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The Microsoft-Tik Tok deal

By Archit Aggarwal and Nandini Sharma

 

Microsoft’s plan to enter the politically fraught world of social media has been the most-talked-about deal with a big over-looming question - Will it be acquiring only a slice of the cake (the US operations) or the whole (global operations)? The deal might also land the tech giant into the political arena which it has been avoiding for long.


This summer has been quite fateful for ByteDance, the owner of the rapidly growing social networking platform, TikTok. After a warning signal given by various US-based companies to their employees to uninstall TikTok from their cell-phones, President Donald Trump threatened the Chinese app by proposing a ban on it in the US territory. Just before a day of the ban, Trump delayed the scheduled ban and extended the deadline till September 20th, to hear a concluding statement from Microsoft about its prospective deal with TikTok. In the purview of national security concerns, Trump was worried about the massive assortment of information that the Chinese app collects from its users which might permit the Chinese Communist Party to peak into the Americans’ dossiers of personal data - including the location and corporate espionage of Federal employees and contractors.


Microsoft’s founder and philanthropist, Bill Gates stated the company’s potential TikTok deal has turned into a poisoned chalice, after considering the benefits and detriments of it. Gates seems too perplexed as to how to proceed with the deal, especially after Trump’s condition of the deal benefitting the US Treasury by having a cut of sorts from the acquisition. The majority of the users of TikTok belong to Asia and Europe which suggests that Microsoft might take over the global operations after all rather than making several investments for buying just a part which might even lead to revenue challenges! Since Microsoft has no big offerings in the social networking space, the deal might help the giant to emerge as a strong competitor in the key markets with the help of an existing enormous user base that TikTok owns.


Over a month ago, TikTok was made unavailable in the Indian territory by the Central Government alongside 105 other Chinese apps, keeping in view the sovereignty, integrity and security of its citizens. However, the deal might resume the functioning of the short-video platform in the country, yet again.


Therefore, this complicated deal would give Microsoft a great kick-start in the social networking arena but at the risk of being part of a larger trade war between the US and China.


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