Microsoft to ‘continue discussions’ regarding TikTok purchase

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Microsoft is reportedly in talks to acquire TikTok.
Image: Unsplash | Solen Feyissa

One of the world’s fastest-growing social media platforms, TikTok, has hit some rough times over the past few days. On Friday, President Donald Trump threatened to ban the short-form video app due to privacy concerns and the potential involvement of the Chinese government. TikTok’s parent company, ByteDance, is located in China.

However, in a somewhat surprising move, Microsoft stepped in and seemingly came to the rescue. The Big Tech giant is reportedly “in discussions” with ByteDance to acquire TikTok—or at least part of its operations.

Now, Microsoft has announced that it will be “continuing discussions” following a meeting between its CEO, Satya Nadella, and President Trump.

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In Talks

Almost immediately after President Trump’s comments on Friday, ByteDance agreed to completely detach itself from TikTok’s U.S. operations.

That divestment appears to be coming in the form of a buyout from Microsoft. The two companies entered talks rapidly, but now appear to be pumping the brakes.

Microsoft said in a statement that it “will move quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020. During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President.”

The company also said, “It [Microsoft] is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States.”

The deal would supposedly give Microsoft ownership of TikTok in the United States, Canada, Australia, and New Zealand. A major part of the deal would bring improvements to the service’s security.

Microsoft said, “This new structure would build on the experience TikTok users currently love while adding world-class security, privacy, and digital safety protections.”

“Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred,” it added.

Odd Deal

It’s easy to see why Microsoft has an interest in acquiring TikTok. The social media app has seen its user numbers skyrocket in just a few months. According to a June report from Business of Apps, TikTok has more than 800 million monthly active users. Meanwhile, its app has been downloaded over 1.5 billion times.

Although 57 percent of TikTok’s user base is located in China, the U.S. had 46 million downloads in 2019 alone. Making the app even more attractive is the fact that an estimated mere nine percent of U.S. internet users have downloaded TikTok. Despite its snowballing growth over the past few years, there is still plenty of room for improvement (and profit).

That being said, TikTok also brings some concerns with it. The app has been banned in India as well as by U.S. government branches like the armed forces due to national security concerns. Many in Washington fear that the app could be used to collect data on American citizens that could ultimately end up in the hands of the Chinese government.

That being said, ByteDance has made an effort to be more transparent. It claims to store information about U.S. users on American-based servers and has repeatedly said that it would refuse to turn data over to Beijing.

Moving forward, it will be incredibly interesting to see how the deal with Microsoft plays out. If it gains control of TikTok, Microsoft could very well stumble into being one of the most powerful players in the social media industry.

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