Happy August 1st, tech knows no rest. In just a span of a day, there has been two big headlines regarding controversial Chinese social media app, Bytedance owned TikTok.
First off, apparently Microsoft is interested.
The approach to buy TikTok was at an early stage, and it was unclear whether Microsoft would succeed in taking it over, as the negotiation would face several hurdles.
Takeover interest comes amid rising scrutiny of TikTok and ByteDance’s data-sharing practices, and it has been accused of sharing data with the Chinese government.
“The fears about TikTok are more likely to be answered if the company is fully acquired by a non-China-based entity than if ByteDance retains any ownership,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business to the Financial Times.
If valid, it is interesting to think about why Microsoft would want its hands on the social media app. Firstly, Microsoft has primarily been reigning in the “office” ecosystem space, which means that it has some interest in furthering its reach with younger audience in different verticals.
Microsoft has the gaming console Xbox, and it could leverage TikTok to further engage with this demographic. Engagement TikTok has eaten into time away from games, which could make this platform an interesting extension for Microsoft to explore.
It’s not just Microsoft too. Word on the VC street has it that US investors led by General Atlantic and Sequoia Capital had also been discussing a buyout of TikTok in which ByteDance would retain a minority stake. Neither has commented on this rumor.
President Trump vs. TikTok
It’s been some time coming, but President Trump has just said that he might “sign an executive order to ban TikTok” as early as this weekend.
First off, are Presidents allowed to do that? Secondly, is this just another off color remark by the President? It’s unclear what legal processes the administration has to undergo to push it through, if they can even do so.
All we can say is, tensions are heightened between the US government and the Chinese, and entities like TikTok are definitely caught in the crossfire.
