Walmart expresses interest in TikTok, teaming up with Microsoft – TechCrunch

There’s been a flurry of TikTok news today, and the flood doesn’t seem to be letting up.

First was the announcement that Kevin Mayer, who joined the company just a bit more than three months ago, has stepped down overnight.

Now, we are receiving a bunch of deal-related news as well. Walmart has confirmed to multiple news outlets that it has expressed interest in teaming up with Microsoft in a bid for the fast-growing social app. Meanwhile, entertainment news site The Wrap reported that Oracle has placed a bid for the company, targeting a price around $20 billion.

This is a fast-developing story, and we will have more updates to come as we receive them.

TikTok has been heavily in the news since the Trump Administration threatened to ban TikTok from the U.S. market unless it sold its U.S. operations to an American company. On August 6, President Trump signed an executive order that gave TikTok’s Beijing-based parent company ByteDance 45 days to make a deal to divest the U.S. operations of its popular video-sharing app. The deadline was later extended until mid-November.

The order arrived at a time of heightened tensions between the U.S. and China, which are battling across a number of fronts outside of tech. Relations have deteriorated over issues like China’s move to assert more authority over Hong Kong with its new national security law, the detention of one million or more ethnic Uighur Muslims in China’s Xinjiang region, trade tariffs, Beijing’s military buildup in the disputed South China Sea, and the COVID-19 pandemic.

Tech companies were pulled into this conflict between the two superpowers. Ahead of the proposed TikTok ban, the U.S. government also had tightened its restrictions on China’s Huawei Technologies in recent weeks.

After Trump’s signing of the executive order, TikTok immediately fought back, most recently in the form of a lawsuit against the U.S. government that challenged the legality of the TikTok ban. In the interim, several U.S. tech companies’ names emerged as having had discussions with TikTok about a deal, including MicrosoftTwitterGoogle, Oracle, and even Walmart. Oracle on Thursday morning was said to be nearing a deal with the White House that would comprise $10 billion of cash, $10 billion in Oracle stock, and 50% of annual TikTok profit to flow back to ByteDance.

The actual risk presented by the TikTok app has remained in dispute. Trump’s executive order declared the social app, and other apps owned by Chinese companies that have entered the U.S., a threat to “the national security, foreign policy, and economy of the United States.” The concern is that the app could collect data on U.S. citizens, including location, browsing and search histories. Critics believe TikTok could serve as a conduit for the Chinese Communist Party’s propaganda and censorship arm, as well.

The TikTok app itself has become hugely popular in the U.S in recent years. Facebook CEO Mark Zuckerberg even declared TikTok’s existence one of the reasons why Facebook shouldn’t be considered a monopoly, in his testimony before the U.S. House Judiciary Committee in July.

According to data from app store intelligence firm Sensor Tower, TikTok has been download nearly 194 million times in the U.S., which is 8.2% of TikTok’s total downloads, including its Chinese version, Douyin. The U.S. also accounted for nearly $111 million, or 13% of TikTok’s total ~$840 million in revenue.

Mobile data and analytics firm App Annie said TikTok had 52 million weekly active users in the U.S. during the week of August 9-15, 2020, and this number continues to climb. Its weekly active user count in July (July 15-25) was up 75% from just the beginning of 2020, in fact. It also became the top grossing app on the iOS App Store globally in the second quarter, due to increased consumer usage of mobile apps during the pandemic. It consistently ranks in the top five for downloads across both the U.S. iOS App Store and Google Play.

Time spent in the app has grown as well, from 5 hours, 4 minutes per month as of August 2018 to 16 hours, 20 minutes per month as of December 2019.

Despite all that success though, TikTok’s next steps remain hazy. It needs to fight its lawsuit, net approval from U.S. regulatory agencies, and also continue to build trust with users in the throes of an acrimonious election season. We’ll have more developments as this story unfolds.

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