The TikTok US Bid: Summarized, Simplified.
For all those fellow enthusiasts who feel lost in the mammoth coverage of TikTok US, I’m here to help.
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Over the past few months, it’s truly seemed like I’ve been surrounded by TikTok despite not even having the app on the phone! For all those who feel as surrounded as me, but still have no idea what on earth is going on, here’s the 411:
Well, TikTok is currently still in motion to sell its US operations (and not the entire enterprise as widely believed), to potential bidders in the country. This is happening post the infamous executive order passed on August 06 by President Trump that ordered a block on all transactions with ByteDance (TikTok’s mom) giving the company a 45-day deadline to do so.
This was done because the Trump administration believes that “There is credible evidence that leads (them) to believe that ByteDance … might take action that threatens to impair the national security of the United States,” i.e. the company could share information about ‘Americans’ with the Chinese government.
ByteDance, however, refuses that it does.
There is credible evidence that leads (them) to believe that ByteDance … might take action that threatens to impair the national security of the United States
This announcement was preceded as well as succeeded by numerous rumours of all possible tech companies on the land of the United States of America having intentions of acquiring TikTok’s US Ops. Soon enough I concluded that the game had 4 main players who were as serious as Joey is about his fries.
Namely: Microsoft, Twitter, Oracle & Walmart.
Main Players & Their Motivations:
MICROSOFT: At the very beginning I read those top White House advisers argued the merits of purchase by Microsoft to Mr Trump including the risk of angering TikTok’s young user base with a shutdown in the run-up to the election. New York times revealed interesting details in its article where it says that Microsoft (was) interested only in TikTok’s businesses in the U.S., Australia, Canada and New Zealand, and (would’ve) invited other “American investors” to take minority stakes.
While the move was lauded since its takeover of TikTok would give the tech giant “control of one of the largest and most influential social networks in the country,”, it was argued that unlike Facebook & Alphabet.inc, that have experience in dealing with user behaviour on social media (undesirable content, hate-speech, reported content etc), Microsoft’s speciality lies in “serving its business customers”. There has also been talk that TikTok being an endless pit of user data, would’ve served as an interesting source for Microsoft to train its AI.
As of September 14, 2020, ByteDance is said to have rejected Microsoft’s bid.
Unlike Facebook & Alphabet.inc, that have experience in dealing with user behaviour on social media (undesirable content, hate-speech, reported content etc), Microsoft’s speciality lies in “serving its business customers”.
WALMART: has an equally interesting reason to bid while partnering with Microsoft for it. Looking at the Chinese e-commerce market, it's quite evident that Social Commerce is transformative to businesses in the space (Douyin, TCEHY etc). Walmart wants a piece of that pie too. As CNN covers, in China, (users) tune into live streams of influencers peddling everything from makeup to furniture. They can ask influencers about products and get responses in real time, or they can click on steep discounts that are offered only in the apps.
Walmart admitted that its interest in the app stems from the way it has “integrated e-commerce and advertising capabilities in other markets,” and added that TikTok could bolster Walmart’s access to consumers.
It is still interested in the bid despite Microsoft’s rejection.
ORACLE has its own unique journey going on that included support from President Trump since their founder Larry Ellison is a vocal Trump supporter and CEO Safra Catz has donated to the President’s reelection campaign.
Oracle’s announcement was on the weirder side in terms of how it was received by the general public. What even is Oracle? In simple words, it provides large enterprises solutions to manage their extensive data and automate its management. Why would it need TikTok? Well, Oracle makes money off of data. “Earlier in this pandemic, the enterprise data provider teamed up with Zoom. If Oracle were to bring the same kind of partnership to fruition with TikTok, it would have landed a huge client, boosting its usage by up to 10%” says Tech Crunch.
As of September 14, Oracle put out a release saying that it is indeed party to an agreement in which it would partner with TikTok, and that the proposal had been submitted to the US government.
If Oracle were to bring the same kind of partnership to fruition with TikTok, it would have landed a huge client, boosting its usage by up to 10%.
TWITTER: Oh, poor Twitter. There are two schools of thought on it. On one hand, it gets so much flack for the backstabbing it did with Vine that netizens can’t bear to think what massacre it’ll do with TikTok in the US. On the other, we’re justifying its endeavour quoting what Google (now, Alphabet Inc.) did with Google Video which failed and was reincarnated soon after in the form of something we call “YouTube”.
I love how Barrons puts it.
Twitter’s pursuit of a TikTok acquisition could solve three problems for the company at once: calming activist shareholders, jump-starting its failed video social networking efforts, and giving the company a member base that crosses a broader swath of the U.S. population.
Washington Post also rationalizes that “It would be easy to dismiss the idea because Twitter is too small, with a market cap of just $29 billion, compared with valuations for TikTok that extend as high as $50 billion. I’ve already written that TikTok, especially the slice of it Microsoft is bidding for, is worth nowhere near that.”
IMPORTANT UPDATE [Source]:
The Chinese government has also put new restrictions on the export of artificial intelligence know-how from China, including the personalized recommendations that lie at the heart of TikTok’s addictiveness.
A deal without TikTok’s algorithms, as Tim Culpan @ Bloomberg puts it, “would be like buying KFC without its 11 secret herbs and spices.”
This was a short summary of what’s happened at TikTok! I hope it was informative and helpful! And for those of you who’ve watched The Social Dilemma and are now in one yourself, let’s start a support club. Comment below to join ⬇️
Also, stay in touch!
Here’s an interesting POV on the subject if you want!
