A TikTok purchase could be imminent as two of the biggest American corporations, Walmart and Microsoft, may combine forces. Microsoft has long been involved in talks to purchase the social media platform, which is currently owned by a Chinese company called ByteDance. With additional financial resources from Walmart, a sale now seems more likely than ever.
ByteDance is essentially being forced to sell TikTok to a western company. After years of speculation and legal battles over whether TikTok was obligated to provide its members’ data to the Chinese government (as mandated by Chinese law) a turning point came in the form of India’s nationwide ban of the app. Without its Indian membership, the US became TikTok’s biggest audience but officials within the Trump Administration, as well as the president himself, haven’t been shy about wanting TikTok banned. From that pressure grew the idea that TikTok could instead be sold to a United States-based company, putting concerns about privacy to rest.
While specifics about what a US ban would even look like are loose at best, Trump has set a time limit on when that ban would happen. Since then, Microsoft has stepped up as the frontrunner in an increasingly crowded race to buy the platform. Now, CNBC reports that Walmart is joining Microsoft in a bid to purchase Tiktok’s operations in the US, Canada, Australia, and New Zealand. This decision fortifies Microsoft’s place as a potential buyer and could also give Walmart a strategic advantage in its ongoing commerce battle with Amazon.
Why Walmart Would Want a Piece of TikTok
Walmart has layers of plans to deal with the marketplace dominance of Amazon, in the form of Walmart Plus. While the company attempts to create a competing product delivery service, Walmart is introducing other revenue sources under its name. The method is reminiscent of Amazon’s choice to build Amazon Prime into a multi-faceted entertainment subscription that just happens to provide free shipping. Walmart’s statement on the TikTok acquisition says it could “provide Walmart with an important way for us to reach and serve omnichannel customers” and despite how unclear that is, the idea has already helped the company’s stock price.
In practice, this could mean almost anything and all of those things would be good for Walmart. There’s an untapped advertising potential with TikTok as its popularity with younger people and celebrities dwarfs that of Facebook. Walmart’s other partnership with Microsoft, its deal for the Azure cloud computing network, could also be a strong selling point for government agencies allegedly concerned about the privacy of American data. Walmart is generally in good standing with the American public (despite how anti-American many of its corporate practices are) and that level of positive brand recognition could actually help TikTok as well.
