Microsoft Confirms That It Wants To Buy TikTok

The Xbox company's next big acquisition could be TikTok.

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The rumors were right--Microsoft has confirmed that it is pursuing an acquisition of the viral app TikTok. The Xbox company said in a blog post that it is "committed to acquiring TikTok" pending a review of the "security" of the app, although it's unclear how the Xbox side of the business could factor in if the acquisition does indeed happen.

US President Donald Trump has expressed concerns about TikTok, and in particular its ownership by a Chinese company, ByteDance. Trump has suggested that he may attempt to order ByteDance to divest its US ownership, and that's where Microsoft could come in.

Trump and Microsoft CEO Satya Nadella recently spoke about the matter, and Microsoft says it will move to address Trump's issues with the app. Microsoft will continue to work with the US government and Trump during the acquisition discussions, the statement said.

"Microsoft fully appreciates the importance of addressing the President's concerns," a spokesperson for Microsoft said. "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 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," the statement added. "During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President."

According to Reuters, ByteDance has agreed to sell its US operations, and it appears Microsoft may be the company to buy it. Microsoft said it wants to acquire TikTok's operations in the US, Canada, Australia, and New Zealand.

Microsoft has also said it will implement "world-class security, privacy, and digital safety protections" for TikTok, should it emerge as the new owner of the company.

"Among other measures, Microsoft would ensure that all private data of TikTok's American users is transferred to and remains in the United States," Microsoft said. "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."

There is no word yet on the fee that Microsoft would pay to acquire TikTok's US operations, but it would likely be a giant sum given the huge popularity and scale of the platform. Microsoft said it may work with other American investors to help generate the cash to make the deal.

"These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed," Microsoft said. "We do not intend to provide further updates until there is a definitive outcome to our discussions."

TikTok recently hired former Disney executive Kevin Mayer to head up its US operations as CEO.

Microsoft shut down streaming site Mixer last month as it continues to focus on its enterprise-related businesses. It's unclear how or if a TikTok acquisition might factor into the Xbox business as the Xbox Series X's release approaches. It could be as simple as Xbox ads appearing in the app or deeper integration for sharing videos, but at this point, it's merely guesswork.

Microsoft Full Statement On TikTok Acquisition

"Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States.

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 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 United States 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 United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets. Microsoft may invite other American investors to participate on a minority basis in this purchase.

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.

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.

Microsoft appreciates the U.S. Government’s and President Trump’s personal involvement as it continues to develop strong security protections for the country.

These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed. We do not intend to provide further updates until there is a definitive outcome to our discussions."

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