Microsoft, led by CEO Satya Nadella, has partnered with Walmart in its bid to buy TikTok.
As it seeks to remove Oracle’s bid to acquire TikTok, Microsoft has called in a surprise ally in its bid to acquire the massively popular social media platform: Walmart.
For everyday shoppers, the idea that America’s largest retail box joins a tech giant to potentially buy an app that’s mostly targeted at Gen-Z users may seem daunting. But industry observers say the move means perfectly: Without its own e-commerce platform, Microsoft could use Walmart’s growing online store to sell products on TikTok – a key feature of tech rivals Instagram and Facebook.
“By using Walmart, [TikTok] can drive the angle of social trade-offs, ”says Alex Zukin, an analyst at RBC.
For Walmart, TikTok could serve to bolster retailer competition with Amazon for a share of the online shopping arena, according to Wedbush analyst Dan Ives, who issued a report on the negotiations on Thursday. (Amazon, confronted with several government anti-trust probes, has not been named as an interested party in the TikTok negotiations.)
Walmart announced Thursday its involvement in the negotiations, stating that it was “confident” that it would satisfy the concerns of U.S. regulators, as well as users. It is the latest twist in a saga that has placed TikTok at the center of geo-political tensions between the United States and China. Earlier this month, President Donald Trump issued an executive order demanding that TikTok’s China-based parent company ByteDance sell or close its U.S. operations by September 15, under national security orders.
Microsoft emerged as an early bidder for the company, which claims more than 100 million daily users and which analysts expect to fetch a price between $ 20 billion and $ 40 billion. On target of TikTok’s assets from the US, Australia, Canada and New Zealand, Microsoft saw opportunity to gain a foothold in the online advertising business. But last week, Oracle announced that it was also in talks with TikTok for a potential acquisition – a move that is thought to be led by TikTok investors General Atlantic and Sequoia Capital, and backed by President Trump. Both companies have since submitted bids, with a deal likely to be signed by next week.
Another indication that negotiations are moving fast is the departure of TikTok’s U.S. CEO Kevin Mayer, a former full-time Disney director who joined the company just three months ago. Mayer was considered a key player for TikTok to navigate through regulatory issues, and his departure signals that a sale is almost all threatening, analysts say.
In a memo to staff, Mayer said he had not foreseen to what extent TikTok would be involved in tensions between China and the US, according to the Financial Times. And TikTok has backed down against the White House’s efforts to force it to sell by filing a lawsuit challenging President Trump’s first executive order. While it is unclear if the case will push back a September 15 deadline to sell TikTok, the company did not dispute a second executive order issued by President Trump on August 14 that gave ByteDance 90 days to sell the company.
Legal gymnastics can be difficult though if a deal is signed in the coming days. Both Microsoft and Oracle have long had ties to the White House that could weigh the deal. Larry Ellison, the founder and chairman of Oracle, has close ties with President Trump and is a major donor, while Microsoft often points to them in pending JEDI contract $ 10 billion to provide cloud services to the Department of Defense.
It appeared, at least for outsiders, that it was building momentum for Oracle to open Thursday. However, news of Walmart’s role in the Microsoft bid could turn the race back to the camp of Microsoft CEO Satya Nadella. “Financially, if Microsoft wants the deal, there’s no bid that Oracle could make to take it from them,” says Zukin.
