Microsoft & Walmart Join Forces In Bid To Buy TikTok
Update (1450ET): More than an hour has passed without any new TikTok suitors being announced? What a surprise. Of course, the notion that Wal-Mart is going after TikTok seems especially bizarre when one considers that the retailer is supposedly in the process of selling off business lines to focus on the "core business". On Thursday afternoon, the company announced plans to sell off two more non-core brands, Shoes.com and Bare Necessities, Bloomberg reported.
Update (1230ET): The FT is reporting that Microsoft and Wal-Mart have officially joined forces in their bid for TikTok. The biggest brick-and-mortar retailer in the US said in a statement that its partnership with Microsoft makes buying the social media breakout star a reasonable proposal. "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," Walmart said in statement. "We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators." Meanwhile, ByteDance’s founder and chief executive Zhang Yiming told WSJ and others that he is "moving quickly to find a resolution ot the issues that we face globally, particularly in the US and India" amid rumors that he is being sidelined in the deal talks. This all comes from a lengthy WSJ profile of the founder/CEO, which also recounts how Zhang first established a relationship with Microsoft, a relationship that eventually evolved into the ongoing talks to buy the company. With SoftBank now out of the picture, the other known bidders have been reduced to Oracle, and a group of US investors led by VC firms General Atlantic and Sequoia. Oracle is already reportedly preparing a $20 billion cash and stock bid, which looks a little low relative to other reported valuations that have put TikTok's US-focused business (along with its business in Australia, Canada and New Zealand) closer to $26 billion, or even $30 billion. $WMT's decision to partner with Microsoft shows it doesn't want to be distracted from its core business, said analyst Neil Saunders, managing director of the GlobalData Retail consultancy. “As large and competent as it is, Walmart is not primarily in the technology business…This is one reason why a potential partnership with Microsoft makes good sense." Still, the two companies seem like a fairly odd couple. And with two other strong bidders in the race, and the startup founder's unenthusiastic remarks about the prospects for a deal, it's possible this saga isn't anywhere close to over, despite reports that the first bids could be announced by the end of the week. Almost two weeks ago, Trump ordered ByteDance to sell the US operations within 90 days, or face being barred from operating in the US, similar to how the app is barred in India. We'd rather not delve into speculating about TikTok's operations, or its incipient ability to squeeze revenue out of its vast user base, but as the FT noted in a column earlier this month, it's extremely possible that whoever buys TikTok, Facebook - with Instagram already ripping off TikTok's most popular features - might emerge the real winner.
Update (1150ET): Fox Business' Charlie Gasparino now reporting that the fight over TikTok has come down to Microsoft's tech vs. Oracle's political connections. Headlines are hitting at least every hour now as the dealmaking enters its final, frenzied stages.
https://www.zerohedge.com/technology/microsoft-could-announce-deal-buy-tiktok-within-48-hours