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What is Going on With TikTok?

3 MINUTE READ | August 4, 2020

What is Going on With TikTok?

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Abby Long

Abby is PMG’s senior managing editor, where she leads the company’s editorial program and manages the PMG Blog and Insights Hub. As a writer, editor, and marketing communications strategist with nearly a decade of experience, Abby's work in showcasing PMG’s unique expertise through POVs, research reports, and thought leadership regularly informs business strategy and media investments for some of the most iconic brands in the world. Named among the AAF Dallas 32 Under 32, her expertise in advertising, media strategy, and consumer trends has been featured in Ad Age, Business Insider, and Digiday.

What a fascinating (and tiring) few days it has been. Shortly after the Big Tech antitrust hearings and subsequent earnings reports, news broke that Microsoft was considering an acquisition of the US operations of ByteDance’s TikTok. If the idea of Microsoft’s foray into social consumer technology wasn’t surprising enough, later in the day aboard Air Force One, President Trump floated banning TikTok in the US as soon as Saturday (the following day) via either executive order or emergency economic powers. 

President Trump also reportedly spoke against the idea of Microsoft acquiring the app. It’s uncertain whether the comments to the press pool were made to force ByteDance’s hand, or if President Trump was actually hours away from banning the fastest-growing app in America. Regardless, a frenzy of activity later ensued, consuming most of the weekend’s news cycle. 

TikTok creators posted farewell messages, encouraging followers to join them on other social platforms, users spoke out in protest, and advertisers and journalists worked overtime to understand precisely what was happening. To ease advertisers, creators, and users alike, TikTok released a video announcement over the weekend sharing, “we’re not going anywhere.” 

Following a phone call on Sunday between Microsoft’s CEO, Satya Nadella, and President Trump, the company released a blog post that outlined Microsoft would move quickly to conclude discussions with TikTok’s parent ByteDance in Beijing, aiming to complete negotiations by September 15th. President Trump reportedly “has a deal on his desk” in which Microsoft would lead the acquisition of 100 percent of the US operations of TikTok, severing ties with its Beijing parent company. 

According to The Wall Street Journal, Microsoft and TikTok had been in covert discussions about an acquisition for weeks now, only confirming the dealmaking publicly after President Trump’s 11th-hour intervention. In the blog post, Microsoft said the deal talks also include the acquisition of TikTok’s service in Canada, Australia, and New Zealand. Microsoft said it might also invite other American investors to participate “on a minority basis.” 

The deal would give Microsoft a fast-track into the social media space, putting it in direct competition with Facebook’s family of apps, Google’s YouTube, and Snapchat for user engagement. By separating TikTok’s US business from China, fears over the safety of American’s user data will likely be alleviated. If a deal is reached between Microsoft and TikTok, it would be subject to approval through the Committee on Foreign Investment in the United States. 

Related: Secretary of State Mike Pompeo says the US will soon take action against all Chinese tech and software companies that pose national security risks

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For now, it seems the dust has settled, but in the meantime, we’ll spend our time contemplating how this transaction could reshape the global tech landscape and further strain US-China relations.

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