Wal-Mart (NYSE: WMT) may be looking at entering the largely failed waters of online grocery shopping, according to sources. If the world's largest retailer is really on the cusp of trying to form a strategy to deliver grocery products to customers in the markets it serves in the U.S., it may indeed have something worth fighting for.

Unfortunately, the past of online grocery shopping is littered with failures -- most notably, Webvan. While the concept is very neat and handy, the logistics just have not worked for any company yet. But then again, not many companies have the location breadth or resources of Wal-Mart. If any company could make this work, it would be Bentonville's brightest.

The retailer has the locations and the selection to serve almost every populous area of the U.S. -- all it needs is a strategy and a delivery fleet. Although the company's most prolific effort thus far deals with parcel delivery of food products (just like the model Amazon.com uses), it could trump all others by offering same-day or next-day delivery that could feature a majority of pre-packaged and fresh food from a local Wal-Mart location.

Sure, Wal-Mart may need to charge a delivery fee of recoup transit costs, but this is a field that no national company is working in from coast to coast. It's Wal-Mart's game if it wants it.

This morning's Wall Street Journal [subscription required] reports that Providence Equity Partners bought an $830 million stake in a privately-held Internet comparison shopping company. (Click here for my colleague, Tom Taulli's, perspective on this deal.) This could signal a top in the private equity cycle for two reasons:

• Private equity's loosening investment standards. In the past, a consistently profitable Internet company would be best off tapping the public markets in an IPO. NexTag's decision to take private equity instead of the IPO or corporate acquisition -- e.g., getting bought by Microsoft Corp. (NASDAQ: MSFT), Yahoo Inc. (NASDAQ: YHOO), or IAC Interactive Corp. (NASDAQ: IACI) -- markets suggests surprising weakness there, or a private equity market whose lax investment standards make it willing to pay more than public equity investors for NexTag.
• Scrambling out of the comfort zone. Providence Equity has typically made purchases of traditional media companies. Its move into the Internet business could either signal it no longer perceives that traditional media companies are worth taking private, that consumer Internet companies have greater appreciation potential, or that the hidden details of this particular deal were just too good to pass up. But NexTag's market is highly competitive (e.g., there are many competitors such as Lowermybills, Lending Tree, Pricegrabber, Bizrate, Shopzilla, and Bankrate) and these competitors must deal with significant business risks (such as changes in interest rates -- much of NexTag's business is mortgage related -- and disruptive technologies). It is unclear what unique sources of competitive advantage Providence Equity brings to NexTag as it faces these business challenges.

Providence Equity's deal appears to be a rich one. Its 66% stake in NexTag -- which operates sites in the U.S. and U.K. that allow 11 million consumers a month to find the best prices on products and services sold online by Web retailers -- values the San Mateo, CA company at $1.2 billion. NexTag's website claims that it operated profitably in every one of 15 straight quarters through July 2005. But in the absence of specific revenue and profit information it's difficult to know whether Providence Equity's price makes sense.