Wal-Mart, Amazon.com Talk Alliance

Wal-Mart Stores Inc. and Amazon.com Inc. are in “secret talks to form a strategic alliance” that allegedly would benefit both companies, according to The Sunday Times of London.

Without quoting any named sources, the newspaper reported that Lee Scott, CEO of Wal-Mart, and Amazon’s founder, Jeff Bezos, are working on a deal that would be announced in about six weeks.

Spokespersons from both companies said they would not comment on the talks.

“Under the terms of the deal, Amazon would become Wal-Mart’s e-commerce supplier,” the Sunday Times reported. “Wal-Mart would gain access to the e-tailer’s expertise in managing the retail chain, from online ordering to home delivery.

“In return, Amazon would gain a presence in Wal-Mart’s 4,500 stores across the world, a cash injection and a percentage of the sales it makes through the retail giant. Wal-Mart is unlikely to take an equity stake in Amazon.”

The British newspaper quoted “one executive close to the talks” saying, “Jeff wants to build the biggest, best multi-category online retailer in the world. He has the technical expertise but not the sales, the customers or the money anymore. Wal-Mart has the sales, the expertise and the money, but it doesn’t have a strong online presence. It’s a neat fit but not one that will be easy to pull off.”

The deal would bring together two different companies.

Seattle’s Amazon.com began by selling books in 1995. The company has since expanded product offerings to include CDs, videos and appliances.

Amazon’s shares were up 22 percent in the first hours of trading Monday morning (at 10:45 a.m.) to $2-3/16 to $12-3/16 on the Nasdaq stock exchange. But that’s a far cry from the stock’s 52-week high of $75-1/4. Amazon’s 52-week low was $9-9/16.

Wal-Mart’s shares on the New York Stock Exchange seemed unaffected by the news. Stock in the world’s largest retailer was up 19 cents at 10:45 a.m. Monday to $49.11, a 0.4 percent increase.

With total fourth-quarter sales topping $56.5 billion, Bentonville-based Wal-Mart is the largest retailer in the world. Wal-Mart, which didn’t catch dot-com fever in the late 1990’s, ventured into the fray when it relaunched Walmart.com in November. But in February, the Internet arm laid off 24 employees — about 10 percent of its staff — to conserve cash and refocus efforts on the site’s technology.

Considering the potential for the deal, Bear Stearns analyst Jeffrey Fieler on Monday told clients, “we believe such a combination would make sense for Amazon as it would leverage its online retailing platform, while for Wal-Mart it would provide a more focused online strategy for a unit that has failed to gain significant traction despite a number of attempts.”