Why TikTok may not survive being sold

TikTok is in trouble. Over the course of less than a day, the company lost its CEO and gained a surprising new suitor. The breakout social app could be within days of making a deal to sell itself to an American company — but the turmoil surrounding the sale threatens to leave the company permanently damaged.

First, the CEO. In May, longtime Disney executive Kevin Mayer left the company to become chief operating officer at ByteDance and CEO of TikTok, its popular US subsidiary. “As one of the world’s most accomplished entertainment executives, Kevin is incredibly well placed to take ByteDance’s portfolio of products to the next level,” ByteDance founder and CEO Yiming Zhang said at the time.

Mayer was coming off the wildly successful launch of Disney Plus, which rocketed to more than 50 million subscribers in less than six months. Disney’s board of directors had passed Mayer over for the CEO job anyway, though, and so he had reason to leave. Thus began Mayer’s brief and mostly silent reign at TikTok, which was thrown into disarray earlier this month when President Trump ordered ByteDance to sell it within 45 days.

The sale could have left Mayer the COO of China’s ByteDance and also the CEO of its newly independent American spinoff company, which seems untenable. And even if Mayer had wanted to become CEO of TikTok, at the moment it remains unclear what TikTok will even be. One global company based in America? Multiple companies operating independently? A wholly owned subsidiary of a big-box retailer?

Whatever the answer is, Mayer said the hell with it. He wrote in a letter to employees:

In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for. Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company.

It’s hard to imagine Mayer didn’t see at least some of this coming. The investigation into ByteDance by the Council on Foreign Investment in the United States has been underway for almost a year now, and I wrote about the growing likelihood of a forced TikTok sale as far back as January. The pressure on ByteDance to sell was only ever going to ratchet in one direction so long as Trump is president, and it’s hard to believe Mayer hadn’t taken that into account when he signed up to become COO.

At the same time, even people who have mostly gotten used to Trump’s chaotic rule-by-whim can still occasionally find themselves surprised by one of his decrees. Certainly I do! Had the president not thought to act against ByteDance before the election, it’s possible Mayer would have had a longer and more productive run. At it stands, he’ll become a strange footnote in the story of TikTok and whatever becomes of it.

In the meantime, Vanessa Pappas, a former YouTube executive and the current general manager of TikTok in North America, will become interim CEO. Pappas is whip-smart and has acquitted herself well in a series of recent interviews; I hope she’ll get a chance to put her stamp on TikTok as its leader.

But there’s still the question of who will own TikTok, and today an odd new challenger appeared. America’s two hottest teen tech brands, Microsoft and Walmart, are teaming up for a bid. Here’s Melissa Repko at CNBC:

In a statement, the big-box retailer said TikTok’s integration of e-commerce and advertising “is a clear benefit to creators and users in those markets.” It did not say how it would use TikTok or whether it would be part of Walmart+.

“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,” it said. “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.”

I’m including the awful corporate jargon here to illustrate just how tone-deaf Walmart’s entry into this race has been. Perhaps TikTok’s destiny was always to turn into a kind of QVC for Generation Z, but Walmart’s language doesn’t inspire much confidence that it will be executed with much style or finesse.

Read the original article on theverge

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