Microsoft’s bid to buy TikTok just got more interesting, as Walmart confirmed Thursday that it’s working with the Redmond, Wash.-based tech giant on the deal.
According to a statement issued by the world’s largest retailer, the appeal is in the short video company’s integration of e-commerce and advertising, which “is a clear benefit to creators and users in those markets.” The company didn’t explain how exactly it planned to use the platform or any specific on how it planned to integrate the business.
But Walmart did say that partnering with Microsoft on an acquisition would offer “an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.”
Microsoft — which is best known for its desktop technologies, not mobile — may not be an ideal match for the popular social media app, but it is largely considered the frontrunner in the race to scoop up TikTok. Joining forces with Walmart helps solidify its effort.
The partnership offers Walmart some key advantages as well. While the retailer has deep enough business interest to pursue a deal alone, the notion makes less sense from a tech standpoint, as it doesn’t have a cloud infrastructure to run a behemoth social network. The app serves 100 million users in the U.S. and 800 million worldwide.
Microsoft’s Azure solution is the second-biggest cloud-computing platform by market share, according to Canalys, sitting between market leader Amazon Web Services and Google Cloud, which currently serves TikTok.
In addition to the U.S., Microsoft was looking to acquire TikTok’s operations in Australia, Canada and New Zealand, in a deal that experts estimated could be worth anywhere from $10 billion to $50 billion. It’s not clear if anything has changed now, with the partnership. Walmart’s market cap is $373 billion and Microsoft’s comes in at $1.73 trillion.
The other tech giant in the running is Oracle, which is based in Redwood Shores, Calif., and makes backend database technology, along with cloud and other enterprise software. Its interest in buying TikTok surprised the technology and retail industries; however, it does do substantial work in the retail sector.
While speculation has run rampant around Twitter, Netflix, Alphabet and even Apple, most serious speculation about the sale centers on either Oracle and Microsoft. It’s possible that another contender could step in, but Microsoft’s alliance with Walmart fortifies its efforts and brings some consumer cred to the table.
Previously, Walmart was said to be in discussions with Softbank, but there was no mention about the Tokyo-based tech conglomerate in this latest partnership news.
ByteDance, TikTok’s parent, has until mid-November to sell its interest in the U.S. business unit, thanks to an executive order signed by President Trump earlier this month. The White House and administration officials have been framing the app as a national security threat for months, due to ByteDance being a Beijing-based company.
In a note to employees explaining TikTok chief executive officer Kevin Mayer’s surprise resignation on Wednesday, the ceo noted that the business expects to “reach a resolution very soon,” and expectations run high that a deal will be announced and a new owner will be identified within days.