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Web Site Executive Shuffle and Search Underway

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CINCINNATI ( -- In the wake of the departure of its No. 2 executive, Wal-Mart has named CEO John Fleming executive vice president and chief marketing officer of the Wal-Mart Stores division, which encompasses U.S. supercenters and discount stores.
Wal-Mart's Web site has just launched a music-download store to rival Apple's iTunes.

Mr. Fleming will continue to oversee the online unit that has been going gangbusters since late last year when its holiday shopping traffic increased 68% over the previous year.

Search for online CEO
Raul Vazquez -- who arrived by way of Aegis Group's Carat Interactive two-and-a-half years ago -- is one of the most senior people left running daily operations at the online unit. The company is now searching both for a new online CEO to report to Mr. Fleming and a new top merchandising executive to report to that CEO.

The moves come weeks after Carter Cast, senior vice president of Web site marketing and merchandising, left Wal-Mart to become the CMO of online auctioneer eBay.

Mr. Vazquez promises won't miss a beat. "One of the things we give [Carter Cast] credit for now is the development of the managers and teams who were under him, so we feel a high degree of confidence in our ability to lead even though he is gone."

Though he assumed his Wal-Mart CMO duties May 2, Mr. Fleming will be spending much of his time at's headquarters in Silicon Valley until his replacement is found. "We don't feel there's a need to hurry and just find someone," Mr. Vazquez said. "We need to focus on finding the right person, someone who's going to understand our business, who understands retail and the Wal-Mart culture."

Online unit gets attention
It's easy to see why executives are getting attention. Though Wal-Mart doesn't break out sales figures for the online unit, its holiday traffic spike beat the top online and offline competitors alike.

Meanwhile, Wal-Mart's offline stores registered same-store-sales growth in the low single digits that lagged behind its top competitors.

For Mr. Vazquez, the key is for to drive sales for Wal-Mart, and vice versa, by filling niches and voids giant supercenters can't.

Music downloads
Amid the executive shuffle last week, launched a service aimed at dial-up Internet users that lets them create custom music CDs that can be shipped to their homes at prices comparable to what they'd pay for downloads. That follows a successful launch last year of a digital-photo-processing program in which people can upload their digital photos to the Web site and pick up the prints at their local Wal-Mart.

"We see a lot of our growth and a lot of the value we deliver to customers in integrated services and multichannel offerings," Mr. Vazquez said, adding that having Mr. Fleming in Bentonville, Wal-Mart’s Arkansas-based headquarters, working on both parts of the business should facilitate even more integrated offerings.

Controversial strategy
The complementary strategy hasn't always been without controversy. Some executives close to the company cited a decision under Mr. Fleming's predecessor as Wal-Mart Stores CMO -- the departing Bob Connolly -- to distribute the chain's 2004 holiday circular exclusively online as one possible cause of Wal-Mart's lackluster holiday-sales growth.

"We think of what we did last year as being successful," Mr. Vazquez said. "There are a bunch of different strategies that we're considering [for this year]. We always want to be focused on is how does the customer want to hear from Wal-Mart, whether it's through the online channel, maybe a paper circular, maybe a combination of the two."

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