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Microsoft to continue talks to buy TikTok from ByteDance after Trump call

Software maker intends to complete the deal by September 15 and is expected to invite other US investors to participate

Microsoft chief executive Satya Nadella addresses the company's annual conference for software developers in Seattle. The company is in discussions to buy TikTok's US business. AP
Microsoft chief executive Satya Nadella addresses the company's annual conference for software developers in Seattle. The company is in discussions to buy TikTok's US business. AP

Microsoft said it will continue discussions to buy TikTok’s business in the US after its chief executive Satya Nadella held talks with US President Donald Trump on Sunday.

Mr Trump, who faced pressure from some of his advisers and members of the Republican party, gave the US technology company and ByteDance, TikTok's Chinese parent company, 45 days to seal the deal, according to Reuters.

TikTok, which is popular with young audiences for its short-form videos, has about one billion users worldwide.

Microsoft said it intends to complete the acquisition by September 15 and expects to invite other US investors to come in as minority stakeholders.

“Microsoft fully appreciates the importance of addressing the president’s concerns,” the Redmond-based firm said in a statement, adding that it is committed to "acquiring TikTok subject to a complete security review and providing proper economic benefits to the US".

It, however, said the discussions were “preliminary and there can be no assurance that a transaction will proceed”.

“We do not intend to provide further updates until there is a definitive outcome to our discussions,” Microsoft said.

The acquisition would result in Microsoft, the world's largest software company, owning and operating TikTok in the US, Canada, Australia and New Zealand.

Mr Trump revealed his plans to ban the social media app within the US last Friday after American officials and politicians expressed security concerns in recent weeks that it was being used by Beijing for nefarious purposes.

TikTok, however, denied having links to the Chinese government.

Microsoft pledged to strengthen the security and privacy of the app once it acquires it.

“The operating model for the service would be built to ensure transparency to users, as well as appropriate security oversight by governments,” it said.

“This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy and digital safety protections.”

The software maker said it would ensure that the private data of the app's American users is transferred to the US.

“To the extent that any such data is currently stored or backed-up outside the US, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred,” the company said.

It, however, did not disclose the expected value of the deal.

The acquisition would help Microsoft reinvigorate its advertising business through a huge supply of video content.

FILE PHOTO: China and U.S. flags are seen near a TikTok logo in this illustration picture taken July 16, 2020. REUTERS/Florence Lo/Illustration/File Photo
TikTok, which is popular with young audiences, has more than one billion users worldwide. Reuters

The company, whose advertising-backed businesses including the Bing search engine, MSN news service and LinkedIn, disclosed last month that its search advertisement sales grew by 1 per cent to $7.7 billion (Dh28.3bn) over the past year.

Microsoft purchased LinkedIn for $26.2bn in 2016.

TikTok, which was launched in China in 2016, was released in the US in 2018 after ByteDance’s purchase of lip-synching app Musical.ly.

It said it had hired about 1,000 people in the US this year and plans to hire another 10,000.

Updated: August 4, 2020 02:04 AM

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