TikTok on the Clock, but Microsoft’s Not Letting the Party Stop
We cannot live without content. It’s true! We have been consuming it for years, even if you think the internet hasn’t been there long. Content has been there in the form of plays, books, puppet shows, movies. It’s just that over time, our patience became even more limited. The birth of this impatience led to TikTok, a social media platform delivering bite-sized video content.
With so much hate, so much love and an insanely large user base — TikTok took the social media world by storm, but unfortunately, its reign ended recently. It wasn’t the cringe content that led to its burnout. It was the consequences of being a Chinese company with certain apprehensions about National Security from the government of India, losing its largest viewership of Indians who made hilarious crying TikToks about kandha (onion) prices.
Now, even though Gen Z is unhappy with this huge move and showcased their unhappiness on PM Modi’s Instagram posts, TikTok has not yet been revived in India. Seeing this ballsy move, Trump has also announced the move to ban the platform.
Enter Microsoft.
The 30+-year-old tech giant has emerged to be the saving grace for TikTok in the US and is in talks to acquire the company. Trump, in a veeeery unbiased way, informed ByteDance, the parent company of TikTok that if a deal is struck in 45 days, it shan’t be banned.
You know, to be honest, when I read about this deal, I thought it was like my 55-year-old aunt trying to wear an off-shoulder hot pink top — it just doesn’t go together. I mean a majority of Gen Z-ers, think of Microsoft as an “old” company. Barely any of us even knew Microsoft had physical stores, let alone they were closing the doors on all of them! Microsoft is known as a company aimed at “productivity” — which is everything TikTok is well…not. The social media platform just does not go with the brand image of this legendary company.
Also, owning a social media company is a PAIN. The number of compliance issues, terms and conditions, the hate, the extremist & offensive content — I mean, all this should be enough to worry Satya Nadella.
Not to forget, the very recent big tech hearing featuring the CEOs of Apple, Amazon, Facebook and Google on allegations of anticompetitive behaviour which ranged from Amazon’s use of third party seller-data to Facebook’s spying on competition (wonder how they got out of that one haaaan). Which leads to the question — why does Microsoft want to join this league of public and political scrutiny? (Although I would love to see a Zuckerberg-like meme on Satya Nadella.)
Because there’s a bigger trade-off here! Tiktok officially has 800 million monthly active users right now. (emphasis on officially…) and close to half of their user base is from the 18–24 year age group. It’s a freaking gold mine for Microsoft.
Okay, just in case someone reading this does not know why TikTok has done so phenomenally well — it’s because of its algorithm. TikTok is not the first to venture into bite-size videos, but it’s the first one to understand what the users want. It is the driving force behind its success as it predicts what the viewer wants to see, making them spend hours and hours scrolling through mindless content. So you have the perfect mix here for a social media platform to be successful — an amazing algorithm, creative content, a large user base that spends as much time on it as possible, making it a great possibility for advertising. But, it also gives TikTok something equivalent to the infinity stones — DATA.
With the Big 4 Tech companies ready to rev their AI engines with the data they have from their platforms as their fuel, Microsoft hasn’t had the best luck in this case. To be able to catch up to these companies, acquiring TikTok would allow them to gain insights for all its AI hopes and dreams.
Microsoft will have the ability to understand things like — what makes a song go viral? What pop culture phenomenon does exceedingly well? What kind of challenges performs better than others? And the list goes on and on.. Training their AI with this data would allow it to create models which can lead to some brilliant AI systems. Noah Goodman, a professor of Natural and Artificial Intelligence at Stanford, noted that this large amount of video data can even train a computer to lip read.
Now originally, Nadella wanted to purchase only a part of the operations from ByteDance — USA, Canada, Australia and New Zealand — leaving behind the most important user base from India, Brazil and China, which was obviously a supremely dumb idea. It’s like destroying only 4 out of the 7 Horcruxes, even though logically Microsoft had to limit the deal since only the US has the power to force ByteDance to sell its US holdings and since Australia, Canada and New Zealand are closely aligned with national security matters, they were included as a part of the deal too.
But, in a very recent turn of events, we see that Microsoft does want the entire global operations of TikTok. “All hail Satya Nadella”, Indian Gen Z-ers scream.
However, from a business standpoint, you cannot see this opportunity as “obvious” or a “masterstroke”. At this moment, when you say TikTok, geopolitical issues go hand in hand. From the Indo-Chinese border issues to the “Digital Berlin Wall” Trump wants — ByteDance, the parent company of TikTok, now sees itself as a child in the middle of a divorce. While it is giving Trump whatever he wants in terms of hiring 10,000 employees from the US or a promise to pay American creators $1 billion — ByteDance is laying it all out there, while facing some fire from China.
There has been extreme displeasure from Chinese citizens regarding this move and China has gone on record saying it will not accept “rogue country” United States’ attempts of acquiring TikTok. In an editorial published in state-run China Daily, Beijing said it considered Microsoft’s pursuit of purchasing the company a “theft” of its technology, adding it had “plenty of ways to respond if the administration carries out its planned smash and grab”.
You feel for ByteDance because while there has been no data breach, being a Chinese company will always follow them around like a dark cloud, which is why this Microsoft deal seems so lucrative for them. Microsoft is a legend — its market value topped $1.6 trillion and is flushed with cash and to be honest, it really doesn’t hurt that Microsoft was not invited to the recent Big Tech hearing. But then there’s also the anger you see from China’s side. The company has an extremely large presence in Chinese markets, and if it is seen that Microsoft is cashing in on TikTok, China can easily hurt Microsoft’s business.
It is basically the most complicated Pros and Cons list any business can make.
If you look at the most important aspect of Tiktok, which are the content creators — there is a ticking time bomb. Content creators are now flocking to other platforms. Instagram has introduced its content option through Instagram Reels (of course?? Like what has Instagram not added to its depository of ‘copied’ features). Chingari is being seen as an alternate in India as well. These apps aren’t a major threat because they do not have TikTok’s secret ingredient — the perfect algorithm that allows users to not realize how much time they have wasted.
Microsoft has an opportunity to enter into the Gen Z market, gain revenue through advertising on the social media platform while also acquiring large data to fast track whatever AI ambitions they currently have — all with one acquisition. Microsoft has its foot in the door which can get easily slammed on their faces by China, USA or any other competitors willing to purchase TikTok.
The tech giant’s clock is TikTok-ing as the deal has to be made by September 15th. It’s going to be interesting to see if the Big 4 turns into the Big 5 with this acquisition.
