Microsoft is after another one of their takeovers having set their eyes on Tiktok. The tech giant said on Sunday it was in negotiations with ByteDance, the Chinese owner of TikTok, to explore “a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand”. Let us take a look at the details of the deal.
Microsoft is in talks with Tiktok regarding a takeover for nearly a week now. The news came as a shock to many as President Trump had imposed a ban on the Chinese app. However, Microsoft had other ideas. Hence, Microsoft must close the deal before the ban is implemented in mid-September. On Monday, Trump said it was “probably easier to buy the whole thing than to buy 30 percent of it”. He also said that whoever bought TikTok would have to pay a “substantial” fee to the US Treasury. Hence, Microsoft will go for a full-blown global takeover, not limiting itself to operations in the US.
Microsoft is chasing a deal to buy all of TikTok’s global business, including the viral video app’s operations in India and Europe. The talks were initially regarding a US takeover, but the tech giants have decided to go all in. However, several challenges regarding the deal have to be overcome.
Firstly, the negotiations must not interfere with the political tensions between Beijing and Washington. With the two countries at crossfires politically, Microsoft has to be very careful about interfering. This makes the deal even more complex, with approvals of both governments required before finalization.
Secondly, there is still the challenge of untangling TikTok’s technology from ByteDance. ByteDance had previously been working on separating the data and algorithms between China and the rest of the world before the talks began. Microsoft has discussed adding an agreement whereby it would have one year to separate TikTok from its Chinese parent. Moreover, it would address US government concerns over the security of the data generated by the app.
However, we do not know for sure if Microsoft will go for a full global takeover or just the countries it mentioned on Sunday. Let us know your thoughts in the comments below!