Microsoft reveals talks to buy TikTok US, Canada, Australia, and New Zealand

M

icrosoft (MSFT) confirmed in a statement that it is not only in talks to buy US operations for the video social media platform TikTok, but also in Canada, Australia, and New Zealand.

The US tech giant said in a lengthy blog post on its site that it is exploring a “preliminary proposal” to purchase the TikTok service in those countries with the platform’s owner ByteDance, which “would result in Microsoft owning and operating TikTok in these markets.” It added that Microsoft “may invite other American investors to participate on a minority basis in this purchase.”

It added that it aims to complete these discussions no later than 15 September this year.

The tight deadline comes after a report that US president Donald Trump only agreed to allow Microsoft to negotiate the acquisition if it could secure a deal in 45 days.

“This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections. The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries,” it added.

Representatives at TikTok did not immediately comment on the statement when Yahoo Finance UK reached out.

Chinese tech firm ByteDance, whose last valuation of $78bn (£61bn) makes it the world's most valuable start-up, is behind the app that is dominating the lives of millennials and generation Z. It only launched in September 2016 but, outside China, it has already amassed 300 million active users and 1.4 billion total installs to date.

TikTok videos use either user generated music or commentary, sound from shows, movies, or games, or actual songs or mash-ups by artists, which are called “sounds.”

Users can record videos themselves and either attach their own sound recordings or select a “sound” that is available within the app. Special effects, templates, and video timers are also available.

The popularity has seen it reshape the music industry and has created overnight celebrities/influencers on the app.

Last week, US president Donald Trump told reporters that he intended to ban the app from the US due to security concerns. In December 2019, the Pentagon had already issued a warning that military personnel should delete TikTok from all devices due to "potential security risks associated with its use,” and it was banned from devices for US Navy, AirForce, and Department of Homeland Security personnel.

Previously, Trump had talked down proposals for TikTok selling its US part of the business. However, in a change of tact, Trump seems to back a Microsoft buyout.

Meanwhile, TikTok responded to the US ban in a statement, saying:

“These are the facts: 100 million Americans come to TikTok for entertainment and connection, especially during the pandemic. We've hired nearly 1,000 people to our US team this year alone, and are proud to be hiring another 10,000 employees into great paying jobs across the US.

"Our $1bn creator fund supports US creators who are building livelihoods from our platform. TikTok US user data is stored in the US, with strict controls on employee access. TikTok's biggest investors come from the US.

"We are committed to protecting our users' privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform."

Vanessa Pappas, general manager of TikTok North America said in a video statement: “We’re not planning on going anywhere.”

A message from Vanessa Pappas, General Manager of TikTok North America: “We’re not planning on going anywhere.” pic.twitter.com/Bhr9D0U2zw

— Taylor Lorenz (@TaylorLorenz) August 1, 2020

In July, TikTok’s head of public policy for Europe Theo Bertram told BBC Radio 4 there was “zero truth” to allegations the Chinese state had access to users’ data.