MicroMartTok? Sure, why not.
Think of all the data and ad targeting capabilities.
It’s Friday. Or so I’m told. So we’ll keep it short.
MicroMartTok?
Yep, Walmart and Microsoft are teaming up to put a bid in for TikTok. Nothing says rugged capitalism like the world’s largest companies entering into a joint venture to try to buy a popular social platform.
As Recode’s Jason Del Rey pointed out to me yesterday, Microsoft and Walmart have been dating for a couple of years now. In 2018, they first held hands
to further accelerate Walmart’s digital transformation in retail, empower its associates worldwide and make shopping faster and easier for millions of customers around the world. Through this partnership, Walmart has chosen Microsoft as its preferred and strategic cloud provider tapping into the full range of Microsoft’s cloud solutions.
(Image via Getty)
Fast forward to yesterday and Walmart confirmed in a statement that it and Microsoft want to enter a thruple with TikTok:
“We believe a potential relationship with TikTok US in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses. We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators.”
(Image via Sven Svenson, AFP)
But according to CNBC, Walmart was actually playing the field, looking to cheat on Microsoft with Softbank and Alphabet:
Before teaming up with Microsoft in recent days, Walmart was part of a consortium put together by SoftBank Chief Operating Officer Marcelo Claure, which also included Google parent company Alphabet, according to people familiar with the matter.
SoftBank’s Claure felt Walmart’s all-American image and Google’s cloud computing infrastructure backbone could be a way in for the Japanese technology company, which has specialized in buying young, high-flying technology companies in recent years, including Uber and WeWork, said the people, who asked not to be named because the discussions were private. The deal structure would have had Walmart as the lead buyer, with SoftBank and Alphabet acquiring minority stakes. One or two other minority holders held talks to join the consortium, two of the people said.
But brush past the notion that we’re at a point where the president issues an executive order forcing a company to sell itself, and we can see where Walmart sees an opportunity. We talked earlier this week about retailers becoming media companies in their own right. And while Walmart has had its own fits and starts with video (it bought Vudu in 2010 and then sold it to Fandango in April), looking at how the Chinese market has embraced the relationship between ecommerce and livestreaming.
The New York Times reports today:
That version of the app, Douyin, which works much like TikTok but is only available in China, has become not only a platform for goofy videos, but also an e-commerce destination with the kind of reach among young buyers that Walmart would love to have.
The Chinese social media giant that runs both apps, ByteDance, began testing e-commerce features on Douyin in 2018. That was well before the company rolled out a “Shop Now” button on TikTok in recent months that redirects users to shopping sites.
Smartphone users in China have taken, in a big way, to buying things while they watch people hawk the products — think QVC and late-night television infomercials reinvented for the mobile age.
Could Walmart learn from this? Perhaps. But maybe Walmart sees TikTok as a vehicle to reach Gen Z. Business Insider writes:
Perhaps most importantly, Walmart's TikTok success is helping [Walmart director of social media Jen] Durkin and her team to learn more about how younger people engage with the superstore.
"What we have always loved about social is that it's a chance to engage with customers," Durkin wrote. "Our reasons for joining TikTok are the same, it unlocks news ways for us to have fun with our customers celebrating seasons and fun merchandise with them."
And yesterday, Walmart said it was dropping two more of its ecommerce brands, Shoes.com and Bare Necessities. As Bloomberg notes:
The divestments follow Walmart’s sale of indie apparel brand ModCloth in October, and its decision earlier this year to shutter the Jet.com e-commerce site. After acquiring various brands and sites in recent years, Walmart’s U.S. online business now wants to simplify the shopping experience and better compete with Amazon.com Inc.
As for Microsoft’s role in the dalliance? When the world’s largest company can use one of the most popular social platforms that would then be run on one of the world’s largest cloud networks, imagine all the data that will get hoovered up and spit out across the Microsoft advertising network (which made a paltry $7.6 billion from search last year).
From Digiday, from last August:
“Microsoft signaled a commitment to advertising as a business with the expansion beyond Bing ads, the acquisition of LinkedIn, the application of AI capabilities, and the ongoing networking of their properties to create native, audience-based targeting solutions,” wrote George Manas, president and chief media officer at OMD, in an email. “These strategies have increased the scale and diversity of advertiser options and have given Microsoft unique assets in data and context that are likely appealing to advertisers across most industries, beyond just B2B.”
Of course this could all be rendered moot if Oracle wins the bidding. Or if the universe were really comical, we’d see Jeff Bezos buy TikTok -- not Amazon, but Bezos, whose net worth hit $200 billion this week.
Thank you for allowing me in your inbox, today and every day. If you have tips or thoughts on the newsletter, drop me a line. Or you can follow me on Twitter. If you liked this edition please consider sharing across your social platforms, including TikTok. Have a great weekend. Stay safe, stay healthy, stay smart. See you Monday.
Rick James, “1,2,3 (You, Her, and Me)
Some interesting links:
For agencies:
Mark Read on reopening offices, job cuts, Accenture and his £48 expenses (Campaign)
For marketers:
‘Contextual targeting is going to be the new black’: As IDFA restrictions loom, advertisers brace for the fallout (Digiday)
For social media:
Viral pro-Trump tweets came from fake African American spam accounts, Twitter says (NBC News)
What if Facebook Is the Real ‘Silent Majority’? (NYT)
Facebook’s Ties to India’s Ruling Party Complicate Its Fight Against Hate Speech (Time)
For business: