[Update, Saturday, 2:50 p.m. Pacific: The Wall Street Journal reported that negotiations between ByteDance and Microsoft are on hold following the president’s comments Friday evening opposing the deal.]
[Update, Saturday, 8:00 a.m. Pacific: Reuters reported that ByteDance has agreed to completely sell off its U.S. operations of TikTok, with the potential for Microsoft to take over the app. Sources told Reuters that Microsoft would be in charge of protecting U.S. user data, and that the deal allows another U.S. company to operate TikTok in the U.S. It’s not yet clear if Microsoft and TikTok have reached a deal.
In a video message sent Saturday, TikTok U.S. General Manager Vanessa Pappas told users “we’re not going anywhere.”]
[Update, Friday, 8:30 p.m. Pacific: President Trump told reporters on Air Force One tonight that he plans to ban TikTok, and doesn’t support a sale to Microsoft.]
Microsoft is in talks with the owner of TikTok to purchase the U.S. operations of the popular social video app, according to reports Friday afternoon by Bloomberg News and the New York Times, each citing an unnamed person familiar with the matter.
The reports come amid growing national security concerns, as President Donald Trump considers an order that would force the company’s owner, China-based ByteDance, to divest TikTok’s U.S. operations and assets, according to Bloomberg.
U.S. officials are concerned that TikTok may provide data on its users to the Chinese government, which TikTok denies. Kevin Mayer, a longtime Walt Disney executive, was named CEO of TikTok and chief operating officer of ByteDance in May. TikTok has 1,500 U.S. employees.
“We’re looking at TikTok. We may be banning TikTok,” Trump told reporters today. “We may be doing some other things; there are a couple of options, but a lot of things are happening, so we’ll see what happens. But we are looking at a lot of alternatives with respect to TikTok.”
A Microsoft spokesperson declined to comment on the reports in response to GeekWire’s inquiry.
Microsoft made 15 acquisitions for a total amount of $2.4 billion in its 2020 fiscal year, according to its annual Form 10-K filing on Friday morning. That was down from 20 acquisitions for a total of $9 billion the year before, which included the $7.5 billion acquisition of GitHub.
The company’s biggest acquisition on record was its $26.2 billion purchase of LinkedIn in December 2016, in Microsoft’s 2017 fiscal year.
As exemplified by the GitHub and LinkedIn acquisitions, Microsoft has followed the popular trend among tech giants of allowing high-profile companies to operate relatively autonomously after they’re acquired, maintaining their own organizational structures, offices, products and services.
It isn’t clear whether TikTok would follow that same pattern as part of Microsoft — if a deal were to happen. The New York Times cautions that the stage of Microsoft’s TikTok talks isn’t known.
Microsoft had $136.6 billion in cash and short-term investments as of June 30.
