Why Microsoft Is After TikTok?

  • AUTHOR: anam
  • POSTED ON: August 4, 2020

TikTok has been in the news for quite a long now, and its epic saga continues with a major twist this time as Microsoft is planning to acquire the Chinese owned video-making application.

Last week, it seemed that TikTok was taking its last breath in the U.S. The President stated that when it comes to TikTok, it is getting banned real soon.

Indeed, Trump’s administration considers a national security threat because of its Chinese ownership.

Trump thinks everything associated with the word ‘China’ is a nuke, even a service for dancing teenagers!

While Tiktok is struggling to sustain its American presence alive, Microsoft emerged as a potential, ultimate and unexpected savior!

Microsoft is exploring the acquisition bid for TikTok’s American operations, and it seems a bit (for some, highly) unusual!

Image credit: The Verge

Microsoft on Sunday stated that the company is in talks to acquire TikTok, after a conversation between CEO Satya Nadella and President Donald Trump.

The acquisition seems a bit tricky and difficult, with business analysts stating that it’s going to be worthwhile for both the companies.

Image credit: Bangkok post

In recent years, Microsoft shifted its strategy away from consumers towards businesses. The company known for the consumer plays such as the Groove Music Service, Microsoft Band fitness device, Mixer streaming service, and windows phone. The question stands “how does an application for dancing individuals fit with Microsoft’s sober business demographic?” or to put it in simpler terms, “what’s in it for Microsoft?”

Taking over the application what it is said to be “The fickle infatuation of tweens”, would give the tech giant “control of one of the largest and most influential social networks in the country.” if the deal gets sealed, it could offer a different advantage to the company:

Access to the ocean full of data!

The fundamental part of sealing a deal with the biggest social network TikTok is having access to the ocean full of data. This same thing appears to be a nightmare for the Trump administration as they think that the application’s potential link with the Chinese government could lead to data exploitation.

Microsoft identifies the importance of the accessibility to data and writes in its blog post that the company will ensure that all the data of American users of the app is transferred to and stays in the US.

As a matter of fact, Microsoft could use this data for its interest too. The company is utilizing their Xbox live to research future software and hardware objects, and the data gained from TikTok could help them to analyze better how consumers use their products.

Through TikTok, the company can tap into the consumers’ insights and even influence how software and services are produced within the company. The young American population is heavily relied on Android and iOS devices, with Gmail dominating electronic mail usage, and even Google documents are being used for document sharing. Microsoft seems to be out of the picture so far! They didn’t catch up with digital evolution and are trying to keep up the pace ever since, but now the company is not ready to lose future young workers.

The video making application TikTok will give direct access to millions of youngsters and content makers. Previously, the company desperately tried to tap into content creation through introducing video creation applications in their operating system, TikTok will make their process a bit easier when the users can easily make one through their mobile devices.

Facebook and Google will be direct competitors

A cathartic Microsoft-TikTok merge could establish significant competition for Facebook and Google, influencing other Microsoft products like Minecraft, Xbox and LinkedIn. But when a tech giant is in the war for market dominance, it is unusual to see White house pushing application into the boundaries of the largest companies in the world. Recently, strong video-conferencing application Slack accused Microsoft of anticompetitive behaviour.

Microsoft’s experience with consumers-based business is mixed

We cannot say if the TikTok, one of the biggest Chinese apps’ deal would turn out to be a success, considering that Microsoft has already had a mixed experience with consumer businesses. For example, keeping in view the fate of search engine Bing or the unfortunate acquisition of Nokia’s smartphone business. More recently in June, Microsoft said it is ceasing operation of Mixer, a video-game-streaming platform, and shutting down all of its retail stores.

It’s a risky and complicated acquisition

Microsoft is probably taking the biggest risk here! Being new to the world of content moderation, it’s interesting to see how the tech giant would control Tiktok operations in the USA.

Considering the headaches that come with the rebranding of an already famous brand and popular app, it’s certain that the company wouldn’t opt to go with new features or style.

The question arises “Will the company’s management needs to invest so much attention to Tiktok and its related political problems that could distract the company’s very definite profitable aim of catering business customers?”

It’s a challenging bet, and Microsoft is stuck in it so let’s see what TikTok faces next. Acquiring the biggest social network could benefit the company, but if the deal gets final, then Microsoft would not be the only one benefitting from this acquisition. In fact, Trump would be pleased to have unlaced one of China’s threatening influences over the country’s social network. And of course, he won’t be hesitant to take any of the credit.

Brace yourself to see more climaxes and twists in TikTok’s epic saga in the coming weeks, but now Microsoft is sealing the deal with the deadline hovering on the head till September 15th, the clock is literally TikTok-ing!

Updated August 4, 2020
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