Walmart is partnering with Microsoft in a bid to buy TikTok

28 Aug 2020197 Views

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Walmart confirmed it’s working with Microsoft in a bid to acquire TikTok. The retailer previously teamed up with Alphabet and SoftBank to try and buy the social media platform, according to reports.

On Thursday (27 August), CNBC first reported that Walmart has teamed up with Microsoft in a bid to purchase social media platform TikTok.

Microsoft has been in the running to take over TikTok since US president Donald Trump signed an executive order earlier this month that could ban TikTok completely in the US unless it is acquired by an American business.

Trump said that this move is necessary to deal with the “national emergency” posed by TikTok, a technology platform that he claims is collecting data that could be accessed by the Chinese Communist Party.

Walmart confirmed to CNBC that it is interested in TikTok for retail and marketing opportunities. The company said TikTok’s integration of e-commerce and advertising “is a clear benefit to creators and users in those markets”.

The news broke hours after TikTok chief executive Kevin Mayer announced that he was stepping down from his role after only a few months with the company. “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,” Mayer said.

Walmart’s plans for TikTok

TikTok, which is run by Chinese parent company ByteDance, is a video-sharing platform that became available in the US in 2018 after ByteDance acquired Musical.ly. ByteDance has a similar app called Douyin, which is aimed at the Chinese market.

Douyin and TikTok have similar interfaces, but cannot access each other’s content. Each of the platforms have servers based in the markets where their app is available.

Douyin has a range of e-commerce features and the platform enables users to open a store on their profiles where they can link to products for sale. In December 2019, the Chinese app began expanding its e-commerce features, enabling users to see related products after they click into advertisements, rather than just the advertised product.

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According to CNBC, Walmart has plans to beef up TikTok’s e-commerce offerings in a similar manner.

Walmart said in a statement: “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.”

Walmart added that it is “confident” a partnership with Microsoft would meet the expectations of US government regulators and TikTok users in the US. Walmart’s interest in the social media company comes as it faces stronger competition from Amazon in terms of online retail.

Microsoft previously partnered with Walmart in efforts to compete with Amazon. In 2018, the companies announced a five-year partnership that involved the development of new projects using machine learning and artificial intelligence.

Interest from Google

A later report from CNBC said that Walmart had considered partnering with Google parent company Alphabet in an effort to acquire TikTok’s US operations.

The retail giant had reportedly been part of a consortium put together by SoftBank’s chief operating officer, Marcelo Claure. In this consortium, Walmart would have been the lead buyer, with SoftBank and Alphabet acquiring minority stakes. However, sources said the US government was looking for a technology company to lead the deal.

Sources familiar with the matter also said that Alphabet was more interested in taking TikTok on as a new cloud computing customer and that the company was not in a position to lead the deal. CNBC noted that Alphabet could face “significant” antitrust opposition if it acquired TikTok’s US business, due to its ownership of YouTube.

Earlier this week, the Wall Street Journal reported that TikTok had approached Netflix to “gauge its interest in a deal” but the US streaming giant turned down the opportunity.

There is still interest in acquiring TikTok from Oracle. CNBC reported that TikTok is set to choose between the Microsoft-Walmart offer and a bid from Oracle in the next few days.

Kelly Earley is a journalist with Siliconrepublic.com

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