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Walmart seeks TikTok deal with Microsoft in a bid for young shoppers



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“As far as TikTok is concerned, we’re banning them from the United States,” Trump told reporters aboard Air Force One as he returned from Florida.

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In a digital mashup that could reshape the retail landscape, Walmart is teaming up with Microsoft to make a play for the video app TikTok

Walmart says that partnering with the tech giant to purchase the U.S. arm of the ByteDance-owned social media platform could give it another way to promote its merchandise and connect with online shoppers.

“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 said Thursday in a statement. “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 potential bid comes a day after TikTok CEO Kevin Mayer resigned in the face of mounting pressure from the Trump administration, which ordered that the company’s U.S. division be sold to a company like Microsoft by Nov. 12, or be blocked from operating in the country.

“In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for,” Mayer said in an email to employees obtained by USA TODAY. “Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company.

In a recent executive order, President Trump said there was “credible evidence” that TikTok may share user data with the Chinese government. The administration originally said the app’s U.S. division had to be sold by mid-September, but then gave the company more time to find a buyer.

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A partnership with Walmart could clinch the deal for Microsoft, industry watchers say.  

The pairing would be “the final piece of the puzzle that ultimately cements Microsoft successfully acquiring TikTok’s US operations for likely $35 billion to $40 billion,” said Daniel Ives, an analyst with Wedbush Securities.

TikTok’s parent company ByteDance must accept that Microsoft is “the only true white knight around,” Ives said. Other tech giants either have too many regulatory concerns to make the deal or do not have the “treasure chest, infrastructure, and distribution to get a deal like this done.” 

And while it might seem surprising that Walmart, the world’s largest retailer, would want partial ownership of a social media platform popular with teenagers, industry observers say it’s a smart move that could give it a leg up in its battle with rival, Amazon.

“Although the world of social media seems a million miles away from selling cans of soup, Walmart’s interest in buying TikTok underlines the seriousness of its digital ambitions,” Neil Saunders, managing director of retail consultancy GlobalData, said in a note.

To better take on Amazon, Walmart needs to grow its online shopping base, Saunders said, particularly among younger customers.

“A social platform like TikTok would give Walmart easy access to the very audience it wants and needs to attract,” he said. “The combined expertise of the companies, plus Walmart’s ability to really commercialize the platform, make a potential joint deal one of the more interesting and feasible plays for TikTok.”

In response to the Trump administration’s order, TikTok filed a lawsuit claiming that the administration “ignored our extensive efforts to address its concerns.” It said the ban also deprived it of its Fifth Amendment right to due process. 

“We do not take suing the government lightly, however we feel we have no choice but to take action to protect our rights, and the rights of our community and employees,” TikTok said in a blog post Monday.

But the departure of Mayer, TikTok’s CEO likely hastens ByteDance’s need to work with Microsoft on the transaction, Ives said.

It could set the tech giant up for a major windfall. While the U.S. arm of the company is valued in the $35 billion to $40 billion range, it could be worth $200 billion “if navigated the right way,” Ives said.

Contributing: Mike Snider, Dalvin Brown

Follow Charisse Jones on Twittr @charissejones

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