A takeover by software giant Microsoft could possibly prevent the ban on the video platform Tiktok threatened by US President Donald Trump.
Microsoft confirmed on Sunday (local time) for the first time that it intended to purchase Tiktok’s US business. CEO Satya Nadella and Trump had exchanged views, now Microsoft wants to have further talks with the Chinese Tiktok owner ByteDance. The goal is to agree a deal by September 15.
ByteDance is under high pressure to sell Tiktok’s US business as Trump has announced a ban on the popular app in the United States due to security concerns. The US government fears that data on US citizens will fall into the hands of the Chinese Communist Party over Tiktok. Trump wants to push back Beijing’s influence in the United States with all his might, other Chinese companies like the telecom giants Huawei and ZTE have already felt this.
However, should a US company take over Tiktok’s business in the United States, the app could continue to have a future there. ByteDance has therefore been trying to separate its international platform from the Chinese version for a long time. The US media had already reported an interest from Microsoft on Friday, but afterwards Trump initially said no and reiterated his intention to ban it. Now Microsoft has officially spoken for the first time.
The company said that Trump’s objections should be taken seriously, but that the takeover plan would be followed up after the conversation between CEO Nadella and the president. This indicates Trump’s accommodating and possible agreement. Previously, the Wall Street Journal, citing insiders, reported that negotiations between Microsoft and ByteDance had been stopped for the time being due to opposition from the White House.
Trump himself did not initially respond to the Microsoft message. His finance minister Steven Mnuchin had previously said that there was a non-partisan agreement that Tiktok could not remain in its current form in the United States. Secretary of State Mike Pompeo said on Sunday Fox News that Trump would “take action in the coming days to address a wide range of national security threats posed by software linked to the Chinese Communist Party.”
Microsoft emphasized that a takeover would only be considered in agreement with the government and as part of a security check and clear evidence of benefits for the US economy. The dialogue with the Trump administration should continue during the further talks with ByteDance in the coming weeks. Microsoft plans to take over not only Tiktok’s US business, but also those in Canada, Australia and New Zealand.
The group is also open to other investors who participate as minority partners. This could open a door for a number of existing ByteDance American shareholders around the venture capitalist Sequoia Capital, who are also said to have been seeking a takeover on their own for some time due to the impending ban on the US government. However, Microsoft emphasized that the negotiations are in a preliminary stage and that there is no certainty that an agreement will ultimately be reached.
Tiktok is an internationally successful video platform that is offered in 65 languages in 175 markets. Users can upload clips they have created themselves or view others. In mainland China there is only the censored version Douyin. Tiktok assures that the platform is about creative content that protects “privacy and security”. The Chinese government has no access to user data and has never asked for it. The user data would be stored and processed in the USA.
In the United States, Tiktok claims to have 100 million users, making it an extremely attractive acquisition target. Microsoft could thus emerge from the political scramble for the app as a laughing third party – the software company does not yet have its own social media business. Tiktok is experiencing rapid growth and has long been the trendiest big platform among younger people. How much Microsoft would have to pay for Tiktok is so far unclear. But it should be a double-digit billion amount.
- tiktok: © prima91 – stock.adobe.com