In another twist to the TikTok saga, Microsoft and Walmart have reportedly joined forces to buy the troubled social media platform. TikTok has had a roller coaster ride for a while now. From the company facing a ban in the United States, an outright ban in India, and user privacy issues.
For TikTok keep its presence in the United States (as well as Canada, Australia, and New Zealand) the company was given 90 Days to sell off its operations in the US or face an outright ban.
Earlier this month Twitter was one of the companies that were reportedly interested in acquiring TikTok from Chinese firm ByteDance. That deal didn’t seem to have gone anywhere as Microsoft seems to be the front runner for the acquisition. Walmart, the gargantuan US retail chain, has joined Microsoft in order to get this bid over the line.
This wouldn’t be the first time that Microsoft and Walmart teamed up. Back in 2018, the two companies agreed to a 5-year deal that would see them take on Amazon in retail and technology. Walmart, in this deal, would use Microsoft’s Azure cloud services and Microsoft 360 across the company. The deal also saw Walmart and Microsoft work together on machine learning, artificial intelligence and data platforms.
Microsoft makes sense but why does Walmart want a piece of Tiktok?
Microsoft’s angle of this makes some sense. In a report by Forbes, Microsoft will gain a significant stake in the digital advertising space. TikTok has around 80 million users in the United States. According to eMarketer the online ad market expanded by about 16% in 2019.
That growth may slow down this year, but that will put Microsoft in decent range of companies like Facebook and Google.
The Walmart angle is, I think, a little more interesting. Walmart is reportedly looking at this from an e-commerce perspective.
“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.”
“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets”Walmart Statement to CNBC
The figure touted for this deal to happen according to reports is US$20 billion.
It looks like this deal if approved, could be a win-win for the two giants. Another indication that a sale is imminent is the departure of TikTok CEO Kevin Meyer. The reasons for his departure were political pressure and the forced sale of the company.
It will be interesting to see how this whole affair ends.