Microsoft has confirmed that it is in talks to buy Chinese social media company TikTok.
Microsoft says it will try and conclude a deal for the purchase of TikTok with its parent company, Beijing-based ByteDance, within the next six weeks, aiming to conclude a deal by September 15. In a statement, Microsoft said it will conduct “a complete security review” of the company and pledged to keep all American users’ data within the U.S. and sever any connections to systems abroad.
TikTok says it has 100 million users in the U.S. Last week, a group of investors, including Sequoia Capital and General Atlantic, floated a $50 billion bid for TikTok. Microsoft is interested only in TikTok’s businesses in the U.S., Australia, Canada and New Zealand, and may invite other investors to take minority stakes. At the end of June, Microsoft had $136 billion in cash.
Taking over TikTok would give Microsoft control of one of the largest and most influential social networks. A Microsoft-TikTok tie up would also create meaningful competition for Facebook and Google, leveraging other Microsoft brands such as LinkedIn, Minecraft and Xbox. TikTok is a social networking platform that allows users to share videos.
However, Microsoft’s bid for TikTok comes amid rising political tensions between the U.S. and China. Last week, U.S. President Donald Trump said the hugely popular social network represents a national security risk because of its Chinese ownership. “As far as TikTok is concerned, we’re banning them from the United States,” said Trump. The president has since walked back that statement.
The time pressure, and alternative of a potential shut down, may give Microsoft the upper hand in negotiations with parent company ByteDance, say analysts.
