According to sources, Microsoft isn’t the only organization that is showing interest in purchasing TikTok’s US operations. But the sources did not reveal the names of the other companies.
President Donald Trump said yesterday that he would sign an executive order to ban TikTok in the country at the earliest, raising the pressure on the Chinese owner of the famous short-video app, ByteDance to sell it.
The step will be the culmination of US national security concerns about the safety of personal data handled by Tik Tok. It would also be a big blow to Beijing-based ByteDance, which thanks to the commercial success of the app, was one of just a handful of truly global Chinese conglomerates.
Trump’s announcement followed frenzied talks between the White House, ByteDance and TikTok’s potential buyers, including Microsoft. But they were unable to deliver an agreement that would allow the Chinese firm to shed its US operations, according to people familiar with the matter. The talks are likely to continue in the days ahead.
Though the deal offers a rare opportunity to take advantage of the popularity of America’s fastest-growing social media app, not all companies are likely to be drawn to it. The value of TikTok is estimated at $20 billion to $40 billion, so few businesses will be able to afford this. While many of those who can afford it would actually find it hard to make the move due to the political reasons attached to the app.
Although any of the four tech giants, including Google, Facebook, Apple, or Amazon, could incorporate TikTok into their product offerings, these giants are already under the microscope in the US and are thus unlikely to engage.
Microsoft is larger than Google or Facebook, with a market valuation of $1.55 trillion, and actually has a strong image in Washington. The business was not invited to the antitrust hearing and has largely escaped recent criticism of the outsize reach of Big Tech.
Also, Microsoft is likely to face far fewer regulatory hurdles compared to most of its competitors because it also owns a professional social media network LinkedIn.
Media giants including Walt Disney and Verizon Communications have, in the past been interested in acquiring social media platforms. In 2016, for example, Disney contemplated but eventually decided against buying Twitter. Kevin Mayer, the US-based CEO of TikTok, was Disney’s former head of streaming and may be best placed to help strike a deal in the media industry.
Other social media firms, including Twitter and Snapchat, have lower valuations than TikTok and are thus unlikely bidders.
