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This article was published on August 31, 2020

Report: TikTok’s chosen an American buyer, but there could be issues

Report: TikTok’s chosen an American buyer, but there could be issues

A report from CNBC today revealed TikTok’s allegedly selected a bidder to take over its US, New Zealand, and Australian business — and it’ll reveal who that is very soon. Word is that it’s down to Walmart and Microsoft or Oracle.

CNBC reports that TikTok’s executives could announce the deal as early as September 1. While we don’t yet know who the lucky suitor is, the smart money’s on Walmart and Microsoft — yeah, I didn’t think I’d be saying that about a social media app in 2020 either. The other likely contender is Oracle. Under the terms of President Donald Trump’s first executive order on the matter, TikTok parent company ByteDance would have had to close a deal with its American bidder by the middle of September. It’s since extended that deadline to November, but it’s certainly in ByteDance’s best interest to get the deal inked sooner rather later.

Walmart’s interest in TikTok surfaced last week, when it emerged that it was joining forces with Microsoft. It’s apparently hoping to use the social media app to boost its e-commerce profile and its appeal to young people. As Walmart said in its corporate statement: “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.” It also expresses admiration for the way TikTok has “integrated e-commerce and advertising capabilities in other markets,” presumably referring to its China-only sister app, Douyin. Douyin uses its content creator to hawk its merch, and the New York Times describes it as having “the kind of reach among young buyers that Walmart would love to have.”

Microsoft’s interest in TikTok predates Trump’s executive order. It paused the deal when Trump apparently expressed disapproval, but later announced it was continuing discussions with ByteDance. According to CNBC, Walmart had to team with Microsoft as the US government wanted a tech company to lead the deal. Presumably it (the government) hopes that transferring the data to US-based servers could alleviate some of the

That’s not to say that it’s smooth sailing from this point on, however. Last Friday, the Chinese Ministry of Commerce expanded its list of controlled exports to include AI tech, which is the backbone of TikTok. In other words, ByteDance would have to get special dispensation from the Chinese government in order to sell its American interests. It could complicate the deal at the final hour. TikTok later issued a statement saying (translated) it would strictly abide by the new rules.

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We’ll have to wait and see who TikTok’s new American parent will be.

(via CNBC)

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