- Walmart Inc (NYSE: WMT) has joined the bidding of TikTok through a partnership with Microsoft Corporation (NASDAQ: MSFT). And TikTok CEO Kevin Mayer is stepping down from the company.
Walmart Inc (NYSE: WMT) has joined the bidding of TikTok through a partnership with Microsoft Corporation (NASDAQ: MSFT). This would pit Microsoft and Walmart against Oracle. Oracle Corporation (NYSE: ORCL) CEO Larry Ellison is reportedly in the good graces of the U.S. government as he hosted fundraisers for President Donald Trump.
ByteDance, the parent company of TikTok, has been in talks to sell the U.S., Canadian, Australian and New Zealand operations in a deal that is reportedly valued at around $20 billion to $30 billion. While a buyer has not yet been decided, it could be announced in just a few days.
Walmart said that the integration of TikTok’s integration of e-commerce and advertising has a “clear benefit to creators and users in those markets.”
“We believe a potential relationship with TikTok US in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses,” added Walmart in a statement sent to CNBC. “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.”
TikTok has about 100 million monthly active U.S. users. And Walmart and Microsoft could potentially deploy ads to those users upon their deal going through.
Microsoft and Walmart already have a deep partnership with each other. A couple of years ago, Walmart signed a five-year cloud deal with Microsoft. As part of the deal, Walmart integrated with Microsoft’s Azure cloud infrastructure with the Office 365 productivity applications included.
Technically, TikTok was not looking to sell. The short-video format app company started looking for a buyer once U.S. Secretary of State Mike Pompeo announced in July that the U.S. was considering the banning of TikTok and other Chinese apps for security purposes. The U.S. government expressed concerns that TikTok had too much access to user data. And so the government banned TikTok from government-issued mobile devices earlier this year.
TikTok denied the claims by saying that its data is stored in the U.S. with a backup in Singapore. And the company does not have data centers in China.
Making a potential deal even more complicated TikTok CEO Kevin Mayer quit the company on Thursday due to political pressure and the forced sale. Mayer joined TikTok just 3 months ago.
“I understand that the role that I signed up for—including running TikTok globally—will look very different as a result of the US Administration’s action to push for a sell off of the US business,” said Mayer in the memo.