A TikTok-Microsoft deal may be the most suitable solution for all the parties concerned

For weeks, White House authorities – including Mike Pompeo, Secretary of State as well as President Donald Trump – have raised the possibility of a ban of ByteDance Ltd.’s TikTok app in the U.S., considering its national security issues. 

A prohibition has been raised on the TikTok app in the U.S., in reference to national security concerns. But now it appears that the government could be compliant to a middle ground. On Friday, Bloomberg News stated that Trump intends to order ByteDance Ltd. to dispossess its ownership of TikTok. Sometime later in the afternoon, various media houses informed that Microsoft Corp. is in talks to buy TikTok’s U.S. operations.

To clarify, if ByteDance is compelled to sell TikTok under the administration’s stress, the story won’t be over. TikTok is only one forward in a larger campaign of increasing political and economic stress between the U.S. and China. China may take an avenge by focusing on American business interests on its soil or taking other action steps that further provoke the situation. 

There appear to be two active bidders for the app. One of them is Microsoft. Considering the other one, earlier this week, Reuters informed that some of Bytedance’s U.S financiers have proposed a bid for a major stake of TikTok, thus valuing the company’s non-China functions at $50 billion. The proposal would be about 50 times TikTok’s predicted sales of $1 billion in 2020, Reuters stated.

Microsoft’s businesses would also gain from this deal by adding scale to its flourishing digital advertising operation, secured by its Bing search engine. The organization could even cross-promote TikTok’s social media video features throughout its Xbox gaming console and cloud services. And eventually, ByteDance may value a deal with Microsoft for a totally expedient objective. The software giant valued at nearly $1.6 trillion can rapidly and simply settle the Chinese company’s tens of billions, TikTok is worth without the difficulties of dealing with numerous smaller investment companies.

All in all, a Microsoft-TikTok association may be the most suitable solution for all parties concerned. The happiest may actually be the app’s users, who will be commemorating their service’s existence.

 

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