Microsoft and Walmart are teaming on a potential TikTok takeover deal
Think the Microsoft-TikTok negotiations can’t get any weirder? Walmart says hold my beer.
CNBC first reported on Aug. 27 that Walmart is teaming with Microsoft on a potential bid for TikTok’s US, Canadian, Australian, and New Zealand operations. Microsoft confirmed earlier this month that it was in the bidding for TikTok.
Walmart is trying to compete with Amazon. As CNBC noted, Walmart is looking to launch a membership program that’s an alternative to Amazon Prime. Walmart told CNBC via a statement that TikTok’s integration of e-commerce and advertising was of interest, as were TikTok’s creators, but didn’t say how and if TikTok would become part of Walmart+.
Walmart is a Microsoft customer (or, as Microsoft prefers to call the company, a “partner.”) In 2018, Microsoft and Walmart announced a strategic five-year partnership via which Walmart committed to using Azure, Microsoft 365, Microsoft AI, Microsoft’s Internet of Things (IoT) tools and technologies to modernize its retail operations. As is the case with a number of big Azure customers, Amazon is Enemy No. 1, as AWS is for Azure.
In early August, via a blog post, Microsoft officials said they planned to continue discussions with TikTok’s parent company, ByteDance, about taking over parts of TikTok’s operations. Microsoft execs said they’d complete the discussions no later than September 15, 2020, and during that time, Microsoft plans to continue discussions with the US government, including President Donald Trump, who has ordered ByteDance to divest itself of its US TikTok operations in the name of security.
Since early August, Oracle has joined the bidding for TikTok, with one report today claiming Oracle would actually be announced as the victor within 48 hours or so. (The 48 hours bit is connected to TikTok’s new CEO quitting yesterday and hinting a deal for TikTok was imminent.)
Microsoft originally was interested simply in TikTok becoming a Microsoft cloud customer (it currently uses a combination of its own and Google Cloud’s data centers to run its services here), according to a recent New York Times report. But once Trump got involved in a plan to oust TikTok from the US, Microsoft’s plans regarding TikTok changed.
TikTok has potential advertising and data-source value for Microsoft. Microsoft doesn’t have much of a consumer presence beyond Xbox/gaming at this point, as it has pivoted to become first and foremost an enterprise company under CEO Satya Nadella.