Microsoft is trying to buy TikTok's US operations (with a 45-day deadline)
Lots to TikTok about... The video sharing phenom owned by Chinese Bytedance has faced a torrent of scrutiny over its China ties. In June, India (aka the world's 2nd most populous country) fully banned TikTok over national security concerns. In July, President Trump considered banning TikTok in the US on concerns that American data could be passed to the Chinese government.
- On Friday, Trump said he will ban TikTok (the Committee on Foreign Investment has broad powers over foreign-owned companies). Out of TikTok's ~800M users, 100M are US-based.
- On Sunday, Microsoft confirmed its rumored talks to buy TikTok's US operations. Trump is reportedly on board, but with big stipulations.
How to lose a country in 45 days... Microsoft is giving off Kate Hudson vibes. Trump reportedly gave Microsoft 45 days to secure a deal with Bytedance. By September 15, Microsoft has to prove that it can move American TikTok data to the US and separate TikTok from Bytedance's access (aka, cut China out). If the acquisition goes through, Microsoft would own and operate TikTok in the US, Canada, Australia, and New Zealand.
- For Trump, letting Microsoft buy TikTok is better than igniting the wrath of 100M TikTokers with a ban ahead of the November elections.
- Keeping TikTok could also mean more jobs. TikTok 3X'd its US employees this year, with plans to hire 10K more (it's also a major NYC tenant).
It's not ideal, but there aren't many options... This deal would be making a Big Tech company even bigger. But Microsoft is one of the few with the knowhow and relationships to pull off a highly-regulated acquisition. It's also one of the only companies rich enough to afford the potentially $50B price tag. Besides Xbox and LinkedIn, MSFT hasn't ventured much into the social world. This deal would make the US digital ad market more competitive by creating a rival to Facebook and Google.