TikTok’s final fate in the US will be followed by the failure to achieve a divestment sale, which the US government will block, and the usgovernment’s failure to completely divest and sell to a US company (most likely Microsoft) after negotiations and an agreement to maintain operations in the US, but no longer has a relationship with ByDance. That’s what U.S. President Donald Trump said.
Mr. Trump also said that once the sale of TikTok’s U.S. business is successful, the parties to the deal will have to hand over a sum of money to the U.S. Treasury Because it was the U.S. government that brokered the deal.
It’s a naked robber logic.
Trump: Sell or block.
U.S. President Donald Trump is an extremely mercurial man.
On July 31, he said in an interview at the White House that he wanted to ban TikTok. He said:
We may ban TikTok or do something else. There are a lot of options, but a lot of things are happening, so we’ll see what happens. We are looking for many alternatives to TikTok.
On the same day, Trump again spoke about TikTok on his Air Force One plane:
Speaking of TikTok, we’re going to ban them in the United States, and I have that power, and I can use executive orders… In other words, we’re going to cut off, we’re going to cut it off.
Notably, on July 31st, he did not support the reported spin-off involving a US company to acquire TikTok in response to a reporter’s question about “Microsoft’s acquisition of TikTok’s Us business.”
By August 3rd, Mr. Trump’s tone had changed again.
He told a press conference:
We set the date around September 15th, when it will close in the U.S., but if Microsoft or any other big company buys it, it will be interesting… I don’t care if Microsoft buys it or who buys it, as long as it’s a big company, a security company, a very American company buys it, and it’s easier to buy the whole thing than 30% of it.
Mr. Trump also said that whether Microsoft or other companies complete their deal with TikTok, a significant portion of the money must be handed over to the U.S. Treasury “because we (in this case, the U.S. government) made the deal possible.”
In his speech, Trump also made a stark threat:
They won’t have any rights unless we give it.
All in all, the U.S. government under Mr. Trump and his administration has exposed its overbearing side in this case, but in the air, TikTok’s fate in the U.S. has indeed happened, at least with the possibility of survival.
So far, Microsoft, TikTok and the White House have all indicated their attitudes, respectively, as follows:
Microsoft: Has communicated with Mr. Trump and will fully negotiate the completion of the acquisition of TikTok’s U.S. business under U.S. government supervision;
TikTok: Disagree with the U.S. decision to do everything in its power to maintain TikTok’s U.S. operations and is in talks with a technology company, also known as Microsoft.
White House: Either shut down or sell (you have to pay me for the sale), and in short, i have to listen to me.
So, September 15th, is an extremely important time node that determines The fate of TikTok in the United States.
What does Microsoft really want?
Taking over TikTok’s U.S. business, while not a flashpoint for Microsoft, is a good time to take advantage of the fire.
Logically, the U.S. government forced TikTok to sell its U.S. business to a U.S. company, and Byte Dance was unable to resist and was forced to agree. The U.S. company, then, needs to meet at least the following:
There’s just the strength to acquire , including, but not limited to, capital strength and the ability to deal with regulation – there’s a willingness to do it, and you agree with the value of TikTok’s U.S. business, and finally the U.S. government and Trump.
This is indeed a big problem.
But if the problem solver is Microsoft, it seems to be less difficult.
Microsoft, with a trillion-dollar market capitalisation, certainly isn’t short of money, and Microsoft CEO Satya Nadela spoke to Trump on August 2nd, and microsoft is trusted for its $10 billion cloud computing contract with the Pentagon.
In a word, there’s no problem with strength.
In response, Steve Ballmer, microsoft’s former CEO, also said microsoft’s pursuit of TikTok was “exciting” and that Microsoft had the ability to deal with any regulatory issues that came with it.
It’s really full of confidence.
So why does Microsoft look at TikTok’s U.S. business and TikTok’s business in countries like Canada, Australia, New Zealand and so on?
In response, Tom Warren, author of The Verge, amedia outlet, writes that Microsoft really looks at the data and users, especially consumer data, that TIkTok carries. The article says:
TikTok can help correct Microsoft’s blind spots and even affect how other software and services are developed within the company. Microsoft has all the data it needs to commercially use software, but in recent years it has not been successful in terms of consumer-only services, leaving the company with a gap in its insightinto into consumer behavior.
Indeed, whether it’s consumer-related businesses such as Surface, Xbox, Bing, or frontier exploration businesses such as Hololens and Kinect, it needs a lot of data to support it, and Microsoft’s lack of mobile Internet and consumer space over the years has created a huge gap in the To C space.
As the article says:
Microsoft has missed the mobile revolution and has been catching up, but it doesn’t want to miss the next generation of people.
From this perspective, TikTok’s U.S. business does have a huge appeal to Microsoft.
Why hand over the money to the U.S. Treasury?
In fact, for Microsoft, it is ready to hand over money to the U.S. government.
As early as August 2, Microsoft said:
Microsoft is fully aware of the importance of addressing the concerns of the President of the United States. It is committed to acquiring TikTok, subject to a comprehensive security review and provides appropriate economic benefits to the United States, including the U.S. Treasury.
Simply put, in order to buy the TikTok-related business, Microsoft decided to pay the money at both ends, one by Byte Dance and the other with the U.S. government.
Among them, the money paid to the U.S. government is not given in vain.
Danny Crichton, amedia expert, writes that Microsoft’s primary goal of the money is to reduce regulatory challenges after the acquisition is completed, especially when it comes to American teenagers, a regulatoryly sensitive area.
In fact, TIkTok agreed to a $5.7 million privacy settlement with the Federal Trade Commission last year.
In addition to privacy issues, of course, there are export license issues from the Treasury Department, congressional concerns about data protection due to the source of the app, and potential antitrust issues from the judiciary…
All in all, it’s going to be a huge sum, maybe even billions of dollars.
However, another factor in Microsoft’s agreement with ByteDance is the price of the TikTok-related business. There have been media reports that TikTok’s U.S. business is worth tens of billions of dollars, and Microsoft used to be a big deal, but there is a lot of uncertainty in the deal.
Even Former Microsoft CEO Michael Ballmer says the key is price.