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Microsoft in talks to buy TikTok in US and other countries


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Events have moved fast since Friday for TikTok’s business in the US, it’s fair to say. We’ll start with the latest news: confirmation from Microsoft that it’s in talks about an acquisition of TikTok in the US and certain other countries, with a mid-September deadline to reach an agreement with the app’s parent company ByteDance – not to mention the US president.

“Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States,” announced Microsoft yesterday.

“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. During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President.”

This would not be your average tech acquisition, clearly. Details: Microsoft and ByteDance are exploring “a preliminary proposal that would involve a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets”.

What’s more, Microsoft might invite other US investors to take minority stakes in TikTok as part of the deal. As we’ve said before, it’s not a wild stretch to suggest that the likes of Apple and Spotify might be interested.

These discussions had been happening before President Trump told reporters on Friday that “as far as TikTok is concerned we’re banning them from the United States… I have that authority. I can do it with an executive order”. At the time, Trump also told reporters he didn’t support a Microsoft deal for TikTok, although it’s quite possible he’ll change his mind at any point in the upcoming process of talks and (if they’re successful) regulatory shenanigans.

Reuters has since reported that ByteDance has agreed not to keep a minority stake in TikTok’s US business, as it had been hoping to do, in an effort to get the deal through.

There are plenty of questions still dangling though: not least what a Microsoft acquisition in the US, Canada, Australia and New Zealand would mean for TikTok’s operations in other countries, and any implications on the music licensing side, particularly any global deals with rightsholders.

We’re in uncharted territory here, and with many of TikTok’s most popular American creators having spent the weekend in a flap telling viewers to follow them on other social platforms in case TikTok gets blocked in the US, the company’s western operation will want swift progress on any deal.

In the meantime, music business goes on. TikTok’s latest hire is David Mogendorff. The former head of artist relations EMEA at YouTube and YouTube Music has now joined TikTok as its head of UK artist partnerships.

Stuart Dredge

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