Microsoft gets Trump green-light to buy TikTok

Green traffic light
Microsoft said it would move rapidly to purchase TikTok’s operations in the U.S. as well as Australia, Canada and New Zealand. (Pixabay)

A wild weekend for TikTok now looks likely to leave its U.S. presence in the arms of Microsoft.

ByteDance’s immensely popular social video app—the top free title in Google’s Play Store—went from facing a threatened ban in the United States Friday night to looking Sunday night at the prospect of a government-choreographed sale of much of its assets to Microsoft.

In a corporate blog post Sunday, Microsoft said it would move rapidly toward purchasing TikTok’s operations in the U.S. as well as Australia, Canada and New Zealand.

“Microsoft 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,” the post said.

Microsoft won a green light for this deal after a conversation between CEO Satya Nadella and President Donald Trump.

Less than 48 hours earlier, Trump had vowed to ban TikTok, which has drawn widespread attacks over the possibility that its Beijing-based corporate parent could use the app for surreptitious data collection on Americans.

“As far as TikTok is concerned, we’re banning them from the United States,” Trump said to reporters on Air Force One late Friday night. “It’s going to be signed tomorrow.”

No such executive order materialized Saturday or Sunday. Trump’s authority and ability to ban an app is also questionable, although he could certainly make business in the U.S. painful for ByteDance.

Evidence of TikTok surveillance remains scarce. French security researcher Baptiste Robert posted an analysis of the app’s outbound communication Monday that found it was “not exfiltrating unusual data.”

Reuters reported Sunday that Trump backed down after enough Republicans warned him that banning TikTok would backfire politically.

Microsoft’s post said it would improve TikTok with “world-class security, privacy and digital safety protections.”

Microsoft isn’t a stranger to the entertainment business. It provides tools for entertainment services and is building a streaming service for the NBA. But running a social network would be a reach.

“Microsoft may not be the first company you’d think of to buy TikTok, and we’ve seen lots of tech companies start or acquire social networks and fail, Microsoft included,” said  Avi Greengart, founder and lead analyst at Techsponential.

Elma Beganovich, founder and COO at the New York-based influencer marketing agency Amra & Elma, noted one concern in an emailed statement: “As Microsoft is not known for producing trendy products, the concern would be the flight of the younger and ‘cooler’ crowds from Gen Z to Instagram, i.e., Facebook.”

Facebook’s photo-sharing app is about to launch Reels, a TikTok-esque feature that will let Instagram users create short, looping videos.

Greengart voiced cautious optimism for Microsoft’s potential stewardship of TikTok. "Microsoft’s track record running Minecraft and LinkedIn and GitHub is good,” he said. “It has a major consumer brand in Xbox that would dovetail nicely with TikTok. It could be trusted with the consumer data that TikTok generates, and it needs that type of data for its AI and Search business.”

Suggested Articles

Alan Wolk, co-founder and lead analyst at TV[R]EV, breaks down the new Peacock-Roku agreement and Quibi's potential sale.

Best Buy has formed a strategic partnership with streaming service provider Philo, a first of its kind in the electronic retailer’s history.

Roku finally landed Peacock and now the company has positioned itself for some potential long-term gains.