- Walmart has partnered with Microsoft in a bid for TikTok, the retail giant said Thursday.
- TikTok parent company ByteDance is expected within the next few days to announce a deal to sell off the app’s US operations in an effort to avoid a nationwide ban on the app.
- Walmart is the latest US company to be floated as a potential buyer. Other rumoured interested parties include Oracle, Twitter, and a group of ByteDance’s US investors.
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Walmart says it’s working with Microsoft in a bid to acquire part of TikTok’s operations and avoid the threat of the app’s ban in the US.
Walmart said Thursday it had partnered with the tech giant, which has long been the frontrunner in talks for an acquisition. Microsoft confirmed in late July it was exploring a bid to acquire TikTok’s operations in the US, Australia, Canada, and New Zealand – a deal with an estimated value between $US10 billion and $US50 billion. CNBC earlier reported on Walmart’s decision to join the bid.
TikTok parent company ByteDance has been exploring a sale of part of the app’s operations, including those in the US, ever since the Trump administration first threatened to ban the platform in the US earlier this summer. A deal is expected to be finalised within the next few days, according to multiple news reports.
CNBC first reported Friday that Walmart was exploring a bid for TikTok with the investment firm SoftBank, but it’s unclear if they’re still working together. Representatives for SoftBank and Microsoft did not immediately respond to Business Insider’s requests for comment on the reported bid for the social media app.
In a statement to Business Insider, Walmart said partnering with Microsoft could provide the retail giant with “an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.”
“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets,” the Walmart statement said. “We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators.”
Neil Saunders, managing director of GlobalData Retail, said Walmart could ultimately generate sales through the app.
“A social platform like TikTok would give Walmart easy access to the very audience it wants and needs to attract,” Saunders wrote in a note to clients on Thursday. “Having a serious stake in the world of social media would not only allow Walmart to bolster its marketing efforts, it would also give it access to a rich seam of data that would help it target shoppers more effectively in terms of building campaigns, product development, and a whole host of other activities.”
CNBC first reported a deal between Walmart and TikTok would be unlikely to succeed because the bid provides no cloud technology solution. However, the addition of Microsoft brings in the company’s Azure cloud infrastructure, which TikTok could switch over (from its current Google cloud service) if such a deal went through.
Walmart is just the latest company to be linked to the bidding war for part of TikTok, an app with 100 million monthly active users in the US and more than two billion downloads worldwide. With a lofty pricetag, TikTok’s US operations are something few companies can afford. Microsoft and Walmart – with market caps of $US1.73 trillion and $US373 billion, respectively – are two such companies who could make the multi-billion deal.
Other names floated in the past few weeks include Twitter, Netflix, Apple, and Alphabet. Microsoft and Oracle have emerged as the frontrunners, with various outlets giving conflicting reports about who is in the lead. Although Microsoft has ties with ByteDance CEO Zhang Yiming, a former Microsoft employee, Oracle has the verbal support of President Donald Trump.
Amid the scramble to bid for TikTok, the platform’s CEO announced his surprise departure late Wednesday night. Kevin Mayer, a longtime Disney executive, was hired just three months ago to serve as TikTok’s global CEO and work out of the company’s Los Angeles office. In a letter to employees, Mayer cited TikTok’s coming “corporate structural changes” amid its potential acquisition and fight with the Trump administration.
ByteDance has been exploring acquisition talks ever since the Trump administration first made known its intentions to force the China-based company to sever its ties with TikTok in the US – or face a nationwide ban. The US government alleges that the Chinese government can access the data of TikTok’s American users, posing a national-security risk. TikTok has consistently denied it provides access to this data, and says its US data is stored on servers in the US and Singapore.
Since late July, Trump has issued two separate executive orders aimed at TikTok in recent weeks. The most recent one gave a 90-day deadline, which falls in mid-November, for ByteDance to sell off TikTok’s US operations.
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