Kanyi Maqubela and others debate why Microsoft or Walmart might buy TikTok as the U.S. pressures a sale. TikTok has 800 million users globally, 80 million in the U.S., with 60% aged 18-25. Walmart wants to merge e-commerce with social media; Microsoft's fit is less clear. The real question: will ByteDance founder Zhang Yiming actually sell before the deadline hits.
Says that Microsoft, Walmart is the front runner at this stage. You got any reason to bet against that?
The, the sources that I have are saying that Walmart and Microsoft are indeed the front runner. There is a good question as to whether or not they're going to be the right acquisition target. It's a complicated transaction to have two companies trying to figure out how to split an asset as large and as complex as TikTok. But I ultimately think that the only way that Walmart, who's so somebody who I understand truly, truly wants the asset can get access to it.
Yeah.
Why do you—
I mean, we're all trying to read in the calculus that Walmart is churning through, but what is it truly in? What's in it for Walmart that we might not understand quite yet?
The truth of the matter is almost any technology company or commerce company in the United States would benefit from having an asset such as TikTok. It has 800 million users globally, 80 million in the US. 60% of the user base is in that really highly sought-after demographic, the 18 to 25, and they're highly, highly engaged. It's a very, very valuable user base with an extreme level of growth and a very unique social element that's actually been hard for the US-based companies to replicate. For Walmart in particular, one of the things that's really important to understand is that there's an opportunity for e-commerce to get intersected with social media and with social in a way that has not yet been done successfully in the United States. And everyone from Facebook to Google and Instagram, Twitch are trying to figure out the way to think about adding commerce into social. And Walmart wants to play a part in that.
Hey, Kanyi, it's Deirdre on the West Coast. I want to pick up on something that John mentioned to our Julia Boynton earlier. I also found it so interesting that when Vanessa Pappas came on CNBC, the interim TikTok CEO, earlier today, she said a few times that she wasn't involved in deal conversations. This is also the reason that Kevin Mayer left. Now, it raises a few questions to me. One is, how involved can the American leadership really be if it's not even involved in deciding the company's future? And by the way, American leadership that ByteDance has touted as evidence that it's not totally Chinese controlled. And two, another question: do you think that ByteDance founder Zhang Yiming will actually give it up or perhaps let the deadline go and deal with the consequences?
Well, the most important thing to share is that dealing with the consequences is probably a nonstarter if you're ByteDance at this point, because the US government has expressed seriousness. And it's really important to recognize the fact that this is a broader conversation than simply what's happening between one company and a series of potential acquirers. This has been something that's been happening between the United States and China at the technology level, frankly, now for over a decade. Google, Facebook, Twitter, Tumblr, Reddit, Pinterest, Discord, Slack, Wikipedia are all banned in China and have been for a while. And so the United States is trying to figure out the right way that they can respond. And this is thus far how they're doing it. And so what you are indeed seeing, to your good point, Diedre, is that this isn't simply a conversation between a CEO and a potential acquirer. This is actually a conversation that's a little bit more broad.
