With Walmart joining Microsoft for TikTok deal, expect a strong e-comm play

The sell-off of TikTok’s US operations looks imminent, with retain giant Walmart deciding to join Microsoft in its bid to buy ByteDance’s video sharing app. As is known, the Trump administration has toughened its stance against TikTok and warned of banning the app over threat to national security. US President Donald Trump has signed an executive order mandating that TikTok sell its US operations by mid-September or cease transaction within the country.

 

Also read: TikTok's Kevin Mayer steps down as CEO

In its public statement issued regarding discussions with Microsoft involving TikTok’s service in the US, Walmart Inc. stated, “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.”

As per various media reports, the potential deal is valued in the range of $20 billion to $50 billion. A Wall Street Journal report mentions that ByteDance is seeking about $30 billion for TikTok’s US operations.

Kevin Mayer, CEO, TikTok, has quit the organisation. In his email to his colleagues, Mayer had written, “...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.”

As per media reports, prior to Microsoft, Walmart was part of a group including Alphabet, the parent company of Google.

Meanwhile, Oracle is the other strong contender for TikTok.

As is evident from Walmart’s statement, should they along with Microsoft win the TikTok deal, one could expect a stronger e-commerce and advertising play.

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