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Why TikTok’s CEO Thinks a Walmart Merger Could Work

Walmart’s emergence as a suitor for TikTok may have been a head scratcher for some but at least one very powerful player at the Chinese-owned video app sees potential in such a partnership.

Appearing on CNBC’s “Squawk Box” today, TikTok interim CEO Vanessa Pappas said the big box chain — which is partnering with Microsoft on a bid — and TikTok have some shared ground that could bode well for both parties.

“For us, we’ve been really focused recently on rolling out some e-commerce features. We’ve been providing that for our creator community as another way for them to earn a livelihood,” Pappas said during the interview. “I think there’s a lot of different synergies there.”

Reports surfaced this week indicating that Walmart was working with Microsoft, the frontrunner in talks to snap up TikTok, to broaden its advertising and expand its third-party marketplace. According to multiple reports, an acquisition of the company’s operations in the United States, Canada, Australia and New Zealand could be worth up to $50 billion.

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“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets,” a Walmart spokesperson told FN on Thursday of the company’s interest in acquiring the app. “We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.”

The retailer added, “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.”

Computer software maker Oracle, backed by investment firms Sequoia Capital and General Atlantic, is also weighing a potential bid for TikTok, which has not yet selected a buyer but is expected to announce a deal in the coming days.

The partnership wouldn’t be the first for Walmart and Microsoft: Two years ago, the Bentonville, Ark.-based retailer and the multinational tech empire joined forces in a five-year agreement that appeared to be a jab at Amazon. (Walmart is widely regarded as Amazon’s biggest retail rival, while Microsoft is the e-commerce behemoth’s largest competitor in the cloud services space.) Through their deal, Walmart was provided access to Microsoft’s Azure and 365 cloud services to launch projects focused on machine learning, artificial intelligence and data platforms.

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