Spring has been an era of explosive expansion for TikTok, but summer is becoming a season of discontent for The Chinese social media giant.
The video-sharing app saw its popularity explode during the global pandemic, fed by content-hungry teenagers around the world looking for something to do while locked in their homes. But now, TikTok has gone from a harmlessly entertaining diversion for millions of homebound consumers to a digital pariah increasingly eyed with suspicion and banned by governments and private companies worldwide as a potential security threat.
The European Union first sounded the alarm with an investigation in June. India then banned TikTok and dozens of other Chinese programs from its smartphone networks, raising considerations about “data sovereignty.” And more recently, U.S. President Donald Trump announced that U.S. citizens and businesses may stop doing business with ByteDance, TikTok’s parent company in China starting September 15.
It appears that TikTok may be leaving the United States unless it can succeed in an agreement with Microsoft or some other U.S. customer for its U.S. operations, eliminating Washington’s security concerns.
However, Microsoft, which generally focuses on enterprise software, faces a complex and competitive situation if you need to own TikTok’s U.S. operations. For workers, Twitter seems to be a imaginable TikTok customer of choice, and the hypothesis is increasingly shifting to other potential bidders, Netflix being one of the favorites.
Meanwhile, other social media corporations aim to attract the TikTok audience instead of buying the company.
Think about Facebook. You don’t need to buy TikTok, and given the existing temperament of lawmakers towards the company, it’s unlikely that Facebook can get government approval anyway.
But that doesn’t mean the social media giant won’t make a grab for TikTok users while the Chinese company’s ownership is up in the air. Facebook’s new Instagram Reels app — widely seen as a TikTok rip-off — seems designed to do just that.
Let’s see who can be the winner by purchasing the American branch of the company, and whether a TikTok 2.0 would work as well as the existing edition that millions of American teens know and love.
Microsoft – TikTok: a knowledge adjustment made in paradise
Given Microsoft’s complicated history with customer products, the Groove Music service, the Zune MP3 player and the Windows phone, to name a few more impressive, the company’s possible acquisition of TikTok has surprised many observers. They wonder what Microsoft is going to do with the world’s first expanding social media service, or why Microsoft would need it anyway.
The “why” responds in one word: data. What TikTok Microsoft offers is a window for creating products for consumers and services. It presses for Microsoft in the era of mobile telephony, where the company completely exploited mobile telephony and continued to reach players like Apple and Google.
In addition, TikTok would give Microsoft an endpoint with millions of young consumers around the world; the maximum maximum for others will probably not connect to Microsoft Office products. Microsoft would also have simple access to the world of cellular social media and a captive with which to advertise products such as Surface and Xbox tablets, and even create its own streaming gaming platform.
But integrating TikTok into Microsoft’s global products and installations would be a technical challenge, especially when it comes to integrating the privacy protections that regulators have lately lack around global concern. Chances are Microsoft will ask for a one-year grace era to put the transition into effect, some executives wonder if it can take several years.
Tweet-Tock?
If Microsoft fails to reach an agreement, Twitter has already had initial talks with TikTok to offer a competitive offering, according to the Wall Street Journal (WSJ).
Given its prestige as a leading social media platform, Twitter would more naturally adapt to TikTok’s user base, many of which are already Twitter users. Such an agreement would also gain advantages from the fact that Twitter is smaller than Microsoft, so acquiring the US branch of TikTok would likely cause fewer antitrust alarms, the resources told WSJ.
But being smaller would also be a disadvantage in the betting round. While there is no exact figure that can be held publicly about what ByteDance will need for the US TikTok branch, the WSJ said there was a broad agreement that it would be tens of billions of dollars.
WSJ reported that Microsoft has about $136 billion in cash compared to Twitter’s $7.8 billion. Twitter’s market capitalization also exceeds $29 billion compared to Microsoft’s approximately $1.6 trillion. If it is a bidding war, the winner is quite predetermined.
And he’s just winning the race to buy the American branch of TikTok. Maintaining its hundred million U.S. users (out of 800 million worldwide) is important. After all, Facebook sees TikTok as the ultimate serious challenge it has faced on social media for some time, so he puts a lot of effort into Reels.
Facebook: If you can’t buy them, hit them
Given the much-expressed regrets expressed by lawmakers at a hearing on Capitol Hill two weeks ago that U.S. antitrust regulators allowed Facebook to buy Instagram in 2012, it’s not unexpected that the space Zuck built doesn’t even bother trying to try a TikTok purchase.
CEO Mark Zuckerberg and the company can do it, and they’ll probably even face Microsoft in a bidding war if necessary. But antitrust regulators would probably laugh if Facebook proposed such an agreement, so the company probably won’t.
Instead, Facebook has built its own rival — Instagram Reels, a product that works a lot like TikTok. Users can record 15-second clips, sync them with music or audio effects and share them with the world at large or just with a curated list of friends. And Reels doesn’t require adding a new app, as it’s built right into Instagram.
“Reels gives other people new tactics to express themselves, notice more about what they like on Instagram, and help anyone with the ambition of an author to take the lead,” Instagram said in a blog post pinning the launch of the service.
He is already online in the United States and parts of Europe, as well as in India (which, as noted above, banned TikTok last month within the country’s borders). And Facebook is obviously attacking TikTok’s influencer organization. WSJ reported that Instagram presented TikTok’s popular creators with thousands of dollars to transfer to Reels.
Will Instagram Reels succeed? That depends.
Instagram Stories, which is now one of the app’s most popular features, is actually an idea “borrowed” from Snapchat. But Hobbi — Facebook’s answer to Pinterest — never quite took off.
Which direction will the rollers go? Well, if a Microsoft-owned TikTok faces Facebook on social media, you will be informed that Instagram is a formidable competitor with a well-established base of very firm users. In theory, Twitter might be staying with Facebook in a race for social media innovation, but buying TikTok could be out of Twitter’s reach.
Meanwhile, TikTok said he would go to court to challenge Trump’s order banning American society. Any smart news can also mean that ByteDance may lose interest in promoting the app’s U.S. branch.
All of this is a long way of saying “keep looking.” The race to TikTok’s fate turns out that there are still many twists and turns to “touch” before the stopwatch “ticks” until Trump’s September 15 deadline to ban U.S. enforcement.
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New PYMNTS report: Manual of strategies to prevent financial crime – July 2020
Call it the big tug-of-war. Scammers come together to shape elaborate networked paints that work in sync to initiate account garnishing. Chris Tremont, executive vice president of Radius Bank, tells PYMNTS that monetary establishments (IFs) can beat those highly organized scammers at their own game. In the July 2020 Financial Crime Prevention Guide, Tremont explains how.
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