Business

TikTok CEO resigns after 3 months, Walmart and Microsoft make joint bid to buy app

TikTok CEO Kevin Mayer has left the Chinese-owned video app firm just three months since joining, and only days since the company sued the administration of U.S. President Donald Trump over an executive order effectively banning it in the United States.

Kevin Mayer, who came to TikTok from Disney Plus, says 'political environment has sharply changed'

Shortly after Kevin Mayer was hired, the Trump administration deemed ByteDance's TikTok a national security threat, raising allegations that user information could be shared with the China's government. (Florence Lo/Reuters)

TikTok CEO Kevin Mayer has left the Chinese-owned video app firm just three months since joining, and only days since the company sued the administration of U.S. President Donald Trump over an executive order effectively banning it in the United States.

He will be replaced by U.S. General Manager Vanessa Pappas on an interim basis, TikTok said in a statement.

The resignation comes at a tricky time for super-fast growing TikTok as it tries to persuade both the United States and India that it is not a security threat, while at the same time holding discussions with prospective buyers following a second U.S. order demanding the sale of its U.S. operations.

Mayer was Walt Disney Co.'s top streaming executive before becoming chief executive officer of TikTok and chief operating officer of parent ByteDance on June 1.

"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," Mayer said in an letter to employees.

"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."

Walmart, Microsoft make bid

Walmart is the latest company to want a piece of TikTok, as the world's largest retailer made a joint bid with Microsoft to buy TikTok's U.S. business, according to a person close to the deal who isn't authorized to discuss the terms publicly.

Microsoft and Walmart have been business partners since 2018, when the companies signed a five-year partnership in which Microsoft provides cloud computing services that help run the retailer's stores and online shopping. 

Walmart said in a statement Thursday that a deal with Microsoft and TikTok could help it expand its advertising business and reach more shoppers.

Microsoft has confirmed discussions with TikTok; other tech companies such as Oracle are also reportedly interested in a possible acquisition.

While ByteDance hasn't disclosed its asking price for TikTok, the Wall Street Journal reported Thursday that it is seeking roughly $30 billion US for TikTok's U.S. operations. 

'Complex times': ByteDance CEO

ByteDance founder and CEO Zhang Yiming said in a separate letter reviewed by Reuters that the company was "moving quickly to find resolutions to the issues that we face globally, particularly in the U.S. and India."

He said Mayer had joined just as the company was "entering arguably our most challenging moment."

"It is never easy to come into a leadership position in a company moving as quickly as we are, and the circumstances following his arrival made it all the more complex," Zhang said.

How TikTok, its current owner ByteDance, Donald Trump, China and Microsoft are coming together in a political dance that is far more complicated than learning the "renegade." We explain just what is happening (so far) as the globally-popular social network could find politics and business combining to fracture its audience. 5:07

ByteDance employees told Reuters they were not surprised by Mayer's decision given TikTok's unpredictable future, and also because the ex-Disney executive has not had a significant role in some important decisions as he was still new to the team.

Zhang has been the key person in TikTok sale talks, said two people with knowledge of the matter. But Mayer represented TikTok to discuss with senior executives of interested buyers just days ago, a third person said.

TikTok's decision to launch a $200 million US "creator fund" in July was spearheaded by TikTok's former head Alex Zhu, though Mayer was also directly involved, said two of the people. The project was initiated internally much earlier than Mayer's arrival, one of the people said.

"The learning curve was steep for him, from daily operations to geopolitical implications," said one of the people.

ByteDance did not immediately respond to Reuters' request for comment.

"Whether TikTok reaches an agreement to sell its U.S. business or decides to duke it out in the courts, the role for Mayer will not be anything like that he had envisioned when he joined," said Mark Natkin, managing director of Marbridge Consulting in Beijing.

Republican senator reacts:

Mayer's departure is not a great boost for company morale right now, Natkin said.

His successor Pappas joined TikTok in January 2019 as U.S. general manager. She was previously global head of Creative Insights at Google's YouTube, her LinkedIn profile showed.

Challenged in India as well

Amid growing distrust between Washington and Beijing, Trump complained that TikTok was a national security threat and could share information about users with China's government.

Trump issued an executive order banning U.S. transactions with TikTok on Aug. 6, effective in mid-September. He issued a separate order about a week later giving ByteDance 90 days to divest of TikTok's U.S. operations and data.

The company has been targeted in India, where TikTok was one of 59 Chinese apps banned by the Indian government in June following a border clash between India and China.

That month, Mayer wrote to India's government saying China's government has never requested user data, nor would TikTok turn it over if asked.

TechCrunch reported earlier this month that ByteDance was in talks with India's Reliance for investment in TikTok.

TikTok has become a global sensation since ByteDance launched the app in 2017, with operations in countries such as France, South Korea, Indonesia, Russia and Brazil. In April, the app hit 2 billion downloads globally.

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