Microsoft said it is still in talks regarding the potential purchase of the Video app giant, TikTok. They are forging ahead to buy the TikTok’s US operations, which is owned by Chinese startup ByteDance. The Microsoft TikTok deal is against the backdrop of President Donald Trump’s statement about banning the operations of popular short-form video app in the United States.
In a blog post on Sunday, Microsoft said its CEO Satya Nadella has spoken with Trump about buying the app, which is owned by Chinese start-up ByteDance. US policymakers have for weeks expressed concerns about the app as tensions between the United States and China escalate, with many asserting that it could pose a national security risk.
Microsoft said in a statement on Sunday that it was “committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury”.
It added that “it fully appreciates the importance of addressing Mr. Trump’s concerns”. The president said on Friday that he intended to ban the app on national security grounds and that a purchase by any US company, including Microsoft, would not be allowed.
According to a blog post in Washington, the Microsoft TikTok deal could avert the ban that Trump threatened on Friday night. Donald Trump said, he could use emergency economic powers or an executive order to block the app from operating in the United States.
However, as part of the agreement, Microsoft said it would ensure that all private data of TikTok’s American users would be transferred to and remain in the United States.
What’s Will Happen To TikTok In Other Countries
According to the US technology group, this potential transaction would include TikTok’s business in Canada and its Australia and New Zealand operations.
According to the statement, it is clear that a deal would create a new structure wherein Microsoft would own and operate TikTok services in the United States, Canada, Australia, and New Zealand.
However, it is not clear how exactly TikTok would separate its US arm from its other European and Asian operations, or why Canada, Australia, and New Zealand were part of the proposed deal.
TikTok’s Market Valuation
TikTok’s value could be hurt considerably if it were to be shut down by the US Government. However, the short-video app giant is valued at $50b, according to Wedbush Securities analyst Daniel Ives.
Ives added that if the sale is successful, Microsoft would also receive a social media “crown jewel” at a time when tech peers like Facebook and Google parent Alphabet are facing regulatory scrutiny, making it difficult for them to consider Tiktok.
However, Microsoft-TikTok tie-up would allow the US tech company, with a limited presence in social media, to enter a new market dominated by rivals such as Facebook, Google’s YouTube, and Twitter.
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