Microsoft Corporation In Talks With Bytedance To Buy TikTok
File Photo: (TikTok Official Logo)
Microsoft Corp. is exploring the possibility of acquiring the Chinese owned video recording, sharing and mimicking social media app 'TikTok' in the U.S., as President Donald Trump threatens to ban its operation in the U.S
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Bloomberg reported that the deal would give the Chinese software company, that focuses on social media services a soft landing in the U.S, and also relieve the company of U.S. government pressure.
The Trump administration has been weighing whether to direct China-based ByteDance Ltd. to divest its stake in TikTok’s U.S. operations, according to several reports.
The U.S. has been investigating potential national security risks due to the 100% Chinese control of the company and the TikTok app.
Representatives of both Microsoft and TikTok that were contacted declined to comment on any potential talks. The software company’s interest in the app was reported earlier by Fox Business Network.
“We are looking at TikTok. We may be banning TikTok,” Trump told reporters Friday at the White House.
“We are looking at a lot of alternatives with respect to TikTok.”
Any transaction could face regulatory hurdles. ByteDance bought Musical.ly Inc. in 2017 and merged it with TikTok, creating a social-media hit in the U.S — the first Chinese app to make such inroads.
As TikTok became more popular, U.S. officials grew concerned about the potential for the Chinese government to use the app to gain data on U.S. citizens.
The Committee on Foreign Investment in the U.S. began a review in 2019 of the Musical.ly purchase.
In recent years, CFIUS, which investigates overseas acquisitions of U.S. businesses, has taken a much more aggressive role in reviewing and approving deals that may threaten national security.
It can recommend that the president block or unwind transactions.
It’s also possible that other potential buyers could come forward, said another report familiar with the discussions.
Microsoft’s industry peers — Facebook Inc., Apple Inc., Amazon.com Inc. and Alphabet Inc. — fit the profile of potential buyers, though all are under antitrust scrutiny from U.S. regulators, which would likely complicate a deal.
A purchase of TikTok would represent a huge coup for Microsoft, which would gain a popular consumer app that has won over young people with a steady diet of dance videos, lip-syncing clips and viral memes.
The company has dabbled in social-media investments in the past, but hasn’t developed a popular service of its own in the lucrative sector.
In 2016, Microsoft acquired the LinkedIn job-hunting and corporate networking company for $26.2 billion.
Also, Microsoft can point to one acquisition that came with a massive existing community of users that has increased under its ownership — the 2014 deal for Minecraft, the best-selling video game ever.