Twitter is in the mix with Microsoft to acquire the mega-popular video app, as the clock is ticking on the September 15 deadline of a mandatory TikTok sale.
Shortform video app TikTok, which has seemingly destigmatized the deservedly very stigmatized portrait mode in smartphone video, has to sell off its US business by September 15, after President Trump’s executive order last week (which also covers the popular Chinese messaging app WeChat). Trump’s suspicion may be justified, there are legitimate Chinese state surveillance concerns with the app’s Beijing-based parent company ByteDance. And the lack of political pushback against the unusual ban of a tech product means the sale is almost certainly happening, with Microsoft as the leading contender for the winning bid, according to CNBC.
Not so fast, Clippy. Early Monday, BBC News reported that San Francisco-based Twitter has “approached” TikTok about a US sale, building on some Wall Street Journal reporting that dropped Saturday night.
“Twitter Inc. has had preliminary talks about a potential combination with TikTok, the popular video-sharing app that the Trump administration has declared a national-security threat due to its Chinese ownership,” the Journal reported over the weekend. “A deal would involve TikTok’s U.S. operations, the people said.”
That’s one major difference — Twitter’s TikTok deal would only buy up the U.S. operations, while the Microsoft proposal would also buy TikTok’s operations in Canada, Australia and New Zealand as well, according to a KPIX/CNN report. Of course, another major difference is Microsoft’s $1.7 trillion value, compared to Twitter’s “much smaller” $29 billion. But the TikTok tool is certainly a better fit for Twitter, the platform where these videos are so frequently posted, whereas Microsoft’s current incarnation is more of a business-to-business company with a few niche consumer products like Xbox and LinkedIn.
There's also something important to note in Twitter's acquisition history: The company already owned a short-form video platform, Vine, which it summarily shut down in 2016 as creators fled for apps with more features and more money-making potential, and as Snapchat's 10-second videos became the go-to place for the kids to share clips from their lives. (Also, Twitter had enough to deal with in its core business in 2016 to worry about fixing or improving Vine.)
Much of the analysts’ discussion of these potential deals revolves around content moderation challenges Microsoft or Twitter would face with the platform, particularly in the wake of news that QAnon’s conspiracy theory about child trafficking involving Wayfair’s furniture spread like wildfire on TikTok. But this seems like an odd concern.
Pretty much no tech company has ever really been held accountable for their spectacular failures at content moderation, and YouTube is rather notorious for monetizing hate videos, so there is not penalty for tech companies who can’t or won’t moderate content. The real sticking issue here may be Trump’s demand that the U.S. Treasury get a "very substantial portion" of the proceeds of any sale, which means whoever wins the TikTok sweepstakes will probably have to close the deal on a Trump golf course, at a Trump resort, and contingent on the additional purchase of a semi-truck full of Trump steaks.
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Image: Sarah Cooper via TikTok