Walmart says it is 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 that it has partnered with the tech giant, which has long been at the forefront of acquisition. Microsoft confirmed in late July that it was exploring an offer to acquire TikTok operations in the United States, Australia, Canada, and New Zealand, a deal valued at between $ 10 billion and $ 50 billion. CNBC previously reported on Walmart's decision to join the bid.
TikTok's parent company ByteDance has been exploring the sale of a portion of the app's operations, including operations in the US since the Trump administration first threatened to block the platform in the US earlier this summer. The deal is expected to be completed in the next few days, according to multiple news reports.
CNBC first reported on Friday that Walmart was exploring an offer to buy TikTok with investment company SoftBank, but it's unclear if they are still working together. Representatives for SoftBank and Microsoft did not immediately respond to Business Insider requests for comment on the announced offering of the social media app.
In a statement to Busines2Business, Walmart said that the partnership with Microsoft could provide the retail giant "a way that is important to us to reach and serve omnichannel customers, as well as to grow our third-party marketplace and advertising businesses."
"The way TikTok has integrated e-commerce and advertising capabilities into other markets is a clear benefit to creators and users in those markets," the Walmart statement said. "We are confident that the Walmart and Microsoft partnership will meet the expectations of US TikTok users while meeting the concerns of US government regulators."
Neil Saunders, Managing Director of GlobalData Retail, said Walmart could generate sales through the app. "A social platform like TikTok will give Walmart easy access to the audience it wants and needs to attract," Saunders wrote in a note to customers Thursday. “Having a serious stake in the world of social media will not only allow Walmart to boost your marketing efforts, but it will also give you access to a rich set of data that will help you target shoppers more effectively in terms of campaign creation and product development, and a host of other activities. "
CNBC first reported that a deal between Walmart and TikTok is unlikely to be successful because the offering does not provide any cloud technology solutions. However, the addition of Microsoft brings the company's Azure cloud infrastructure, which TikTok may change (from the existing Google cloud service) if such an agreement is executed.
Walmart is the latest bidding war company for a slice of TikTok, an app with 100 million monthly active users in the US, and more than 2 billion downloads worldwide. At a high price, TikTok operations in the US are something few companies can afford. Microsoft and Walmart, with a market capitalization of $ 1.73 trillion and $ 373 billion respectively, are two of those companies that could reach a multi-million dollar deal.
Other names have been launched in recent weeks, such as Twitter, Netflix, Apple, and Alphabet. Microsoft and Oracle have emerged as notable competitors, with various outlets providing conflicting reports on who is in the lead. Although Microsoft has relationships with ByteDance CEO Zhang Yiming, a former Microsoft employee, Oracle has the verbal support of President Donald Trump.
Amid the scramble to bid on TikTok, the platform's CEO announced his sudden departure on Wednesday night. Kevin Meyer, a longtime Disney CEO, was hired just three months ago to serve as the global CEO of TikTok and work out of the company's Los Angeles office. In a letter to employees, Mayer cited TikTok's upcoming "corporate structural changes" amid its potential takeover and fighting with the Trump administration.
ByteDance has been exploring acquisition talks since the Trump administration first announced its intentions to force the China-based company to cut ties with TikTok in the US or face a national ban. The US government claims that the Chinese government has access to the data of US TikTok users.
ByteDance has been exploring acquisition talks since the Trump administration first announced its intentions to force the China-based company to cut ties with TikTok in the US or face a national ban. The US government claims that the Chinese government has access to the data of US TikTok users, posing a national security risk. TikTok has consistently denied that it provides access to this data, saying that its US data is stored on servers in the US and Singapore.
Since late July, Trump has issued two separate Executive Orders directed at TikTok in recent weeks. The most recent set a 90-day deadline, falling in mid-November, for ByteDance to sell TikTok operations in the US.
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