As first reported by CNBC, Walmart said it believes TikTok’s integration of e-commerce and advertising in the popular video-sharing app would be a valuable fit for its business.
“We believe a potential relationship with TikTok U.S. 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 said in an emailed statement to Variety.
The Bentonville, Ark.-based company added, “We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of US government regulators.”
A rep for Microsoft, asked for comment about the Walmart partnership, said that “at this time, the company has nothing to share.”
The other leading suitor for TikTok is Oracle, led by pro-Trump chairman Larry Ellison. A sale of the app by parent company ByteDance would encompass TikTok’s U.S., Canada, Australia and New Zealand operations.
The latest development for TikTok comes after CEO Kevin Mayer said Wednesday that he would resign, a little over three months after leaving Disney. His exit, signaling that a sale of TikTok is inevitable, comes after the Trump administration ordered Chinese internet giant ByteDance to sell the TikTok app business in the U.S., citing national-security fears, no later than Nov. 12. TikTok sued Trump and the administration over the forced divestiture but ByteDance now appears to be fully on a path to a sale.
Microsoft previously said it expected to conclude acquisition talks with ByteDance for TikTok by Sept. 15.
The pairing of Microsoft and Walmart “is the final piece of the puzzle that ultimately cements Microsoft successfully acquiring TikTok’s U.S. operations for likely $35 billion to $40 billion,” Wedbush Securities analyst Dan Ives said.
For Walmart, the big question is how much capital it would need to contribute toward a deal for TikTok as well as what the opportunity cost is in purchasing an ownership stake in the app, UBS analyst Michael Lasser wrote in a note.
TikTok would let Walmart tap into “a rapidly growing social media platform” to expand its push into e-commerce and digital advertising, the analyst wrote. “[C]onnecting with a younger audience is vital to [Walmart’s] long-term outlook, especially as more digitally native generations move into their prime consumption years,” Lasser wrote. “Having a better understanding of these younger consumers through their social media habits would be valuable to WMT.”
Currently, TikTok says it has more than 100 million U.S. monthly active users (up from 11 million in January 2019) and over 50 million daily users. To date, the app has been downloaded more than 2 billion times worldwide.
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