Walmart said it’s joining Microsoft in a bid for social media company TikTok’s U.S. assets, revealing its plans hours after the video company’s chief executive said he would step down.
CEO Kevin Mayer, a high-profile former Disney executive, is leaving three months after joining TikTok, in the middle of negotiations to sell the Chinese-owned short-form video app’s U.S. operations to Microsoft Corp. or Oracle Corp.
The sale of TikTok is happening as the company is under fire from the Trump administration as a potential national security risk due to the vast amount of private data the app is compiling on U.S. consumers.
Walmart lauded TikTok’s integration of e-commerce and advertising capabilities in other markets and said that a three-way partnership could bring that integration to the United States. The deal would help Walmart reach customers across virtual and physical sales channels and grow its online marketplace and its advertising business. Shares of Walmart rose almost 6 percent on Aug. 27.
“We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users, while satisfying the concerns of U.S. government regulators,” Walmart said in a statement.
Challenges
Amid growing distrust between Washington and Beijing, the U.S. administration said that TikTok was a national security threat and could share information about users with the Chinese regime.Trump issued an executive order banning U.S. transactions with TikTok on Aug. 6, effective in mid-September. He issued a separate order about a week later, giving ByteDance 90 days to divest TikTok’s U.S. operations and data.
The company has also been targeted in India, where TikTok was one of 59 Chinese apps banned by the Indian government in June following a border clash between India and China.
That month, Mayer wrote to India’s government saying the Chinese regime has never requested user data, nor would TikTok turn it over if asked.
Little Surprise
Mayer was scheduled to leave TikTok as part of the planned sale, as the global role he had been hired for would no longer exist, according to a person familiar with the matter.TikTok, in an emailed statement, confirmed Mayer’s departure.
Mark Natkin, managing director of Marbridge Consulting in Beijing, said Mayer’s departure isn’t a great boost for company morale right now.
“Whether TikTok reaches an agreement to sell its U.S. business or decides to duke it out in the courts, the role for Mayer will not be anything like that he had envisioned when he joined,” he said.
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