Walmart Inc. confirmed Thursday that it's teaming with Microsoft Corp. to bid on the U.S. operations of Chinese-owned social media platform TikTok.
The Trump administration is forcing TikTok's parent company, ByteDance, to sell the short-video app's U.S. business if it wants to keep operating in the country, citing security risks because of its Chinese ownership. The administration has threatened to ban the app in the United States.
TikTok says it has 100 million U.S. users.
Walmart said a partnership between Walmart and Microsoft "would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators."
"The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets," the Bentonville-based retailer said in a statement. "We believe a potential relationship with TikTok U.S. 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 business."
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The retailer didn't say how much the two companies offered for TikTok, and both Microsoft and TikTok declined to comment on the matter. Tech firm Oracle is also said to be interested in a possible acquisition.
Keith Anderson, senior vice president of strategy and insight for e-commerce analytics firm Profitero, said Walmart likely sees big potential in owning or having a significant interest in "a hypergrowth social platform [that is] home to influencers that drive significant product awareness and sales, especially with younger shoppers."
Anderson said the potential for Walmart's advertising business to grow revenue could stem from the power of TikTok's ability to let advertisers on the platform know whether their ads led to purchases at Walmart.com or in stores.
As for Walmart's reference to its marketplace, Anderson said the retailer may see acquiring TikTok as a way to differentiate that part of its business from e-commerce rival Amazon's marketplace.
Walmart has already established a working relationship with Microsoft. The technology giant and retailing behemoth signed a five-year cloud-computing deal in July 2018.
The agreement lets Walmart use Azure, Microsoft's cloud-computing system, and Microsoft 365, its suite of office software, on the cloud to run the retailer's internal operations, power its website and analyze shopping data.
Walmart also put "a significant portion" of its e-commerce website and that of Sam's Club, its members-only warehouse division, on Azure as part of the deal.
Azure is the second-largest cloud-computing platform in the world, behind Amazon Web Services. The alliance between Walmart and Microsoft was widely seen as a means for both to compete against Amazon.
Information for this story was contributed by Joseph Pisani and Zen Soo of The Associated Press.