TikTok's U.S. Fate Nears An Answer
TikTok continues to be in the news as pressure grows on the popular video sharing app over its ties to China.
News broke last week that U.S.-based investors in TikTok parent ByteDance have attempted to strike a deal that would see majority ownership of TikTok transferred to them. The investors are valuing TikTok at $50 billion, giving it a valuation of 50 times its projected 2020 revenue of about $1 billion.
Just a couple of days later on Friday, news broke that Microsoft was in discussions with ByteDance to acquire the U.S. operations of TikTok. The talks were subsequently reportedly put on hold just the next day following comments by U.S. President Donald Trump on Friday evening.
"As far as TikTok is concerned we’re banning them from the United States," Trump said. "Well, I have that authority. I can do it with an executive order or that." Trump also said he was against a deal in which Microsoft would buy TikTok's U.S. operations.
"TikTok U.S. user data is stored in the U.S., with strict controls on employee access," TikTok said in response. "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."
U.S. Secretary of State Mike Pompeo echoed Trump's comments yesterday, saying Trump will announce something within a few days to address "a broad array of national security risks."
"These Chinese software companies doing business in the United States are feeding data directly to the Chinese Communist Party, their national security apparatus," Pompeo said. "Could be facial recognition pattern, it could be information about their residence, their phone numbers, their friends, who they’re connected to. Those are the issues that President Trump’s made clear we’re going to take care of. These are true national security issues."
Despite the tough talk, it appears both TikTok and Microsoft are still lobbying to get a deal done. Officials from the two sides, which began talks about a month ago, are reportedly in discussions with the White House to prevent a full ban of TikTok in the U.S.
Microsoft could reportedly still walk away from the deal even if the White House approves it. There are also reportedly other U.S. companies that are
interested in acquiring TikTok's U.S. operations.
"Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States," Microsoft said. "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."
While the fate of TikTok is yet to be determined, there's potentially a large void to be filled as the app's popularity has skyrocketed. The news comes as Facebook's TikTok clone Instagram Reels prepares for its global launch. The news may also be enough for Twitter to finally revive once-popular Vine.
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