Putting an end to all speculations Microsoft has confirmed that the company is actively exploring options to buy TikTok. The Redmond giant has revealed that talks with ByteDance as well as the US government are on and if everything goes as expected the deal could be concluded by September 15.
As we reported earlier TikTok is under pressure to sell off its non-China business and the increasing trouble for immensely popular the short video app in the US, India and Australia has forced the company to explore all the options including selling off its business in US, India, Australia and Europe either to existing American investors or any other non-Chinese tech company.
On Saturday we also reported about Microsoft being the frontrunner in the race of acquiring the US operations of TikTok. As US President Donald Trump is adamant on banning TikTok on the grounds of users’ privacy concerns, ByteDance – the Chinese company that owns TikTok – wants to make the move before it’s too late.
Trump, however, has reportedly agreed to give a 45-day cushion period for ByteDance and Microsoft to negotiate and reach an agreement.
If Microsoft acquires TikTok, it would be a fresh beginning for the company in consumer technology. After making few failed attempts to acquire grounds in consumer business in the last few years, Microsoft successfully channelised its manpower, expertise and strategy towards enterprise and B2B model. The last few acquisitions made by Microsoft, be it LinkedIn or Github, clearly highlight the priorities of Satya Nadella and his team.
Interestingly, Microsoft doesn’t seem to restrict itself with the US operations of TikTok alone. The talks of TikTok acquisition by Microsoft also includes businesses in Canada, Australia and New Zealand. Besides Microsoft, the existing American investors in TikTok are also expected to be a part of the deal.
While Microsoft has assured that once the TikTok acquisition is through, all the data of TikTok US users would be located in the US itself. The company also assured authorities that the data would be deleted from all servers located outside the US. The spokesperson of TikTok, however, revealed that the data of all the US users are anyways located in the US itself. It is estimated that TikTok has nearly 100 million users in the US.
The acquisition of TikTok is not going to be a cakewalk for Microsoft as it may strain relations with its long term partner Facebook. In 2007, Microsoft invested $240 million in social media giant, acquiring 1.6% stake. In the last decade, both companies have worked together on various initiatives. In the last two months, Facebook has made few significant advances in the area of short video app to eat into the market fo TikTok, which includes shutting down Lasso and launching Instagram Reels. Just last week TikTok accused Facebook of employee unethical practices to attract TikTok users, while reports surfaced that Facebook is paying to TikTok influencers to ditch TikTok.
It’s not yet clear what could be the size of the deal if it goes through between Microsoft and TikTok. The overall valuation of TikTok is estimated to the tune of $25 billion. However, experts believe that it could go as high as $40 billion given the exploded growth and popularity of the short video app in the short span of time.