Tech giant Microsoft Corporation (NASDAQ: MSFT) is planning to acquire very popular social media app nowadays TikTok.
TikTok is rapidly gaining popularity among younger population and turning into the next big consumer social media platform, being a decent competitor to Snapchat, Instagram, and Facebook, both in terms of scale and the features involved in content engaging.
As it was announced, Microsoft representatives are in discussion now with ByteDance, TikTok’s parent company and they plan to finish the acquisition deal by middle of September. According Microsoft data, the deal will cost between $10 billion and $30 billion.
Why did Microsoft decide to buy TikTok?
Microsoft came to this decision for security reasons - lately U.S. President Donald Trump decided to ban the TikTok app as TikTok might collect data for further use by Beijing on Americans. The president set a deadline of September 15th, saying he wouldn’t ban the app if it were sold to an American company.
It is all about data protection. Microsoft acknowledges its importance as USA government wants TikTok’s American user’s data to be transferred to and remains in the territory of the United States.
New TikTok would have major operations as well as offices in the territory of United States, Canada, Australia, and New Zealand operating and managing the company under a new structure.
New opportunities for Microsoft
TikTok opens for Microsoft new target customers - millions of youngsters will start to use the application to watch and create video content. Before Microsoft tried to adapt its Windows operating system to be easier with video creation apps, but with it has never been easier to create such a stunning video directly from smartphone.
Microsoft could take advantage and place ads for Surface, Xbox, and their other products.
Microsoft also has broad ambitions for artificial intelligence with its Azure project and investment in AI University before. TikTok already utilizes artificial intelligence for facial recognition, integrated filters and in the recommendation engine that determines popular videos. Thus, TikTok might become a perfect gateway into the mobile world of AR for Microsoft.
If the deal goes through, Microsoft would have one year to transfer TikTok’s 15 million code lines to the U.S. Microsoft during this time is looking to separate the app from ByteDance.
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