The clock is ticking for TikTok. The Chinese owned social video platform only has until September 15, 2000, to sell off its US-based operations. American President Donald Trump signed an executive order restricting TikTok from operating in the United States after September 15. The order says that data from the TikTok app “threatens to allow the Chinese Communist Party access to Americans’ proprietary and individual info.” Trump’s executive order sent TikTok’s parent company, ByteDance, into a desperate rush to find a US company to take over their assets, which are valued at $50 billion.
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Microsoft Is The Frontrunner To Aquire The TikTok App
Microsoft is the reported frontrunner in discussions with ByteDance for acquiring its operations in the United States, Canada, New Zealand, and Australia. With a $1.6 trillion market value and $130 billion in cash, Microsoft already has the financial means to make a big purchase like TikTok.
Microsoft already owns the professional social media platform LinkedIn, but acquiring TikTok could make them a true social media giant at the level of Facebook.
Twitter Also Wants To Buy TikTok
Microsoft might have a head start, but they aren’t the only US company looking to acquire TikTok’s operations. According to the Wall Street Journal, Twitter is also in preliminary talks with TikTok about an offer.
I don’t think Twitter has enough cash or financing options to secure TikTok. Twitter might acquire TikTok if talks with Microsoft fall through, and they have no other choice.
Facebook And TikTok?
What about Facebook? Does Facebook want to buy TikTok too? The social network is very interested in expanding and building new relationships in China that attract Chinese advertising revenue. However, with their current anti-trust issues, it’s unlikely they will make a serious bid for TikTok.
Facebook has already been very aggressive at copying TikTok’s unique features and adding them to Instagram. If Facebook can give Instagram users TikTok’s features, then Instagram users won’t have a reason to switch to TikTok. This is the same strategy they’ve used to keep Instagram ahead of Snapchat, and it’s been working.
Can Google Buy TikTok?
Google has the same issue as Facebook. Even though Google has the cash to purchase TikTok, they have too many anti-trust issues even to consider moving forward.
Will Oracle Buy TikTok?
Thinking out of the box, what about a tech company like Oracle? Although Oracle isn’t a tech company household name like Apple or Facebook, Oracle is still one of the top 100 global public companies in the world. Adding TikTok to its portfolio of products would help the company grow beyond its database services and dramatically boost its stock price.
Although Oracle doesn’t have enough cash to cleanly acquire TikTok from ByteDance, they are influential and could attract 3rd party investors to help fund the project.
Walmart And TikTok?
Here’s another out of the box idea. What about Walmart? The US-based retailer has tried unsuccessfully to expand into the digital space. Their acquisition of video-on-demand service Vudu in 2010 never became the competitor to Netflix that the company had hoped. TikTok’s integration of e-commerce and advertising would be a valuable fit for Walmart’s business model.
TikTok Vs. Donald Trump
ByteDance’s legal team is extremely busy right now. In addition to working on paperwork for potential buyers, they are also preparing a lawsuit against the Trump administration. The company claims that Trump’s actions are unconstitutional because they didn’t allow TikTok an opportunity to react.
“We are shocked by the recent Executive Order, which was issued without any due process,” stated TikTok. “The decision makes it plain that there has been a reliance on unnamed ‘reports’ with no citations, fears that the app ‘may be’ used for misinformation campaigns with no substantiation of such fears, and concerns about the collection of data that is industry standard for thousands of mobile apps around the world.”
Trump isn’t alone in his distrust of TikTok. It’s estimated that about 75% of Americans support banning TikTok. Even TikTok users don’t trust TikTok with their data.
TikTok’s Sloppy History With User Data, Content Filtering And Privacy
Although a direct line between TikTok and the Chinese government is currently unproven, TikTok’s sloppy handling of data has been a significant concern for governments worldwide.
Last year, TikTok settled in court and agreed to pay a $5.7m fine acknowledging allegation that it had illegally collected personal information from children under 13 years old in the United States.
In July 2020, watchdog groups in South Korean fined TikTok $155,000 after they uncovered failures by TikTok to adequately protect user data from South Koreans.
TikTok was also exposed for filtering out content posted by users who were ugly, poor, or disabled. As TikTok tried to grow its aspirational image, videos posted by users outside of that criteria disappeared from the platform. If the TikTok app is already censoring content posted by users who aren’t rich and pretty, would they filter out content and users that criticize China as we get closer to the US Presidental elections?
Who Will Buy TikTok?
Buying TikTok now while they are under pressure to sell could be a very profitable move. According to ByteDance, TikTok will earn $1 billion in revenue this year and is forecasted to generate $6 billion in 2021. With that kind of growth, even with a $50 billion price tag, anyone buying TikTok could make their investment back in only a few years.
However, one major area of concern is TikTok’s 12 to 24 years old user base. This age group is constantly looking for the next big thing and doesn’t show much loyalty when it comes to social networks. AOL’s Bebo failure and the failed relaunch of MySpace under Time, Inc. are just a couple of examples.
What do you think? Who should buy TikTok? Microsoft, Twitter, or someone else? Make a prediction in the comments, and let’s see if you are right on or before September 15, 2000.
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Frank Wilson is a retired teacher with over 30 years of combined experience in the education, small business technology, and real estate business. He now blogs as a hobby and spends most days tinkering with old computers. Wilson is passionate about tech, enjoys fishing, and loves drinking beer.
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