Microsoft confirms it is in talks to buy TikTok after CEO talks to Trump
The president had also been weighing options over the past few days to force Beijing-based parent company ByteDance to divest in TikTok in the United States because of national security concerns, according to people familiar with the talks who spoke on the condition of anonymity because they were not authorized to discuss them publicly.
Microsoft confirmed it will “move quickly” on discussions with ByteDance and said it has given the U.S. government notice of a possible acquisition of the U.S. assets of TikTok.
This the first time Microsoft has confirmed that the company is in talks for Microsoft to purchase TikTok operations in the United States, Canada, Australia and New Zealand.
“This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections,” the tech giant said in its post.
TikTok and the White House did not immediately respond to requests for comment.
If it goes through, the acquisition could dramatically shift the Big Tech landscape, adding a legacy giant into the scramble for social media users’ attention. Microsoft, currently valued at $1.55 trillion, is the third-most valuable company in the world and is one of the only ones positioned to take on such a purchase. Microsoft was conspicuously absent from a landmark antitrust hearing on Capitol Hill on Wednesday, when Facebook, Google, Apple and Amazon chief executives testified on their companies’ power.
Buying TikTok would put Microsoft in a powerful position to compete with Facebook and Google’s YouTube, which operate dominant social media sites. Microsoft has focused mainly on enterprise software for the past decade, though it does own professional networking site LinkedIn.
Its absence from the social media market could also make it more likely regulators will approve Microsoft buying TikTok.
If Microsoft buys TikTok, it would also solve an ongoing issue for Republicans and Trump, who has attacked TikTok as a prominent target in his crackdown against China amid the novel coronavirus pandemic.
The continuing discussions, which Microsoft said it expected to conclude by Sept. 15, hinged largely on buy-in from the Trump administration.
Trump told reporters Friday night that he planned to ban the app in the United States, and had earlier indicated he would do so in retaliation for what he saw as China’s role in spreading the coronavirus.
“As far as TikTok is concerned, we’re banning them from the United States,” Trump told reporters aboard Air Force One on Friday.
But Saturday morning, TikTok officials were still waging a public campaign to garner favor with officials and fans, and assured users in a TikTok video that the platform was “here for the long run.” Passionate TikTok users took to the app all weekend to express their dismay and encourage their followers to find them on other social media sites.
Late last week, Trump was considering two main options to change the ownership of TikTok. One was through a process led by the Committee on Foreign Investment in the United States (CFIUS), which began investigating an acquisition by ByteDance of Musical.ly in 2017. The president considered signing an order to divest the company on Friday, according to the people familiar with the talks.
Trump also considered using a 2019 executive order to designate TikTok a national security threat and bar American companies and workers from doing business with it, the people said Friday.
Trump and Secretary of State Mike Pompeo have previously been critical of TikTok’s Chinese ownership, saying it’s a threat to national security and threatening to ban it. That prompted ByteDance to start to explore a sale, although the company would prefer to retain TikTok if possible, another person familiar with the talks, who spoke on the condition of anonymity because they were not authorized to speak publicly, previously told The Washington Post.
Microsoft said it informed the CFIUS of its TikTok talks. The company also said it might bring in other American investors to take a minority stake in TikTok as part of the deal.
Microsoft said in its blog that it would “ensure that all private data of TikTok’s American users is transferred to and remains in the United States.” Ensuring American data privacy has been a main crux of lawmaker’s arguments against Chinese ownership of TikTok.
TikTok has continually insisted that it already keeps U.S. user data stored in the country and that it does not hand over data to the Chinese government.
TikTok, which has been downloaded more than 2 billion times according to research firm Sensor Tower, lets users make short videos that show them dancing, cooking, pulling pranks or taking political stances. It is especially popular with teenage users, who have used the platform to take aim at Trump.
That included earlier this summer, when teens encouraged each other to reserve tickets to Trump’s June rally in Tulsa, hoping to inflate the expected number of attendees even though they never planned to show up. The Trump campaign said that it had no impact on the event.
