It seems like TikTok can finally shed its Chinese origin from all over the world.
It has recently been revealed by people in the know that Microsoft is now aiming to acquire TikTok’ globally instead of going after their United States, Canada, Australia, and New Zealand operations only.
Though the news is yet to be officially confirmed, the question that arrives here is – Why did Microsoft make a sudden change from their previously confirmed plan?
The person happens to be tightly linked with ByteDance’s Asia-Pacific operations, under the condition of anonymity has revealed that Microsoft became attracted to the idea of buying all of TikTok’s global business due to the operational complexity, global growth potential and ease of management. Microsoft realised that it would be very difficult to separate the back-office functions such as HR and so on.
Additionally, the individual also mentioned that the tech behemoth wants to ensure users have access to the app when they travel from one country to another.
The deal could be to tune of $50 billion as existing investors and TikTok management finds the exploded growth of TikTok in a very short span of time very compelling.
Following Microsoft’s announcement on Sunday, Trump on the very next day, in a statement regarding the same said that buying TikTok out entirely is way better than just getting 30% of it. He also mentioned whomsoever closes the deal should be paying a hefty amount to the US Treasury.
Here it needs mentioning that this deal wouldn’t be extending to China as TikTok operations are limited to outside of its origin country. Chinese citizens primarily use ‘Douyin’ which is often dubbed as the sister app of TikTok.
Currently, according to the sources who have revealed this particular information to Financial Times, Microsoft executives are busy trying to ease the worries of the Chinese government when it comes to getting stuck between the crosshairs of the tussle between Beijing and Washington.
Nonetheless, it is quite understandable that there are far too many moving parts in this deal which makes it quite a complex one.
Challenges For The Global Acquisition Of TikTok
One of the biggest obstacles which stand in the way of the deal materialising is obviously the valuation. When questioned about the same, one of the anonymous sources mentioned that the two parties are having to partake in a game of multi-dimensional chess and reaching a valuation both of them agree with is going to be a long battle. This is because there are multiple stakeholders starting from governments and minority shareholders in ByteDance, all of whom currently have their eyes on the deal.
Other than that, the second biggest obstacle that stands in the way of the acquisition is the huge challenge of ripping apart TikTok’s technology from ByteDance.
The sources have said that the Chinese-origin company, long before the talks of acquisition ever began, was working on separating the data and algorithms of Tiktok between China and the rest of the world. However, there is no information when it comes to how successful they have been in doing so.
According to the new information that has come to light, Microsoft has added an agreement wherein within one year they want to separate TikTok from its Chinese parent and address all the concerns of US government over the security of data. However, the sources in the know speculate it will easily take 5-7 years in doing so and thus consider that the timeframe will inevitably be extended.
Lifting Of The Indian TikTok Ban Post Acquisition?
if Microsoft acquires TikTok globally, it will kill all the concerns of authorities in various countries including India. The acquisition will help TikTok returning to its 200 million-strong Indian user base. India is TikTok’s biggest market which is seconded by the United States.
If the popular short-form video app is purchased by Microsoft then it can help them shed their Chinese origin which was one of the core reasons why it got banned in the first place. Although at the same time it would also diminish the chances of all the Indian-made TikTok clones to take off, it will probably be a good thing for all the creators who lost their following and influence on the app overnight.
One of the sources who has been following this acquisition from India has revealed that there, in fact, is a deal in the works with Microsoft. However, if that falls through, ByteDance can very well sell TikTok India to either any other foreign investor or Indian buyers.
Now, it remains to be seen how the plot further thickens and in whose favour does it end up playing out. We will keep you posted on all future developments. Until then, stay tuned.