Microsoft is currently in discussions with TikTok's parent company, ByteDance, about acquiring the popular video sharing service, and intends to make a decision one way or the other no later than September 15, the company announced on Sunday (opens in new tab). The decision hinges in part on how related talks go with White House officials, including US President Donald Trump.
Confirmation of Microsoft's interest in TikTok comes after Trump threatened to ban the service in the US. TikTok is one of several Chinese apps that face a potential ban in the near future, with Trump's chief of staff Mark Meadows recently telling reporters there are "a number of administration officials who are looking at the national security risk as it relates to TikTok and other apps."
The murky situation with TikTok is the latest in ongoing tensions between the US and China in the tech sector. Huawei, for example, once had aspirations of selling its smartphones and other devices in US stores like Best Buy, but essentially gave up after vendors balked amid government pressure.
In this case, TikTok responded to the potential ban by saying it employs 1,500 people in the US, and plans to add another 10,000 jobs over the next three years.
"I’m thrilled about our US creator fund, where we just announced our $1 billion fund to support our creators, and when it comes to safety and security, we’re building our safest app because we know it’s the right thing to do. So we appreciate the support, we’re here for the long run and continue to share your voice here, and let’s stand for TikTok," US general manager Vanessa Pappas said in a statement.
TikTok's best bet, however, could be to secure a deal with Microsoft, if the two sides can come to terms. Microsoft CEO Satya Nadella has already talked with Trump, and it sounds like a deal is close to happening. Microsoft's proposed purchase would cover the app's operations in the US, Canada, Australia, and New Zealand.
"Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury," Microsoft said.
One of the contingencies of a possible deal is that the private data of TikTok's American users would be transferred to and remain in the US. Somehow or another, Microsoft feels it can ensure that such data would be "deleted from servers outside the country after it is transferred."
It would be interesting to see what exactly Microsoft would do with TikTok. Microsoft has a spotty record with acquisitions, and a blind spot for social media, given its size. LinkedIn has worked out so far, but despite years of lead time, Skype lost out as the de facto video chat client. And Microsoft's abrupt shuttering of Mixer took the streaming community by surprise, especially since it had recently recruited some top streamers with mega deals, including Ninja and Shroud. Maybe TikTok will be the one to prove Microsoft is hip to the kids.