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Tech

Why Does Microsoft Want To Buy TikTok? The Answer Is You, The Consumer, And The Data You Create

Microsoft wants to buy TikTok. Donald Trump is not happy about it. Donald Trump is okay with it. Donald Trump has given his blessings. Donald Trump has set a deadline for the deal. Well, depending on which side of the bed you wake up and what day it is, the intersection of politics and technology is undoubtedly creating more confusion that it does good. At the time of writing this, it seems the political dispensation in the US is okay with Microsoft going ahead with the attempt to follow through on its interest in acquiring TikTok. At least the operations for certain parts of the world, including the US. Works out well for the tech giant, because TikTok is trying everything possible to remain present and active, in the US in particular, where it has a large and active user base. But the question still remains, why does Microsoft want to buy TikTok?

The way things have been over the past few years, Microsoft has focused on the enterprise space. The part consumer plays, that have included the Surface computing device line-up and the revamped Microsoft 365 subscriptions, in the end, do plug into the enterprise space very nicely. But Microsoft, for most intents and purposes, doesn’t really do consumer products. Except perhaps the Microsoft Xbox ecosystem. Let us look at some of Microsoft’s consumer products that no longer are around. Windows Phone, Groove Music, the Microsoft Band fitness accessory are some examples. Cortana, the virtual assistant, seems to be going down that path—the app for Android and iOS will be shut down next year, along with Cortana access for Harman Kardon Invoke smart speakers and the first-generation Microsoft Surface headphones. Cortana instead is getting deeper integration within the Outlook email app and Teams video meeting app, which have great enterprise significance. Gives you a sense of the demographic of users Microsoft is largely designing products and services for.

At this time, it is believed Microsoft wants to acquire TikTok’s operations for US, Canada, Australia, and New Zealand. “This is a unique deal of a decade opportunity with a price tag that could easily be consummated,” wrote Dan Ives, analyst at Wedbush, to the investors earlier this week, as reported by CNN. It is believed TikTok’s value stands at $50 billion.

One of the primary reasons why Microsoft believes TikTok is an investment worth doing is it will get a readymade product in the social media space. The closest Microsoft right now is to that space is with LinkedIn, a professional network. Yet, it is no match for the might of Facebook, the Facebook owned Instagram and even Twitter and Snapchat. Maybe that LinkedIn acquisition holds a clue—Microsoft didn’t change the branding or the foundations of the network that made it successful in the space it operates. If the company does the same with TikTok, as in leave the branding and the app as is, it could simply be successful because of the numbers that drive TikTok engagement on a daily basis. The only change would be that the user data for US based accounts will be saved on servers in the US. As a consumer, that would make no difference, except you may perhaps have to again accept the new terms and conditions at some point when you open the app post the expected Microsoft acquisition.

Second, it is the oil of the modern world. Data. It all started with data, and the fears that data of US users was ending up with the Chinese government. After all, TikTok is owned by Chinese company ByteDance. In China, the National Intelligence Law of 2017 governs all tech companies that are based in China or are under Chinese ownership. The law mandates all businesses to share any and all information that the Chinese Government may ask for. This is something that is worrying governments around the world, including India.

Microsoft acknowledges the importance of the data that it’ll get from TikTok. “Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred,” says the company in an official statement confirming the talks.

As of January, TikTok had clocked 800 million users worldwide. The app saw more than 49 million downloads in the US just last year. On an average, TikTok users in the US open the app 8 times a day, with each session around 5 minutes—that works out to around 40 minutes of app usage in a day. This is the sort of ready-made platforms that don’t become available so easily for tech companies to acquire. Microsoft will finally have a product to take Facebook on with.

If you notice the list of countries that Microsoft wants to acquire TikTok in, these are all English-speaking. That would mean limited challenges when it comes to moderating content as well, without having to deal with complexities of localization.

TikTok is as consumer centric as it gets. In fact, this gives Microsoft a head-start in trying to understand a younger demographic of users, who will consume more services and apps in the years to come. While Microsoft fell behind with the previous generation with its much delayed attempts at battling with Google, Apple and Facebook in the past when it came to platforms such as Windows Phone, Outlook Mail, Bing Search and social networks in general, it’ll have an advantage over the rival big tech companies when it comes to understanding these users that it’ll adopt with TikTok.

Microsoft is also in a safe spot as far as regulators are concerned. While Facebook, Google, Apple and Amazon are all very much under scrutiny by the US Congress, Microsoft hasn’t been dragged into it just yet because of its business and enterprise focus.

Remember, TikTok is the one social media platform that has had Facebook worried for a while now. The popularity, the quick video format and the product itself has been some concern for Facebook, which is trying the same with Instagram Reels. With Microsoft’s might behind it, TikTok can logically stand to gain. The key for Microsoft will be to leave TikTok as is, and not make it a Microsoft product.


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Tech

ByteDance founder defends TikTok's U.S. strategy in staff letter

BEIJING ByteDance founder Zhang Yiming told employees on Tuesday there were misunderstandings on Chinese social media about TikTok’s situation in the United States and that the company could face more difficulties as anti-Chinese sentiment rose abroad.

His comments in a letter to ByteDance’s Chinese employees came after the company and Zhang were heavily criticised on Chinese social media for entering into talks with Microsoft Corp to sell TikTok’s U.S. operations.

Chinese media first reported the contents of the internal letter. A source confirmed the content of the memo to Reuters.

ByteDance did not immediately respond to a request for comment.

“I actually understand (the criticism),” Zhang said in the letter. “People have high expectations of a company founded by a Chinese person which is going global but have little information about it. With lots of grievances towards the U.S. government, they tend to lash out at us with harsh criticism.”

Since Monday, some users of China’s Twitter-like Weibo have said they would uninstall ByteDance’s Chinese short video app Douyin and news aggregator Jinri Toutiao because they believed ByteDance had given in too quickly to Washington.

Others urged ByteDance to learn from U.S. giant Google, which opted to pull its search engine out of the Chinese market in 2010 after China asked it to censor its search results, rather than selling off its Chinese operations.

Zhang said some people had misunderstood the U.S. situation. He said Washington’s goal was not to force a sale of TikTok’s U.S. operations through the Committee of Foreign Investment in the U.S. (CFIUS) but to ban the app, and there was a legal process ByteDance had no choice but to follow.

Zhang told staff on Monday in another internal letter that the company had started talks with a tech company so it could continue to offer the TikTok app in the United States.

U.S. President Donald Trump initially dismissed the idea of selling TikTok’s U.S. operations to Microsoft but changed his mind following pressure from some advisers and many in the Republican party, because banning TikTok could alienate many young voters, Reuters has reported.

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Zhang also told employees that over the last two years, anti-Chinese sentiment had risen in many countries and the company must brace for more difficulties in the current atmosphere.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


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Tech

ByteDance says goal of U.S. was to ban TikTok app rather than force a sale – internal letter

ByteDance says goal of U.S. was to ban TikTok app rather than force a sale - internal letter

ByteDance founder Zhang Yiming told employees in an internal letter on Tuesday that the United States goal was not to force a sale of TikTok U.S. operations but rather to ban the app, and that some people had misconceptions about the situation.

  • Reuters
  • Last Updated: August 4, 2020, 2:51 PM IST

BEIJING ByteDance founder Zhang Yiming told employees in an internal letter on Tuesday that the United States goal was not to force a sale of TikTok U.S. operations but rather to ban the app, and that some people had misconceptions about the situation.

The letter, which was reported by Chinese media and confirmed by a source to Reuters, was sent only to ByteDance’s Chinese employees after news that ByteDance was in talks to sell parts of TikTok to Microsoft Corp prompted online criticism of the firm and Zhang.

ByteDance did not immediately respond to a request for comment.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor



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ByteDance says goal of U.S. was to ban TikTok app rather than force a sale -internal letter

ByteDance says goal of U.S. was to ban TikTok app rather than force a sale -internal letter

ByteDance founder Zhang Yiming told employees in an internal letter on Tuesday that the United States goal was not to force a sale of TikTok U.S. operations but rather to ban the app, and that some people had misconceptions about the situation.

  • Reuters
  • Last Updated: August 4, 2020, 2:50 PM IST

BEIJING ByteDance founder Zhang Yiming told employees in an internal letter on Tuesday that the United States goal was not to force a sale of TikTok U.S. operations but rather to ban the app, and that some people had misconceptions about the situation.

The letter, which was reported by Chinese media and confirmed by a source to Reuters, was sent only to ByteDance’s Chinese employees after news that ByteDance was in talks to sell parts of TikTok to Microsoft Corp prompted online criticism of the firm and Zhang.

ByteDance did not immediately respond to a request for comment.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor



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China Hits Back at USA Over 'Smash and Grab' TikTok Strategy, AI Lawsuit Against Apple

The logo of the much-controversial TikTok app is seen on a smartphone, against the backdrop of the national flag of the United States of America. (Image: Reuters)

The logo of the much-controversial TikTok app is seen on a smartphone, against the backdrop of the national flag of the United States of America. (Image: Reuters)

The unofficial cold war between the two economic powers is now seeing China hit back at USA, accusing the Trump administration of trying to abuse its power, and American companies sidelining Chinese technologies.

  • News18.com
  • Last Updated: August 4, 2020, 2:15 PM IST

Over the past week, reports emerged about Bytedance looking to sell its USA operations of viral social media app TikTok to an American company, with Microsoft emerging as frontrunners. The app, which rose to viral fame across the world, has faced considerable setbacks in recent times, with the service being banned in India following a government directive. While it is seemingly staring at a potential ban in USA as well, the Chinese government is taking an offensive approach to combat American strong-arming, as per a recent editorial published by Global Times, the English newspaper of China’s government-backed publication, People’s Daily.

‘Submission or mortal combat’

The international mouthpiece of the Chinese government has accused USA of “theft”, describing the TikTok deal as an act of “bullying”. It went on to state that China will have “plenty of ways to respond”, should it see the US government force its hand in what it has described as a “smash and grab” strategy to manipulate a Chinese company operating in America. The narrative also appears to have ruffled sentiments in China, with Bytedance founder-CEO Zhang Yiming facing public backlash for being “too accommodating and yielding” to America’s demands.

The TikTok-USA saga, and the recent Global Times editorial in particular, signifies what may become the start of the Chinese government hitting back at international pressures. The Chinese government has stated that USA is using its technological superiority and its relations with its allies to create an unfavourable and biased environment of business for Chinese companies. However, while it cries foul over the Trump administration’s tactics, word from China indicate a direct response to USA’s threats. A Reuters report said that the China government has accused USA of creating an atmosphere, where the only two options left were “submission or mortal combat in the tech realm”. It isn’t a threat, but a subliminal warning for sure.

A billion-dollar lawsuit

China’s recent trend of hitting back at USA further continued with Shanghai Zhizhen Intelligent Network Technology Company, commonly known as Xiao-i. The latter has filed yet another lawsuit against Apple, one of the biggest American (and global) companies, accusing it of stealing bits from its patents on voice recognition technologies and using them with Apple’s digital assistant, Siri.

The move coincides with China’s continued conflict with USA, where Huawei – arguably one of China’s biggest electronics companies – is already blacklisted, and Bytedance is close to selling off its operations to a US firm. Even though Apple’s statement expressing “disappointment” at a lawsuit filed by Xiao-i “again” suggests that it is fairly confident of defending itself in court, the $1.4 billion patent infringement claim suggests China is attempting to make inroads into US technology dominance, and prove that it is not going to take things quietly.

No longer dependent

Also important to note here is a recent report by market research firm Canalys, which suggested that for the first time ever, Huawei’s disclosed shipment numbers were higher than that of Samsung’s. According to the report, Samsung saw a 30 percent global shipment decline due to the Covid-19 pandemic to clock 53.7 million units shipped in the latest quarter. Huawei, meanwhile, exhibited only a 5 percent drop to clock 55.8 million units shipped in the same quarter. What’s important to note here is the distribution of nations for units shipped – while Samsung is a uniform, global player, over 70 percent of Huawei’s shipments come from China only.

While this means that Huawei will likely drop back in ranking once the pandemic normalises, it also goes on to show China’s might in the global technology industry – in turn hitting back at USA that even after being banned from conducting business with US companies, China is threatening to emerge as a potential global strength that can be large enough without bowing down to the dominant market players.

Even as US president Donald Trump makes a perplexing demand that the US government treasury should receive “a very substantial portion” of whatever price Microsoft pays to acquire TikTok’s USA business, China’s plans are different. It is on a trajectory to fight out the eyeballing episode, and state that it is no longer standing at a juncture where its businesses would fall if US or global coordination does not come through.


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Tech

Microsoft says in talks to buy TikTok's U.S. operations from China's ByteDance

BEIJING/SHANGHAI Microsoft Corp said it will push ahead with talks to acquire the U.S. operations of Chinese-owned short-video app TikTok, a potential blockbuster deal that could re-shape the social media industry and further inflame crumbling U.S.-China relations.

The U.S. tech giant formally declared its interest on Sunday after President Donald Trump reversed course on a planned ban of Tiktok and gave the two firms to 45 days to come to a deal.

The proposed acquisition of parts of TikTok, which boasts 100 million U.S. users, would offer Microsoft a rare opportunity to become a major competitor to social media giants such as Facebook Inc and Snap Inc.

Microsoft, which also owns professional social media network LinkedIn, is also seeking to buy TikTok’s Canadian, Australian and New Zealand interests.

ByteDance has not publicly confirmed the news. But in an internal letter to staff on Monday seen by Reuters, the company’s founder and CEO Zhang Yiming said the firm had started talks with a tech company that was not identified.

The letter also said ByteDance did not agree with the stance taken by the Committee on Foreign Investment in the United States (CFIUS) that it must fully divest TikTok’s U.S. operations.

“We disagree with this CFIUS conclusion,” the letter said but added: “…we understand the decision in the current macro environment.”

ByteDance did not immediately respond to requests for comment.

Trump had said on Friday he was planning a ban amid concerns that its Chinese ownership represents a national security risk because of the personal data it handles.

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He only agreed to allow Microsoft to negotiate a deal if it could secure a deal in 45 days, three people familiar with the matter said on Sunday.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


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ByteDance says preliminary talks with a tech firm over TikTok have started -staff letter

ByteDance says preliminary talks with a tech firm over TikTok have started -staff letter

TikTok owner ByteDance said on Monday that the company had initiated preliminary talks with a tech company to help it continue offering the short video app in the United States, a source said citing an internal company letter.

  • Reuters
  • Last Updated: August 3, 2020, 12:25 PM IST

BEIJING/SHANGHAI TikTok owner ByteDance said on Monday that the company had initiated preliminary talks with a tech company to help it continue offering the short video app in the United States, a source said citing an internal company letter.

President Donald Trump only agreed to allow Microsoft Corp to negotiate the acquisition of popular short-video app TikTok if it could secure a deal in 45 days, three people familiar with the matter said on Sunday.

The move represents an about-face for Trump and prompted the U.S. tech giant to declare its interest in the blockbuster social media deal that could further inflame U.S.-China relations.

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ByteDance did not immediately respond to requests for comment on the letter.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor



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ByteDance says preliminary talks with a tech firm over TikTok have started – staff letter

ByteDance says preliminary talks with a tech firm over TikTok have started - staff letter

TikTok owner ByteDance said on Monday that the company had initiated preliminary talks with a tech company to help it continue offering the short video app in the United States, a source said citing an internal company letter.

  • Reuters
  • Last Updated: August 3, 2020, 12:24 PM IST

BEIJING/SHANGHAI TikTok owner ByteDance said on Monday that the company had initiated preliminary talks with a tech company to help it continue offering the short video app in the United States, a source said citing an internal company letter.

President Donald Trump only agreed to allow Microsoft Corp to negotiate the acquisition of popular short-video app TikTok if it could secure a deal in 45 days, three people familiar with the matter said on Sunday.

The move represents an about-face for Trump and prompted the U.S. tech giant to declare its interest in the blockbuster social media deal that could further inflame U.S.-China relations.

Also Watch

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ByteDance did not immediately respond to requests for comment on the letter.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor



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Microsoft Confirms Plans to Buy TikTok by September 15; May Invite Other US Investors

Image for Representation. (Picture Source: PTI)

Image for Representation. (Picture Source: PTI)

The official confirmation came after reports surfaced that Microsoft has halted its bid to buy the US operations of China-based TikTok after President Donald Trump vowed to ban the short-video making app.

  • IANS
  • Last Updated: August 3, 2020, 10:36 AM IST

Microsoft has officially confirmed it is in talks to acquire the operations of video-sharing platform TikTok in the US, Canada, Australia and New Zealand markets following a conversation between Microsoft CEO Satya Nadella and President Donald Trump. “Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States,” the tech giant said in a blog post late on Monday.

“Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,” the company said. The official confirmation came after reports surfaced that Microsoft has halted its bid to buy the US operations of China-based TikTok after President Donald Trump vowed to ban the short-video making app that has over 80 million monthly users in the country.

According to a report in The Wall Street Journal, a sale was thought close to agreement “but was put in doubt after the US president’s warning”. Microsoft said that it “will move quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020”.

During this process, Microsoft looks forward to continuing dialogue with the US government, including with the President. The discussions with ByteDance will build upon a notification made by Microsoft and ByteDance to the Committee on Foreign Investment in the United States (CFIUS).

The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the US, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets. Microsoft said it may invite other American investors to participate on a minority basis in this purchase. Microsoft said it would ensure that all private data of TikTok’s American users is transferred to and remains in the US.

“To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred,” it said. Trump said last week that he will ban the popular Chinese-owned video app TikTok from operating in the country through an executive order.

Last week, TikTok unveiled a plan to offer creators $2 billion globally in the next three years. TikTok has denied any Chinese control over its operations. The move to ban TikTok comes at a time of heightened tensions between the Trump administration and the Chinese government over a number of issues, including trade disputes and Beijing’s handling of the coronavirus pandemic.


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Categories
Tech

China's ByteDance to consider international headquarters for TikTok, outside U.S

LONDON Chinese tech company ByteDance said on Monday it was considering moving the headquarters of its TikTok video sharing platform overseas, following a British media report that the unit could relocate to London.

TikTok is under heavy fire from U.S. President Donald Trump and other American politicians over concerns that it poses a national security risk, and Microsoft has emerged as a possible buyer of TikTok’s U.S. operations.

Britain’s Sun newspaper reported on Monday that ByteDance’s founders would soon announce their intention to set up shop for TikTok in London, where other tech majors such as Google and Facebook have a strong presence.

Asked about the report, a spokesperson for ByteDance said an international move for TikTok was under consideration.

“ByteDance is committed to being a global company. In light of the current situation, ByteDance has been evaluating the possibility of establishing TikTok’s headquarters outside of the U.S., to better serve our global users,” the spokesperson said.

Britain’s government said earlier on Monday that the location of TikTok’s headquarters was a decision for the company.

“It would be a commercial decision, and I’m not aware that one has been taken,” a spokesman for British Prime Minister Boris Johnson said.

Any move by ByteDance comes at a fraught time in relations between China and the West, exemplified by the battle over use in 5G telecom networks of kit made by China’s Huawei.

Britain had been trying to walk a tightrope over Huawei until it sided with Washington last month by banning the company from its 5G networks from 2027.

TikTok, whose stars such as Zachary King and Charli D’Amelio have gained worldwide popularity for their brief video performances, has also been in the firing line of U.S. President Donald Trump over supposed security concerns.

Trump however reversed course on a plan to ban the app after Microsoft Corp emerged as a possible buyer of TikTok’s U.S. operations and he gave the two firms 45 days to come up with a deal.

London has also clashed with Beijing over the imposition of a new security law in Hong Kong but Johnson has said he is a Sinophile, and the British government would welcome another large tech investment in Britain particularly as the coronavirus crisis sends the economy into a deep recession and possible trade disruptions loom over Brexit.

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(Writing by Paul Sandle and David Milliken; Editing by Kate Holton, David Holmes and Susan Fenton)

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


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