TikTok Sale: What Does Microsoft Want?

Bloomberg

The artificial-intelligence software used in TikTok scans videos posted for substance, form, and meaning, and uses that material to recommend more. You don’t have to search for people you are interested and follow. Instead, you download it, watch a few videos, and TikTok starts recommending more. And the recommendations are surprisingly effective.

Trump has given Microsoft 45 days (by September 15) to seal a TikTok deal. Microsoft might be pursuing TikTok’s global operations, and Trump has signed an executive order to block all U.S. transactions with ByteDance (and Tencent) starting September 20.

Microsoft’s acquisition of TikTok may look unusual. Microsoft is about productivity, not entertainment. Its experience with consumer businesses is mixed, the successful stewardship of TikTok is not assured — think of the search engine Bing or the takeover of Nokia’s smartphone business, both ended in failure.

Young people are now growing up in an environment dominated by Android, iOS and Chromebooks in classrooms. With Google Docs, it is possible to grow up without needing any Microsoft software or services. TikTok gives Microsoft a connection to millions of youngsters. Like how Microsoft used Xbox Live to fuel parts of the company’s research for future projects. TikTok could help correct a Microsoft blind spot and even change how its other software and services are developed.

The other tech giants already have social data to train their AI algorithms on — Amazon has Twitch, Google has YouTube, and Facebook has multiple social apps where users post video content. A transformative Microsoft-TikTok tie up could help create meaningful competitive position, leveraging other Microsoft brands like LinkedIn, Minecraft and Xbox.

Microsoft once teamed up with News Corporation and NBC Universal back in 2006 to launch its Soapbox on MSN Video service. It failed against YouTube and was shut down a few years later, leaving Microsoft to adopt YouTube as the primary way it shares its own videos. Microsoft also experimented with its own social network, Socl, back in 2012 before shutting that down five years later. And now the company is planning to acquire TikTok.

What do you think? Is the acquisition worth the risk?

Reference:

1.     What Would Microsoft Do With TikTok? August 3, The New York Times

2.     Emil Protalinski, ProBeat: Microsoft wants TikTok for the same reason the U.S. fears China https://venturebeat.com/

3.     Tom Warren, Why Microsoft Wants Tiktok https://www.theverge.com/