Wal-Mart, the nation's No. 1 retailer, said the new venture will begin recruiting a CEO and management team immediately.
The retailer said it expects the move "to greatly accelerate the development" of the Wal-Mart.com site "and to further complement efforts to attract offline customers to the Internet via the trusted Wal-Mart brand."
Wal-Mart will own a majority interest in the venture.
"The combination of the trusted Wal-Mart brand and retail expertise with the company-building and technology savvy of Accel Partners is an exciting development for our customers, Wal-Mart.com and the Internet," Wal-Mart Vice Chairman Lee Scott said in a statement. "Our people deserve a lot of credit for the progress we've made with our existing site in such short order. Through their help and effort, we are well positioned to take our site to another level."
Mr. Scott said putting Wal-Mart.com in the heart of Silicon Valley will give the site access to management talent and emerging Internet technologies.
The agreement is the latest indication of how Wal-Mart intends to be a major force on the Web--perhaps becoming the Wal-Mart of the Web.
Wal-Mart missed the early stages of the Internet. And it didn't introduce a much-anticipated revamped site till Jan. 1, missing the holidays. Yet even Wal-Mart's old, unimpressive site generated considerable traffic and sales. Wal-Mart.com ranked fifth over the holidays in terms of average amount--$167--spent by shoppers at the site, according to a study by Ernst & Young.
Wal-Mart isn't the first traditional retailer to turn to Silicon Valley. Last year, for example, Toys "R'' Us entered a deal with Benchmark Capital, a venture capital firm, to set up Toysrus.com as an independent operation in the Valley; that deal later fell apart. Last month, Microsoft Corp. made a $200 million investment in Best Buy as part of a broad strategic agreement that includes technology support from the software giant for the electronics retailer's bestbuy.com.
The agreement with Accel follows a deal Wal-Mart struck last month with America Online to develop a new co-branded Internet service and to stage other cross-marketing programs.
Accel, founded in 1984, is backed by investors including Dell Computer Corp., Walt Disney Co., Microsoft Corp. and Sun Microsystems.
Copyright January 2000, Crain Communications Inc.