon sees the shift to online shopping and the expansion of Amazon.com Inc. as existential threats to the company’s five decades of growth. 
 
 Jet’s 46-year-old founder Marc Lore will join Wal-Mart as CEO of e-commerce and be responsible for both Walmart.com and Jet.com, Mr. McMillon said Monday. Wal-Mart’s top online executive, Neil Ashe, is leaving the company. 
 
 From the Archives Amazon online retail rival Jet.com abandoned a key part of its business model, surprising industry watchers, casting doubts on Jet’s viability. (Originally published Oct. 8, 2015) 
 
 The Journal reported last week that Wal-Mart was in talks to buy the unprofitable startup, which launched last year and has been spending heavily to market itself. 
 
 Wal-Mart said the transaction includes about $3 billion in cash and $300 million of Wal-Mart shares, which will be paid over time. It is expected to close later this year. 
 
 The deal marks a significant shift in how Wal-Mart approaches e-commerce. It first launched Walmart.com more than 15 years ago and has spent billions building up its own online operations. It has opened seven large-scale distribution centers in the U.S. to fulfill orders and hired hundreds of e-commerce staffers at offices in San Bruno, Calif. 
 
 Until recently those efforts, however, have always come secondary to the core business of running thousands of sprawling stores around the globe. For example, former early employees say the e-commerce operations aimed to be profitable quickly, while Amazon’s leaders burned through cash to build sales. 
 
 Wal-Mart’s e-commerce sales last year reached nearly $14 billion, or 3% of its $482 billion in annual revenue. Amazon’s sales hit $107 billion last year, including its web-service business. 
 
 “A Wal-Mart and Jet.com tie-up could firmly make the e-commerce battle a two horse race,” said Simeon Gutman, an analyst at Morgan Stanley. While Wal-Mart could benefit from Jet’s supply chain, talent and technology expertise, he said the two companies operate with very different models. 
 
 Jet founder Marc Lore is expected to take over leadership of Walmart.com in addition to Jet after the deal closes. Photo: Associated Press 
 
 “We don’t see Jet.com addressing Wal-Mart’s key issues; fusing its website, stores and distribution assets,” Mr. Gutman said. 
 
 Jet has said it aims to offer shoppers lower prices than Amazon or Wal-Mart by teaming up with a vast marketplace of sellers rather than building up its own inventory. Part of Jet’s pitch to shoppers is software that helps it sell at lower prices by taking into account how customer choices hit profits, including basket size and the proximity of the merchandise. 
 
 Wal-Mart said Jet has been adding 400,000 shoppers monthly, and at the end of its first year was on pace to sell $1 billion worth of merchandise annually through its website. A Wal-Mart spokesman declined to discuss Jet’s revenue or profitability. 
 
 The retailer gains access to a larger group of young, wealthy, urban shoppers through Jet, Mr. McMillon said on a conference call, and “Jet has been able to attract some brands we don’t have at Wal-Mart.” 
 
 The company will continue to operate both Jet.com and Walmart.com as separate websites. 
 
 The biggest challenge will be bringing the two e-commerce operations, as well as Wal-Mart’s Bentonville, Ark., headquarters, together to “all believe in one common vision,” Mr. Lore said. 
 
 While Wal-Mart is one of the biggest U.S. e-commerce players, it has struggled to keep pace with Amazon. Wal-Mart’s e-commerce sales rose just 7% in the most recent quarter, while the overall U.S. e-commerce market grew about 15%. In the most recent quarter Amazon grew 31%. 
 
 “We believe ‘catching’ Amazon online is an unrealistic goal,” said Moody’s lead retail analyst Charlie O’Shea. 
 
 In recent months Wal-Mart has rapidly increased the number of products it sells online to lure shoppers from Amazon. But until earlier this year the technology behind Wal-Mart’s website capped the number of products it could display to shoppers at around 8 million, according to a spokesman. 
 
 Walmart.com now has about 11 million products and is growing quickly by giving more third-party sellers access to the site and encouraging manufactures who sell in Wal-Mart stores to upload information about all their products into Walmart.com. 
 
 —Greg Bensinger and Rolfe Winkler contributed to this article. 
 
 Corrections & Amplifications: 
 
 Jet.com’s Marc Lore is 46 years old. An earlier version of this article incorrectly stated that Mr. Lore was 45. (Aug. 8, 2016) 
 
 Write to Sarah Nassauer at sarah.nassauer@wsj.com 

 Walmart has a massive customer base. Richard Feloni Walmart's e-commerce business has long been overshadowed by Amazon's. 
 
 On a dollar-for-dollar basis, it's easy to understand why: Walmart's online sales were $13.7 billion in 2015, compared to Amazon's $107 billion. 
 
 But if Walmart buys Jet.com, which it's reportedly considering, it could become Amazon's worst nightmare. 
 
 Here's why: 
 
 1. Walmart has a massive customer base 
 
 The retailer is far behind Amazon in terms of online sales, but overall, the picture looks much different. 
 
 Walmart's revenue in 2015 was $482 billion, which is more than four times Amazon's revenue last year. 
 
 All that revenue for Walmart represents untapped potential for online sales from customers who are currently shopping at Walmart's physical stores. 
 
 Slice intelligence 
 
 2. Walmart has a massive network of stores that can serve as distribution centers for products sold online 
 
 Walmart has more than 4.500 stores in the US and 102 distribution facilities. By comparison, Amazon has roughly 180 fulfillment centers in the US. 
 
 For Walmart, "This combination of a massive brick-and-mortar footprint with [an] emerging ecommerce player would put both companies in a better position for battle," said Stephan Schambach, who founded e-commerce companies NewStore and Demandware. 
 
 He said he's skeptical however that Walmart will ever overtake Amazon in online sales. 
 
 "I still don't think they'll be able to beat out Amazon, but it will be interesting to watch them try," he said. 
 
 Neil Saunders, CEO of retail consulting firm Conlumino, is more bullish on Walmart's potential. 
 
 "We have always said that this is a major advantage for Walmart over a player like Amazon in that Walmart can distribute products far more cheaply and quickly, if it finds a way to fully integrate stores into its systems," Saunders wrote in a note to clients. 
 
 3. What Walmart lacks in e-commerce logistics, Jet.com can offer 
 
 Jet.com is growing rapidly and stealing some customers from Amazon by offering cheaper prices than the e-commerce giant. It's only a year old and it has already generated more than $1 billion in sales from more than 4 million shoppers, according to Euromonitor. 
 
 According to Slice Intelligence, another industry-data firm, Jet's sales in July 2016 have grown 168% relative to August 2015. Wal-Mart's online sales, meanwhile, have grown only 30% 
 
 Jet.com is also quickly mastering fast and free shipping. 
 
 Marc Lore, CEO and founder of Jet.com. Jet While Walmart only recently began offering two-day delivery to members of its ShippingPass program — which is meant to rival Amazon Prime — Jet.com has figured out how to achieve one-day delivery for half of US households free of cost, according to Euromonitor International. 
 
 "Wal-Mart will gain significantly from Jet's logistics and delivery expertise," Michelle Malison, retail analyst for Euromonitor. "By strategically locating its distribution centers and streamlining its logistics, Jet has doubled its one-day delivery (of its own first-party products) penetration rate from 25% to 50% of US households since launch, and is approaching 99% of US households for two-day delivery. In select high-density regions such as New York City, Jet often is able to offer same-day delivery at no additional cost to both Jet and its shoppers."
– It's a year-old startup that wasn't yet profitable. Now Jet.com enters the books as the largest-ever e-commerce startup acquisition. Walmart announced Monday that it would purchase the site for $3.3 billion, with all but $300 million of that in cash; the rest takes the form of Walmart shares, reports the Wall Street Journal. The move is a major salvo in Walmart's battle against Amazon. How the deal—which will preserve Jet.com but beef up Walmart.com using its software—is being framed: Walmart has quite a hill to climb. Though Walmart.com launched in 2000 to Amazon.com's 1994, Walmart's online sales amounted to $14 billion in 2015, to Amazon's $107 billion, notes the Journal. Including brick-and-mortar sales, though, brings Walmart's revenue to $482 billion. In a year, Jet.com reached a run-rate of $1 billion in revenue. But at Business Insider, Hayley Peterson delves into three reasons—customer base, distribution center potential, and Jet.com's shipping prowess—why the acquisition could become a "nightmare" for Amazon, proclaiming "everyone is underestimating Walmart's ability to crush Amazon." At Reuters, Jennifer Saba writes of some of the things that are holding Walmart back, among them, Amazon's move into Walmart's turf with expanded fresh-food delivery. TechCrunch has some interesting details on Jet.com founder Marc Lore, whose prior business, Quidsi, was scooped up by, yes, Amazon for $545 million. Lore could walk away with $750 million from the Jet.com deal; he'll remain at the helm. Your bit of bar trivia: Jet.com takes the e-commerce startup sale record from Zulily, which was acquired by QVC for $2.4 billion, reports recode.