Who will Buy TikTok?

With Kevin Mayer quitting as CEO of TikTok, it’s clear a deal is about to be announced. It’s Microsoft vs. Oracle bids and with Walmart getting in on the Microsoft bid, it seems the most likely result.

Walmart desperately wants to become a tech company with its E-commerce progress in 2020. TikTok as a shopping channel makes a lot of sense, even as Microsoft tries to leverage its gaming and minecraft crowd to pivot into a GenZ audience.

We know TikTok will likely die in the hands of Microsoft, but the question remains: how fast? The TikTok sale saga remains the most entertaining thing in tech in the summer of 2020. ByteDance is set to make $Billions on the sale and they are the main innovator in apps today so they can replicate this in new ways.

In a statement, Walmart said, “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.”

Trump is old school and in spite of his ties to the Oracle CEO, we have to admit that deal makes no sense. Twitter is too poor to acquire TikTok, even with a bunch of other backers.

Only Microsoft & Walmart can afford to waste this much money. Microsoft wants to steal the AI, Walmart wants the brand pump. The forced sale also benefits China with a liquidity rush for ByteDance, already the best tech startup to come up in years. We know Softbank will keep investing in ByteDance. It will be a cash cow comparable to what Alibaba was for Softbank’s founder.

ByteDance has been treated like Huawei in Donald Trump’s efforts to appear strong against China tech. But ByteDance is a genius app-product company. It can replicate and beat most other app makers in any number of fields with a superior AI-consumer interface, algorithm and recommendation engine. Microsoft is jealous and views TikTok USA like a prize.

TikTok, which is owned by the Chinese internet company ByteDance, has been ordered by the White House to sell its U.S. operations by mid-September. Walmart getting in on the deal makes it appear less risky for Microsoft, which is known for its very poor integration of acquisition targets in the past (such as Skype, Yammer, Nokia Devices and services, LinkedIn and so forth). The verdict is still out on GitHub. Microsoft is basically known for killing products. It’s not known for good consumer brand relations.

Walmart likely has more to gain from a joint acquisition with Microsoft of TikTok, than Microsoft does trying to learn from ByteDance’s AI recommendation engine. The reality is Microsoft would easily spend $20 billion on this just for the AI insights. This is because during the pandemic BigTech has more cash than anyone else.

Microsoft, with $137 billion in cash and a market value of more than $1.7 trillion, is far larger than other potential acquirers and has the deepest resources. Microsoft also has stellar cybersecurity and could ensure TikTok USA would no longer be a “security risk” of the CCP getting access to unlimited video data on global users. TikTok’s US consumer growth has been stunning, with at least 100 million active users in the U.S. alone.

TikTok is nearing an agreement to sell its American, Canadian, Australian and New Zealand operations in a deal that’s likely to be in the $20 billion to $30 billion range. It’s a veritable warchest for ByteDance in the cold tech wars moving forwards in an app Americans will likely kill and China can easily replicate in new forms, where Douyin will continue to exist.

TikTok is using the Oracle bid as leverage to force Microsoft and Walmart to pay the right amount. With the TikTok CEO quitting it’s clear he wasn’t involved in the process or the negotiations. ByteDance is the real owner of TikTok, of course, which is just one of its apps.

TikTok also argued it shouldn’t be treated in the same category as telecom companies, which opens the door for China to ban more American companies in China. Trump has also fired on Chinese nationalism with the forced move against ByteDance. But he is also playing into Chinese hands, giving ByteDance a huge cash injection with limited American value.

Walmart had been working with SoftBank on a bid for TikTok. It is seen as unlikely because there isn’t a technology backbone partner for the deal. Teaming up with Microsoft in the end made the most sense for a larger deal. It also bifurcates the future of the internet, even as ByteDance remains the most innovative consumer tech company globally.

The real winner is actually Facebook, which has removed a challenger without doing a thing but infiltrating the White House on the matter. This suggests Facebook has been used by the U.S. Government for its covert activities on citizens.

All Chinese companies are mandated by law to provide all data on their services to the Chinese Government if requested. If you think Silicon Valley data harvesting is impressive, you really haven’t seen anything yet with the Chinese surveillance capitalism economy that’s coming.

The real crux of the matter is a TikTok acquisition will improve Walmart+, it’s new subscription service to compete vs. Amazon Prime. Walmart can use incentives on TikTok to also become better at E-commerce and digital advertising with Microsoft.

The likely reuslt is a Microsoft acquisition with the help of Walmart and Softbank for TikTok is likely to sell its American, Canadian, Australian and New Zealand operations for a valuation in the $27 billion range. This is breaking news today on August 27th, 2020.

TikTok said it has been downloaded about 2 billion times globally. Sure, let’s give $Billions to one of China’s most innovative startups and think we’ve won. ByteDance, if anyone at the consumer product interface, has shown Chinese AI is winning.

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