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Why You Should Be Wary of Walmart's Latest Acquisition

For online startups, it's starting to look like 2000 all over again.

In July, Unilever plc (UL) bought Dollar Shave Club, a website peddling disposable razors to members, for $1 billion-or around five times the company's forecast revenue this year. Then last week, Walmart Stores (WMT) bagged two-year-old online retailer for $3.3 billion.

These are huge sums to pay for unprofitable companies, but the upside is that they hand the big players assets that...