Microsoft in merger talks with TikTok

August 04, 2020 | 16:03
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Microsoft has retained its ravenous appetite for social networking sites, as reflected by the recent merger talks with Chinese platform TikTok.
microsoft in merger talks with tiktok
An alliance with TikTok could further Microsoft's social network ambitions

The US tech titan seems to not have yielded the battlefield to Facebook after the failure of its social network Soclthree years ago as it has now taken a crack at acquiring one of the most popular platforms – TikTok.

Newswire CNBC stated that Microsoft on August 2 confirmed that it has been negotiating with TikTok’s parent company ByteDance to drive home the acquisition. Accordingly, Microsoft intends to conclude talks by September 15.

While the deal value has not been revealed yet, Microsoft is expected to pay top dollar for the the deal. According to Reuters, the Chinese platform was assessed at $50 billion. Moreover, ByteDance also forecast that TikTok’s revenue this year could reach $1 billion.

Previously, after proving unable to compete with Facebook, Microsoft was forced to close the curtains on Socl after five years of operation. Launched in May 2012, Socl was set apart from Facebook and Google+ through its focus on images – similar to Pinterest. However, at the time, Instagram, a photo and video sharing social network (which was bought in the same year by Facebook), was hugely popular and left little space for Microsoft’s platform.

Indeed, before Socl, the stranglehold of Facebook and Google on the global social network arena has led to numerous players, smaller and larger, to withdraw, including Orkut and OpenSocial (developed by Google).

Notwithstanding, as advertising on social networks has become more popular and immensely profitable – Microsoft cannot stay put and the deal with the billion-dollar TikTok could strengthen its competitiveness in the playground.

In 2007, the US software maker also poured $240 million into Facebook and since then the two have carried out various joint initiatives.

2019 has been a successful year for TikTok with revenue touching $176.9 million, according to market research company Sensor Tower. Specifically, the earnings from iOS and Android users quintupled over-year.

ByteDance launched TikTok outside of mainland China in 2017, following the introduction of a similar platform named Douyin. Last year, ByteDance reported $20 billion in revenue, up 180 per cent on-year.

By Van Anh

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