Microsoft Might Be Buying TikTok Soon: What We Know

By: First Union | Date:

marketing

Microsoft Might Be Buying TikTok Soon: What We Know

A source close to Microsoft has revealed that the tech giant is indeed talking to Chinese owned TikTok regarding potentially buying the company. TikTok has grown in popularity by leaps and bounds, especially throughout the past few months. The company is currently owned by China-based ByteDance. According to the unnamed source, the talks have been going on for some time now.

So what would such an acquisition mean for Microsoft…For one, it could help them to once again hone in on consumer technology. Recently, the business software titan has shifted focus away from this niche; they've moved away from ebooks, smartphone hardware as well as fitness hardware, primarily zeroing in on business solutions. Buying TikTok could help them make a great leap forward concerning the more consumer-driven marketplace.

There have been a couple of acquisitions within the past few years that have helped the company keep its foothold in the consumer sector. In 2016, they bought LinkedIn for 27 billion. And in 2014, they paid 2.5 million for the game developer Mojang. The most popular title from Mojang is Minecraft—those who make up the core audience here: younger consumers, incidentally, also the primary audience utilizing the TikTok platform.

TikTok was launched in 2017 by Chinese owner ByteDance. In April alone—largely due to the pandemic—the app had over 2 billion downloads. While it does compete with the likes of Facebook and Snapchat to some degree, by and large TikTok has managed to carve out its unique niche, especially, as noted, among young users. ByteDance investors, in light of the sharp increase in popularity, value the company at 50 billion.

That said, such an acquisition would not be without its bumps in the road. Trump's administration is skeptical of the app and has even suggested a potential ban. The Treasury Secretary has noted that it is being reviewed by the Committee on Foreign Investment in the US. The Secretary also mentioned a ban on the platform; he did say that they are looking into a variety of options as far as TikTok is concerned. Trump echoed these sentiments at the White House this past Friday.

Microsoft hasn't yet officially commented on the talks. The only reply when asked was to say that they are not commenting on any rumors but did confirm that they believe in the ultimate success of TikTok.

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