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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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Tech

Trump to Give TikTok's Chinese Owner 45 Days to Agree Sale, Say Sources

Image for Representation. (Picture Source: PTI)

Image for Representation. (Picture Source: PTI)

Banning TikTok would alienate many of its young users ahead of the US presidential election in November, and would likely trigger a wave of legal challenges.

  • Reuters WASHINGTON
  • Last Updated: August 3, 2020, 10:00 PM IST

President Donald Trump has agreed to give China’s ByteDance 45 days to negotiate a sale of popular short-video app TikTok to Microsoft Corp, two people familiar with the matter said on Sunday.

US officials have said TikTok under its Chinese parent poses a national risk because of the personal data it handles. Trump said on Friday he was planning to ban TikTok in the United States after dismissing the idea of a sale to Microsoft. [nL2N2F21NE]

But following a discussion between Trump and Microsoft CEO Satya Nadella, the Redwood, Washington-based company said in a statement on Sunday that it would continue negotiations to acquire TikTok from ByteDance, and that it aimed to reach a deal by Sept. 15.

It was not immediately clear what changed Trump’s mind. Banning TikTok would alienate many of its young users ahead of the US presidential election in November, and would likely trigger a wave of legal challenges. Several prominent Republican lawmakers put out statements in the last two days urging Trump to back a sale of TikTok to Microsoft. [L1N2F4087]

“A win-win in the making,” Republican Senator Lindsey Graham tweeted in response to Trump’s new stance on Sunday.

The negotiations between ByteDance and Microsoft will be overseen by the Committee on Foreign Investment in the United States (CFIUS), a US government panel that has the right to block any agreement, according to the sources, who requested anonymity ahead of a White House announcement. Microsoft cautioned in its statement that there is no certainty a deal will be reached.

“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,” Microsoft said in a statement.

ByteDance and the White House did not immediately respond to requests for comment.

As relations between the United States and China deteriorate over trade, Hong Kong’s autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world’s two largest economies.

Microsoft, which also owns professional social media network LinkedIn, would become a major competitor to social media giants such as FaceBook Inc and Snap Inc were its bid for TikTok to succeed.

Under the proposed deal, Microsoft said it would take over TikTok’s operations in the United States, Canada, Australia and New Zealand. It said it would ensure that all private data of TikTok’s American users is transferred to and remains in the United States.

Microsoft may invite other American investors to acquire minority stakes in TikTok, the company added. About 70% of the outside capital ByteDance has raised has come from the United States.

It is not clear how much Microsoft could pay for TikTok. Reuters reported last week that ByteDance’s valuation expectations for the app exceeded $50 billion, although US pressure to divest it could lower that price tag. [nL2N2F00J5]

A key issue in the negotiations will be separating TikTok’s technology from

ByteDance’s infrastructure and access, to alleviate US concerns about the integrity of personal data. ByteDance owns a Chinese short video app called Douyin that was based on the same code used for TikTok.

One idea under consideration is to give Microsoft and ByteDance a transition period to develop technology for TikTok that will be completely separate from ByteDance, one of the sources said.

APP SCRUTINY

The United States has been increasingly scrutinizing app developers over the personal data they handle, especially if some of it involves US military or intelligence personnel. Ordering the divestment of TikTok would not be the first time the White House has taken action over such concerns.

Earlier this year, Chinese gaming company Beijing Kunlun Tech Co Ltd sold Grindr LLC, a popular gay dating app it bought in 2016, for $620 million after being ordered by CFIUS to divest.

In 2018, CFIUS forced China’s Ant Financial to scrap plans to buy MoneyGram International Inc over concerns about the safety of data that could identify US. citizens.

ByteDance was valued at as much as $140 billion earlier this year when one of its shareholders, Cheetah Mobile CMCM.N, sold a small stake in a private deal, Reuters has reported. The start-up’s investors include Japan’s SoftBank Group Corp.


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Categories
Tech

Microsoft talks to buy TikTok's U.S. operations spurs ire in China

BEIJING/HONG KONG A potential shotgun wedding to Microsoft Corp for TikTok’s U.S. operations provoked an outcry on Chinese social media as well as criticism from a prominent Chinese investor in TikTok owner ByteDance.

The U.S. tech giant formally declared its interest on Sunday after President Donald Trump, who has cited national security risks posed by the Chinese-owned short video app, reversed course on a planned ban and gave the two firms 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 owns the social media network LinkedIn for professional workers, is also seeking to buy TikTok’s Canadian, Australian and New Zealand interests.

ByteDance has not publicly confirmed the sale talks. 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 it did not identify to clear the way “for us to continue offering the TikTok app in the U.S.”

But clinching a deal – potentially worth billions of dollars and a lightning rod for crumbling U.S-China relations – that will satisfy all parties will be a tall order.

“A forced deal under Washington’s shotgun could open up for endless litigations if it should result (in) an unfavorable outcome to existing private shareholders,” said Fred Hu, chairman of Primavera Capital Group, an investor in ByteDance and one of China’s best known private equity groups.

Hu said Microsoft was a credible buyer but questioned how selling large parts of TikTok’s operations at such an early stage of its growth could ever be a good deal for ByteDance.

“It absolutely makes no sense. Bytedance is an innocent victim of the mad politics and mad geopolitics. It is a sad outcome for Bytedance, for entrepreneurial capitalism, and for the future of global commerce,” he said.

Tech bankers in Asia said investment banks working on the deal would have to be careful not to antagonize Trump.

“This is not a standard M&A situation…this is hard to predict,” said one senior banker with a U.S bank in Hong Kong, saying that it would be a question of how to structure a deal in a way that would keep Washington happy.

Zhang’s letter to staff also said ByteDance did not agree with the stance taken by the Committee on Foreign Investment in the United States (CFIUS), which scrutinizes deals for national security risks, 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 respond to Reuters requests for comment.

The Chinese government declined to comment specifically on the Washington’s move to force a sale of TikTok’s U.S. operations.

The United States has been “stretching the concept of national security”, presuming that companies are guilty without evidence, China’s foreign ministry spokesman Wang Wenbin told a briefing after being asked about U.S. actions against Chinese software companies.

The topic “ByteDance has agreed to divest TikTok’s U.S. operations” was one of the most discussed subjects on China’s Twitter-like Weibo platform on Monday, with over 920 million views.

Some commentators criticized ByteDance, saying it has not shown as much backbone as Huawei Technologies [HWT.UL], also in the crosshairs of U.S.-China tensions and now on a U.S. trade blacklist.

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“(ByteDance) kneeled down so fast that it didn’t even wait for the Chinese government to retaliate,” said one comment that was ‘liked’ over 5,000 times.

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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Categories
Tech

Republican senators back plan to sell TikTok's U.S. operations

WASHINGTON Two Republican senators back a plan by China’s ByteDance to divest the U.S. operations of TikTok after President Donald Trump said on Friday he had decided to ban the popular short-video app.

Senator John Cornyn, a Texas Republican, said on Twitter on Sunday that divestment “and purchase by U.S. company is win-win.”

Treasury Secretary Steven Mnuchin told ABC on Sunday that the Committee on Foreign Investment on the United States “agrees that TikTok cannot stay in the current format because it risks sending back information on 100 million Americans.”

Mnuchin said he and U.S. congressional leaders “all agree there has to be a change.” He added Trump could “either force a sale or the president can block the app using (International Emergency Economic Powers Act). And I’m not going to comment on my specific discussions with the president.”

U.S. officials have said TikTok under its Chinese parent poses a national risk because of the personal data it handles.

Reuters reported on Saturday that ByteDance agreed to divest the U.S. operations of TikTok completely in a bid to save a deal with the White House.

ByteDance was previously seeking to keep a minority stake in the U.S. business of TikTok, which the White House had rejected. Under the new proposed deal, ByteDance would exit completely and Microsoft Corp would take over TikTok in the United States, according to sources.

On Saturday, Republican Senator Lindsey Graham said the “right answer” to address security concerns about TikTok would be to “have an American company like Microsoft take over TikTok. Win-win. Keeps competition alive and data out of the hands of the Chinese Communist Party.”

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White House adviser Peter Navarro told Fox News Trump would announce further action on TikTok on Sunday or Monday.

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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Exclusive: TikTok's Chinese owner offers to forego stake to clinch U.S. deal – sources

NEW YORK/WASHINGTON China’s ByteDance has agreed to divest the U.S. operations of TikTok completely in a bid to save a deal with the White House, after President Donald Trump said on Friday he had decided to ban the popular short-video app, two people familiar with the matter said on Saturday.

U.S. officials have said TikTok under its Chinese parent poses a national risk because of the personal data it handles. ByteDance’s concession will test whether Trump’s threat to ban TikTok is a negotiating tactic or whether he is intent on cracking down on a social media app that has up to 80 million daily active users in the United States.

Trump told reporters onboard Air Force One late on Friday that he would issue an order for TikTok to be banned in the United States as early as Saturday. “Not the deal that you have been hearing about, that they are going to buy and sell… We are not an M&A (mergers and acquisitions) country,” Trump said.

ByteDance was previously seeking to keep a minority stake in the U.S. business of TikTok, which the White House had rejected. Under the new proposed deal, ByteDance would exit completely and Microsoft Corp would take over TikTok in the United States, the sources said.

Some ByteDance investors that are based in the United States may be given the opportunity to take minority stakes in the business, the sources added. About 70% of ByteDance’s outside investors come from the United States.

The White House declined to comment on whether Trump would accept ByteDance’s concession. ByteDance in Beijing did not respond to a request for comment

Under ByteDance’s new proposal, Microsoft will be in charge of protecting all U.S. user data, the sources said. The plan allows for another U.S. company other than Microsoft to take over TikTok in the United States, the sources added.

Microsoft did not respond to a request for comment.

As relations between the United States and China deteriorate over trade, Hong Kong’s autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world’s two largest economies.

ByteDance has been considering a range of options for TikTok amid U.S. pressure to relinquish control of the app, which allows users to create short videos with special effects and has become wildly popular with U.S. teenagers.

ByteDance had received a proposal from some of its investors, including Sequoia and General Atlantic, to transfer majority ownership of TikTok to them, Reuters reported on Wednesday. The proposal valued TikTok at about $50 billion, but some ByteDance executives believe the app is worth more than that.

ByteDance acquired Shanghai-based video app Musical.ly in a $1 billion deal in 2017 and relaunched it as TikTok the following year. ByteDance did not seek approval for the acquisition from the Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security risks. Reuters reported last year that CFIUS had opened an investigation into TikTok.

APP SCRUTINY

The United States has been increasingly scrutinizing app developers over the personal data they handle, especially if some of it involves U.S. military or intelligence personnel. Ordering the divestment of TikTok would not be the first time the White House has taken action over such concerns.

Earlier this year, Chinese gaming company Beijing Kunlun Tech Co Ltd sold Grindr LLC, a popular gay dating app it bought in 2016, for $620 million after being ordered by CFIUS to divest.

In 2018, CFIUS forced China’s Ant Financial to scrap plans to buy MoneyGram International Inc over concerns about the safety of data that could identify U.S. citizens.

ByteDance was valued at as much as $140 billion earlier this year when one of its shareholders, Cheetah Mobile, sold a small stake in a private deal, Reuters has reported. The startup’s investors include Japan’s SoftBank Group Corp.

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The bulk of ByteDance’s revenue comes from advertising on apps under its Chinese operations including Douyin – a Chinese version of TikTok – and news aggregator app Jinri Toutiao, as well as video-streaming app Xigua and Pipixia, an app for jokes and humorous videos.

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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Categories
Tech

Zoom Surpasses TikTok's Record of Most Downloads on Apple's App Store

FILE PHOTO:  A 3D printed Zoom logo is placed on the keyboard in this illustration taken April 12, 2020. REUTERS/Dado Ruvic/Illustration/File photo

FILE PHOTO: A 3D printed Zoom logo is placed on the keyboard in this illustration taken April 12, 2020. REUTERS/Dado Ruvic/Illustration/File photo

From April through June-end, Zoom was downloaded from App Store 94 million times more than TikTok’s previous record of 67 million downloads.

  • IANS
  • Last Updated: July 21, 2020, 2:14 PM IST

US-based Video meet app Zoom app has broken Chinese short video making app TikTok’s record of most downloaded app on Apple App Store. From April through June-end, Zoom was downloaded from App Store 94 million times ’40 per cent more than TikTok’s previous record of 67 million downloads, reveals data from analytics firm Sensor Tower.

YouTube, Instagram, Facebook, Google Meet, Messenger, WhatsApp, Netflix and Microsoft Teams rounded out the top 10 for the App Store. Overall, Zoom was downloaded 303 million times during Q2 on both App Store and Google Play Store. According to Sensor Tower data, the spread of COVID-19 made a dramatic impact on the app landscape.

Worldwide app downloads reached an all-time high of 37.8 billion in the second quarter – an increase of 31.7 per cent year-over-year. App Store installs grew 22.6 per cent to 9.1 billion, while Google Play saw 34.9 per cent growth, reaching 28.7 billion.

Worldwide app downloads reached an all-time high of 37.8 billion in Q2 2020, an increase of 31.7 per cent year-over-year. App Store installs grew 22.6 per cent to 9.1 billion, while Google Play saw 34.9 per cent growth, reaching 28.7 billion. Zoom in June announced that its revenue surged 169 per cent to $328.2 million in Q1 from a year earlier.


Categories
Tech

TikTok's Parent Company ByteDance Predicts Loss of Over $6 Billion Following India's Ban on Chinese Apps

ByteDance logo (Pic Source: Reuters)

ByteDance logo (Pic Source: Reuters)

The ByteDance apps banned were its short video platforms TikTok and Vigo Video, as well as its social networking app Helo.

  • PTI
  • Last Updated: July 3, 2020, 7:56 PM IST

Chinese tech giant unicorn ByteDance Ltd. is anticipating a loss of over USD 6 billion after three of its apps, including the hugely popular video app TikTok, were banned by India this week, a media report in China said. Besides Tiktok, India banned on Monday 58 other apps with Chinese links, including the popular UC Browser, for engaging in activities “prejudicial to sovereignty and integrity of India, defence of India, the security of the state and public order”. The ban came in the wake of the ongoing stand-off along the Line of Actual Control in eastern Ladakh with Chinese troops.

The USD 6 billion amount is most likely more than the combined losses for all the other Chinese apps banned by India, China’s Caixinglobal.com reported, quoting sources close to the company’s senior management. ByteDance became one of China’s latest homegrown technology companies to run into growing resistance from foreign governments wary of the perceived ties to the Chinese government and concerns about protecting user data, it said.

Describing India’s ban of 59 China-developed apps as unprecedented, the report said it is a huge blow to the global expansion of TikTok, which is touted as the most popular Chinese app overseas. India is its largest market in terms of users outside China, where the service is called Douyin. The ByteDance apps banned were its short video platforms TikTok and Vigo Video, as well as its social networking app Helo. Tencent’s messaging platform WeChat and five of its other apps were also banned. Other big tech China firms, including Alibaba Group Holding Ltd. and Baidu Inc., also had their products banned.

All the 59 apps have now been removed from Apple Inc. and Google LLC’s app stores for the Indian market. TikTok was downloaded in India 611 million times in this year’s first quarter, equating to 30.3% of its total downloads worldwide in the quarter and nearly double the total number of India downloads for all of 2019, the report quoted another publication, SensorTower, as saying. The consequences of India’s latest decision could be more long-lasting, analysts told Caixin. Responding to the Indian government’s move, TikTok said it would fully comply with the decision. ByteDance employs over 2,000 full-time local staff in India.


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