Walmart says teaming with Microsoft in bid for TikTok

AFP San Francisco, United States Aug 27, 2020, 11.13 PM(IST) Aug 27, 2020, 11.26 PM(IST)

Walmart to partner with Microsoft to acquire TikTok Photograph:( Reuters )

Story highlights

Walmart is likely interested in TikTok to better connect with younger shoppers who turn to the internet for lifestyle trends

US retail giant Walmart said Thursday it had teamed with Microsoft in a bid to buy Chinese-owned short-form video app TikTok.

The app has been at the center of a diplomatic storm between Washington and Beijing after President Donald Trump signed an executive order on August 6 giving Americans 45 days to stop doing business with its Chinese parent company ByteDance. 

The move effectively set a deadline for a sale of TikTok to a US company.

"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," the retailer told AFP.

Walmart is likely interested in TikTok to better connect with younger shoppers who turn to the internet for lifestyle trends, according to analysts.

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Younger people are much less likely to shop at Walmart, whether online or in real-world stores, according to GlobalData Retail managing director Neil Saunders.

"A social platform like TikTok would give Walmart easy access to the very audience it wants and needs to attract," Saunders said.

Having access to the social media sensation could help Walmart's marketing campaigns while tapping into "a rich seam of data" or product development and more, according to Saunders.

Walmart teaming with US technology colossus Microsoft was "the final piece of the puzzle that ultimately cements Microsoft successfully acquiring TikTok's US operations for likely $35 billion to $40 billion," according to Wedbush analyst Dan Ives.

'High stakes poker'

"While deal negotiations will be complex with a number of technology and data privacy issues that need to be worked out before an agreement is inked, we believe ByteDance is playing a game of high stakes poker with Microsoft looking like the only true white knight around," Ives said in a note to investors.

Also read| 'I have decided to leave the company': TikTok CEO Kevin Mayer resigns amid US government crackdown

TikTok CEO Kevin Mayer said Wednesday he had quit the company as tensions soar between Washington and Beijing over the Chinese-owned video platform.

Mayer's departure was taken by some in the market as a sign that a deal to sell TikTok is imminent. Oracle is also said to be in the bidding

Mayer's resignation came just days after TikTok filed a lawsuit challenging a crackdown by the US government over claims the wildly popular social media app can be used to spy on Americans.

TikTok, which has been downloaded 175 million times in the US and more than a billion times around the world, argued in the suit that Trump's order was a misuse of the International Emergency Economic Powers Act.

The platform — on which users share often playful short-form videos — is not "an unusual and extraordinary threat," it said.

The platform's kaleidoscopic feeds of clips feature everything from dance routines and hair-dye tutorials to jokes about daily life and politics. 

The company holds firm that it has never provided any US user data to the Chinese government, and Beijing has blasted Trump's crackdown as political.

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