The world’s largest brick-and-mortar retailer, Walmart just confirmed that it will be teaming up with Microsoft Inc. in a bid to own a piece of TikTok’s US business. TikTok’s parent company ByteDance’s founder and CEO Zhang Yiming has earlier shown interest in selling the short video app’s U.S., Canadian, Australian and New Zealand operations in a deal that’s likely to be in the $20 billion to $30 billion range.
Walmart owning a piece of a surging digital business that spews out bizarre videos made by teens and boomers comes off as a surprise as wall street saw a rise of as much as 5% in Walmart’s share.
“The way TikTok has integrated e-commerce and advertising capabilities in other markets is 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. 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,” a Walmart Official revealed.
With Walmart confirming its interests, the race to acquire TikTok saw another giant that include names like Microsoft and Oracle.
Walmart acquiring TikTok wouldn’t be a waste though as Wamart could leverage TikTok for its potential e-commerce and advertising capabilities to further boost Walmart’s consumer presence as it battles Amazon in the field. Amazon can not make a bid for TikTok given the anti-trust issue.
In a filing this week, TikTok said it has nearly 100 million monthly active U.S. users. Walmart had previously worked on a deal with SoftBank, but that bid faced resistance from the U.S. government because the bid did not include a cloud technology backbone component and structure, people familiar with the matter said. By teaming up with Microsoft, Walmart is now in a better position.
Two years ago, Walmart announced a five-year cloud deal with Microsoft. The retailer adopted Microsoft’s Azure cloud infrastructure and a bundle that includes the Office 365 productivity applications
Hours earlier, TikTok’s CEO Kevin Mayer resigned just after three months from his post citing a charged political environment for his exit.