Popular video-sharing application is on its way to changing ownership barely days after US President Donald Trump threatened to ban the app in the country. The Chinese-owned social networking service is set to be acquired by Microsoft as soon as mid-September, this year following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump.
In a statement issued by Microsoft, the company declared the need to address President Trump’s security concerns with the now popular app whose users now stand at an estimated 800 million. On its side, Microsoft further continues to state that they are keen on acquiring TikTok after a thorough security review as well after issuing complete economic benefits as a way of justifying the purchase to the US National Treasury.
The acquisition being pursued by Microsoft and TikTok’s parent company ByteDance is being expedited so as to be completed in a matter of weeks. It is during this period that Microsoft hopes to have a successful dialogue with the United States Government, including with the President.
The two companies’ discussions are being built upon a notification made by Microsoft and ByteDance to the Committee on Foreign Investment in the United States (CFIUS). They have provided notice of their intent to explore a preliminary proposal that would involve the purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would hence result in Microsoft owning and operating TikTok in these markets. However, Microsoft may invite other American investors to participate on a minority basis in this purchase.
In the same official statement, Microsoft has noted that they appreciate the U.S. Government’s and President Trump’s personal involvement as they continue to develop strong security protections for the country. The company has however declared that they do not intend to provide further updates until there is a definitive outcome to our discussions.
But why does Microsoft want to purchase TikTok?
TikTok by the basic virtue of it being so popular gives Microsoft a direct line to millions of youngsters using the app to watch videos and even those who use it to create content. This comes at a time when Microsoft has been trying desperately to adopt its Windows operating system to be more consumer-friendly with video creation apps, and TikTok will now offer the easy way for millions to create videos from their phones instead.
Another driving factor is the data Microsoft stands to gain. And this is where the contention with President Trump lies. With his not-so-smooth relations with China, Trump argues that the data might be misused, eventually threatening US national security. Microsoft has since responded saying that all private data of TikTok’s American users is transferred to and remains in the US.
Another reason why Microsoft wants TikTok, according to New York Times is how TikTok could also influence how other software and services are developed inside the company. Microsoft has all the data it needs on business usage of software, but it hasn’t been successful with pure consumer services in recent years, which has left the company with a gap of insight into consumer behaviours.
This has resulted in Android, iOS, as well as Google, being major competitors of Microsoft- a factor that makes industry observers argue that America’s future generation might grow up not needing any of Microsoft’s software or services but this might just change with its new investment move of acquiring TikTok.