Microsoft In Talks To Acquire TikTok
- By Kurt Mackie
- August 03, 2020
A potential deal between Microsoft and Beijing-based ByteDance is in the works, Microsoft confirmed this past Sunday.
If passed, the deal would have Microsoft acquiring some of ByteDance's holdings in the popular TikTok social media service. Microsoft plans to operate TikTok in the United States, Australia, Canada and New Zealand if the deal goes through.
The discussions right now are "preliminary" and might not result in a transaction, Microsoft noted. Its deadline for concluding negotiations is set for "no later than September 15, 2020."
Microsoft apparently had encouraging talks on the matter with President Donald Trump. The announcement stated that "following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States."
Press accounts last week quoted Trump as planning to ban the TikTok service in the United States because it allegedly sends information on U.S. users to China. On Friday, Bloomberg News reported that Trump had ordered ByteDance to sell its U.S. TikTok operations. At that time, Trump also reportedly told reporters that he did not favor a deal as way to resolve the issue.
ByteDance has claimed to have already separated U.S. TikTok operations from its China operations, per a Nov. 27 Reuters article. The data from U.S. TikTok users is stored "entirely in the United States, with a backup in Singapore," according to the Reuters article. ByteDance took that action to appease the Committee on Foreign Investment in the United States, an agency of the U.S. Department of the Treasury that checks foreign investment transactions for possible national security risks.
Should the deal go through, Microsoft plans to add "world-class security, privacy, and digital safety protections" to the TikTok service. It also would assure that U.S. user data would get stored in the United States, Microsoft indicated.
The proposed deal is kind of odd. Microsoft lately seems to be sending signals that it is moving away from a focus on consumer applications, such as its recent announcement that it will end its Cortana personal digital assistant mobile apps for Android and iOS devices. Instead, Cortana is getting billed for use by Microsoft 365 business users.
Often, Microsoft's software company purchases haven't lived to see another day when it comes to consumer apps. If the consumer apps are not ended outright, they tend to get absorbed into other products. For instance, Microsoft killed off the popular Wunderlist list application after buying 6Wunderkinder. It folded the Wunderlist app into the Microsoft To Do list app a couple of years ago.
Kurt Mackie is senior news producer for 1105 Media's Converge360 group.