Walmart and Microsoft Join Forces in a Bid for TikTok
By: Daniel Velasquez
Walmart and Microsoft's bid for TikTok started soon after President Trump issued an executive order on Aug. 6, threatening to ban TikTok if ByteDance, TikTok's parent company, did not sell within 45 days. A second executive order was issued, giving ByteDance an additional 45 days to destroy any US users data from TikTok and its predecessor app that it bought in 2017, Musical.ly. ByteDance is also being required to report to the Committee on Foreign Investments once all the US users' data has been destroyed.
The executive order is the result of the Trump administration adamantly believing TikTok poses a serious national security threat because of its parent company ByteDance and its ties to China. The fear for national security stems from the Trump administration and lawmakers claiming TikTok can be pressured into supplying the Chinese Communist Party with sensitive data and other intelligence of US users.
A spokesperson from TikTok has put out a rebuttal to the allegations stating, "We have never provided user data to the Chinese government, nor would we do so if asked."
TikTok is now suing the Trump administration over the looming ban, claiming it is "heavily politicized" and a ploy to further Trump's anti-China campaign. This only a part of what is an escalating US-China tech war that has already included Huawei and WeChat.
Walmart is looking to take advantage of this ordeal by potentially owning TikTok, using it to narrow the gap between them and their e-commerce rival Amazon. Which competes with them for sales, third-party sellers and advertisers. Obtaining TikTok, Walmart would benefit greatly. TikTok says it has about 690 Million users worldwide and about 100 million US users. Nearly 70 percent of their users are between the ages of 13 and 24, and 42 percent are in the 18-24 age group. The popular and rapidly growing social media app would allow for links to link directly to advertisers, third-party sellers and a great outlet to reach the younger audience entering their prime as consumers.
How does Microsoft fit in all of this?
Well, as the saying goes, "Nothing brings you together like a common enemy."
Microsoft too, has had their run-in with Amazon as they both competed for a ten billion dollar contract from the Department of Defense for cloud services. Microsoft is also a perfect fit because they have the ability and experience of storing an app's data and running a social media network through their cloud service. If Walmart and Microsoft win the bid, Microsoft has assured that they will have any data that is in another country deleted, and all US TikToker's data would be moved to the United States.
If the deal comes to fruition, it would be huge, leading to growth in social commerce catching up to China. It would be the younger generations' QVC late night and early morning infomercials.