Microsoft’s Satya Nadella spoke with Donald Trump to discuss the purchase of TikTok in the United States.
In a bid to salvage a deal for TikTok’s U.S. operations, Microsoft Corp. CEO Satya Nadella spoke by phone with President Donald Trump about how to get the administration’s blessing to purchase the app. hugely popular, but besieged music video.
Microsoft, in a blog post on Sunday, confirmed negotiations to buy TikTok’s operations in the United States, as well as Canada, Australia and New Zealand, and said it intends to close the deal at most. late September 15th.
The software giant’s public statement follows closed-door discussions with TikTok and Trump, who launched plans for a total ban on the app on national security grounds and publicly lambasted the idea of a deal Friday night. Businesses now have 45 days to come up with a plan acceptable to all parties, a deadline the White House has insisted on, according to people familiar with the matter. The two companies have yet to define key details of a deal, including the price, according to people familiar with the matter.
Microsoft, in a blog post on Sunday, confirmed negotiations to buy TikTok’s operations in the United States.
TikTok had become a hotspot amid rising tensions between the United States and China in recent months, as US politicians feared parent company Bytedance Ltd. be forced to transmit US user data to Beijing or use the app to influence the 165 million Americans, and over 2 billion users worldwide, who downloaded it. The app also angered the US president after anti-Trump activists used the platform to disrupt campaign activities.
In its blog post, Microsoft pledged to add more security, privacy and digital security protections to the TikTok app and to ensure that all Americans’ private data is transferred to the United States and deleted from servers. outside the country. The company also said it may invite other U.S. investors to take minority stakes in the company.
“Microsoft fully appreciates the importance of addressing the president’s concerns,” the company said. “It is committed to acquiring TikTok subject to a full security review and to providing appropriate economic benefits to the United States, including the United States Treasury.”
If a deal is made, it would mark a dramatic intervention by the US government in private enterprise and change the global tech landscape. It would give Microsoft a prominent role in mainstream social media and online advertising – and threaten to end an era of globalization in the tech industry.
Microsoft’s statement did not explicitly say whether Trump would approve a deal and waive a ban on TikTok, although Microsoft said it was in talks with Trump and likely would only make such a public statement if it believed that that would happen.
A TikTok spokeswoman declined to comment, while the White House did not immediately respond to a request for comment. Bytedance is committed to becoming a global business and strictly abides by local laws, the owner of TikTok said in an online statement on Sunday.
Microsoft’s blog post came after a weekend of tense, late-night negotiations between Microsoft, TikTok and the White House, as well as a series of Sunday morning TV appearances by politicians. Americans trying to influence the president’s decision.
Factions within the administration and Congress have split into two camps: those who want to keep the hugely popular music video app going by handing it over to an American company, and those who want to ban it completely. the application in the United States due to TikTok’s Chinese roots. The latter would send a message to China that the United States can also prevent internet companies from operating on its shores, as China is doing with Facebook, Twitter and Google.
TikTok was launched in the US over two years ago, following Bytedance’s 2017 purchase of the lip-syncing app Musical.ly, which it integrated with TikTok. The app has become a social media hit in the United States – the first Chinese platform to make such inroads.
As TikTok grew in popularity, officials began calling for a national security investigation into the app. In November 2019, the Committee on Foreign Investment in the United States, or CFIUS, which investigates overseas acquisitions of US companies, opened a review of the purchase of Musical.ly.
TikTok has repeatedly rejected accusations that it is providing user data to China or being beholden to Beijing, even though ByteDance is based there. He spent months trying to distance himself from his Chinese roots. It hired its first U.S. CEO in June, former Walt Disney executive Kevin Mayer, along with dozens of DC lobbyists. He announced plans for a new world headquarters outside of China and said he was considering other organizational changes to satisfy US officials.
After the coronavirus pandemic strained relations between the United States and China further, anti-TikTok rhetoric escalated. In June, Secretary of State Mike Pompeo and Trump both launched a possible ban on the app, suggesting there may be real action behind the Chinese hawks’ words.
In response, ByteDance’s venture capitalists, including Sequoia Capital, have urged company founder and CEO Zhang Yiming to prevent any U.S. government action by selling them a controlling stake in TikTok, told Bloomberg News in July. people familiar with the matter. At first, Zhang was reluctant to relinquish control, but Bytedance feared an outright ban in the United States and the loss of a multi-billion business, according to people familiar with the deliberations. India instituted a ban on TikTok, which quickly devastated its business there.
Zhang relented and agreed to sell a controlling stake to US investors, but that arrangement turned out not to be enough. Administration officials did not want to leave the company’s Chinese founder with even a minority stake or for ByteDance’s long-time venture capital allies to have a controlling stake in the company, the people said.
Meanwhile, Microsoft and TikTok have started preliminary talks on the deal. Discussions that began in July involved Nadella, Microsoft chief financial officer Amy Hood and president and general counsel Brad Smith, the people said. Erich Andersen, general counsel for TikTok – who spent 25 years at Microsoft, including working for Smith before joining TikTok this year – also participated in the conversations.
At this point, ByteDance was facing increasingly serious threats in the US The company’s proposals to allay US regulators’ concerns about TikTok were insufficient and the company was running out of time and options. , said one of the people.
Over the weekend, Sec. Pompeo said the Trump administration would soon announce measures against “a wide range” of Chinese-owned software deemed to pose national security risks, suggesting the actions could go beyond just Chinese enforcement. In a Friday night missive, Trump told reporters, “Regarding TikTok, we are banning them in the United States.”
TikTok has hired nearly 1,000 people in the United States this year and will employ another 10,000 people in “high-paying jobs” in the United States, a spokesperson for the company said in a statement. The company’s $ 1 billion creation fund also supports locals building livelihoods from the platform, she added.
“TikTok user data in the United States is stored in the United States, with strict controls over employee access,” she said. “TikTok’s biggest investors are from the United States. We are committed to protecting the privacy and security of our users.”
The purchase of TikTok’s operations in the United States and the other three countries, if concluded, would represent a huge coup for Microsoft. The world‘s largest software company would win a social media app that convinced young people with a steady diet of dance videos, lip-syncing clips, and viral memes. The company entered the lucrative business, but did not develop its own popular service. Microsoft acquired LinkedIn, a job search and business networking company, for $ 26.2 billion in 2016.
A deal would allow Microsoft to access the social media and advertising markets dominated by Facebook Inc. and Google. Microsoft has already paid $ 6.3 billion for Internet advertising company aQuantive, the company’s largest transaction at the time. The effort failed, and the company ended up noting nearly all of the deal’s value and then selling its remaining display ad business to AOL in 2015.
Microsoft has search ad activity, but it was down 18% in the last quarter. With no mainstream social media app out there, Xbox and Minecraft are pretty much the only ones catching the attention of younger users. TikTok would help boost that activity, though it would also push Microsoft to tackle controversial areas it mostly avoided, such as censorship and disinformation.
Buying TikTok would give Microsoft a “crown jewel” in mainstream social media at a time when Facebook and Google are under massive regulatory scrutiny for antitrust reasons, Wedbush analyst Daniel Ives said in a research note.
Microsoft, which briefly employed Zhang, is an American company but it also has deep roots in China. Bing and Linkedin, both of which censor content in China, remain the only major search engine and social networking platform allowed to operate in China by US companies.
Microsoft and TikTok now have 45 days to determine the price, terms, method of payment for the unit by Microsoft or the operation of any technology sharing or asset transfer from the video sharing app. Deal negotiations can be complicated on the one hand by ByteDance investors keen to get a big payout for the popular app, and on the other hand by Microsoft seeing itself as a white knight saving a struggling company. The Trump administration could also throw a wrench into the process at any time.
A wave of support for TikTok and anger against President Trump has spread across the internet in recent days, as users were outraged at a possible US ban on what has become one of the most popular media companies in America. Videos with the #ban hashtag had more than 620 million views on Sunday night on TikTok.
“This is what Trump gets to plan for the Tiktok ban,” wrote a TikTok user named @rainbownursesarah, watching a video of a sparsely packed stadium at a campaign rally in Tulsa, Oklahoma Trump that the TikTok users sought to disrupt in June.
Supporters of free speech have also spoken out against the idea of banning any type of Internet service, regardless of who owns it.
“Banning an app that millions of Americans use to communicate with each other is a threat to free speech,” said Jennifer Granick, surveillance and cybersecurity advisor at the American Civil Liberties Union. “Shutting down a platform, even if it were legally possible to do so, undermines freedom of expression online and does nothing to address the broader problem of unwarranted government surveillance.”
(Updates with details of Trump’s involvement from fourth paragraph.)
– With the help of Linus Chua, Kurt Wagner and Mario Parker.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
