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.
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?
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.
A deal with Microsoft and Walmart could draw on Walmart’s digital sales background to turn TikTok into a kind of e-commerce app for both creators and users, people involved in the talks said. That could make TikTok more like Douyin, ByteDance’s TikTok-like Chinese-language video app, which already has e-commerce integrated into it.
A deal with Oracle, the enterprise software company, would be more of a data play. Oracle could use TikTok’s data about social interactions to benefit its cloud, data and advertising businesses, the people said.
And so the most vibrant consumer app of the moment now seems destined to fall into the hands of one enterprise software company or another. Yes, Microsoft has demonstrated that it can acquire a big consumer property and keep it stable — some people may not even realize that it owns Minecraft or LinkedIn. But the TikTok challenge promises to be much harder — the company will have to somehow recreate ByteDance’s powerful algorithmic feed
, design a steady stream of new features and experiences to keep influencers engaged, and fend off fierce competition from Facebook, Snapchat, and a host of TikTok clones along the way.
In the past, TikTok was able to power through the many challenges facing it by relying on a remarkably adept and focused ByteDance team
that was born in an environment of hyper-competitive fast following. Nothing in the history of Microsoft, Walmart, or Oracle inspires much confidence that any of them is up to replicating that culture.
TikTok has surprised me with its cleverness before. But after the Trump administration finishes mugging ByteDance, it’s unclear to me how many of the elements that have made it so successful to date will survive. Perhaps one of the companies now circling it can replicate them eventually. But it seems just as likely to me that they will fail to grasp what made TikTok tick in the first place.