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How a Walmart, Microsoft TikTok sale would impact social media

Microsoft and Walmart have joined forces to become the frontrunner in the bid for the Chinese video-sharing app TikTok. . Yahoo Finance’s Alexis Christoforous and Brian Sozzi discuss what this could mean for the social media landscape with IZEA CEO, Ted Murphy.

Video Transcript

ALEXIS CHRISTOFOROUS: Microsoft and Walmart have joined forces to become the front runner in the bid for the Chinese video sharing app, TikTok. Though questions about whether or not TikTok's core algorithm can be included in the deal, have reportedly caused a bump in the road. But a Microsoft Walmart buyout here could greatly alter the social media landscape, and offer some fierce competition to Facebook. Joining us now to discuss is IZEA CEO, Ted Murphy. Ted good morning to you. You sort of specialize in these social influencers on the internet, and these influencers who talk about different brands. How might a Microsoft Walmart buy out of TikTok's US operations change the game for those influencers?

TED MURPHY: Well I think that what you're seeing, from an advertiser standpoint, is an extreme amount of interest in TikTok. It really has become the new. Thing. A lot of the requests that we're getting from marketers now, are specifically about TikTok. How to create TikTok content with influencers? And really, how to make those videos go viral. We've seen a lot of success with entertainment companies, in particular, getting literally billions of views on the content that they're creating with online influencers.

And when you think about a partnership between Microsoft and Walmart, taking over those operations, I think it really does two things. One, you know-- Microsoft has done a fantastic job with the LinkedIn platform, building out the APIs, building out the self-serve advertising apparatus for that platform, to make it really easy to use, and getting a huge amount of adoption on the self-service side. On the other side, when you look at Walmart, and Walmart's specialty in commerce, the idea that I can be a marketer and I can market my product directly inside the TikTok app, have a very seamless shopping experience where someone can just click to buy and have that product delivered in 24 hours-- or maybe less through some of the more recent announcements by Walmart. I think that that could be a huge competitor for Facebook and what they've been trying to do with social commerce.

BRIAN SOZZI: Ted, really interested in your business itself. It took a hit, like so many other companies, at the height of the pandemic. What have you seen in terms of new businesses? Are companies coming back? And do they want to work with that cool influencer with 5 billion followers again?

TED MURPHY: Yeah I mean, in the beginning of the pandemic it was really terrifying for us, to be honest. You know we saw a pretty steep drop off in our business. And then what we saw after that, was that the companies that were doing well and that their core business was OK, they really started to get very aggressive in influencer marketing. You know, if you're in the cruise industry, if you're an airline, influencers are not going to fix your problems. You've got bigger issues with people feeling comfortable just getting on a plane or getting-- or even having a cruise ship to deport part-- or port. But I think that you have a huge opportunity in businesses that haven't been as dramatically affected, or see opportunity in COVID.

ALEXIS CHRISTOFOROUS: I want to get back to TikTok for a moment, Ted, because I understand they make their money-- at least right now, that could change depending on who buys them-- through those in-app purchases. But for influencers, does being TikTok famous, so to speak, actually make you money?

TED MURPHY: Absolutely. I mean the people that are really creating high quality content on TikTok and have built a following, can make tens of thousands, hundreds of thousands of dollars, for an individual piece of content. It's just as fierce as you would imagine on YouTube and Snapchat, Instagram, but it's where advertisers, especially those that are targeting the younger consumers, are really focusing a lot of their effort right now. They're trying to figure out the platform, just as they've done with YouTube and Instagram in the past.

BRIAN SOZZI: Ted, if Walmart ultimately does get involved with this, they get a piece of TikTok in some form, what's the upside for them? You know how big a deal will this be for them, over the long term?

TED MURPHY: Well, I think that one of the biggest opportunities for Walmart is to make the brand really cool and hip again, with younger consumers. You know, I think that Amazon has done a great job positioning themselves specifically with younger buyers. They have a larger share of that market. And a purchase like this can really change the brand perception for Walmart. It can also open up opportunities for the Walmart marketplace and just commerce in general.

If you look at how TikTok is used in Asia, a lot of that is already through social commerce. They've done more integrations in Asia. They haven't really brought any of that to the US yet. So just as we've seen with Facebook, and what they've done with shoppable stories inside of Instagram, I think that you're going to see the same type of thing happen inside of TikTok. But Walmart and Microsoft together, can really make that a seamless experience and bringing the end-to-end solution to life much faster.

ALEXIS CHRISTOFOROUS: All right, we're going to leave it there. Ted Murphy, CEO of IZEA, thanks so much for being with us today.

TED MURPHY: Thank you.