Wal-Mart buys Web video company Vudu

The move will help the retail giant get back into online movie sales

Wal-Mart Stores is taking another swing at the online movie business with the acquisition of Vudu.

The retail giant announced the deal on Monday following widespread speculation that an acquisition would be coming soon. Financial terms were not disclosed.

Vudu has developed software that is built into TVs and Blu-ray players and lets users rent or buy high-definition movies and TV programs over the Internet for instant viewing. It aims to make the process easy because users don't have to connect their TV to a computer to browse for and buy movies.

Vudu has licensed content from most of the major studios and offers around 16,000 movies. It will become a subsidiary of Wal-Mart and continue developing streaming Internet applications and services, the retailer said.

This isn't Wal-Mart's first attempt at selling movies online. It sold movie downloads for about a year until it shut down the service at the end of 2007. Wal-Mart continues to sell digital music online.

The retailer expects to close the deal in the next few weeks, it said.

Vudu started out selling a box that users connect to their TV to browse for and purchase movies. But the business model for such standalone boxes has proved challenging. Vudu competitors, such as Netflix, began building their technology into devices that were already in people's homes, such as the Xbox.

Vudu still sells the box, but its technology is now also built into TVs and Blu-ray players. Wal-Mart's statement about the acquisition made no mention of selling the standalone box.

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Nancy Gohring

IDG News Service
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