Twitter Wants to Buy TikTok US Operations, Sources Say
Twitter has approached TikTok's parent company, ByteDance, in their intent to acquire the U.S. operations of the video-sharing app, two sources familiar with the matter told Reuters.
Twitter held early talks about a potential merge with TikTok, the that the Trump administration has declared a national-security threat.
The potential Twitter-TikTok combination was reported by Dow Jones, citing people who were familiar with the matter.
Wall Street Journal reported that whether the San Francisco-based Twitter will push through. Both TikTok and Twitter have declined to comment on the potential deal.
TikTok said it does not comment on "market rumors."
Can Twitter Seal the Deal?
Experts also expressed doubts over Twitter's ability to compete with tech giant Microsoft Corp., or other potential bidders, in closing the deal.
For one, Twitter is a much smaller social media company based in San Francisco. But then, it may not face the same level of antitrust scrutiny that Microsoft is having, Bloomberg noted.
Twitter's market capitalization is at about $29 billion, it is way smaller than what Microsoft is having at more than $.16 trillion. If they do plan to acquire the U.S. operations of TikTok, they will need help from other investors, said Dow Jones.
Twitter does count the private-equity firm Silver Lake as one of its investors, though.
Jack Dorsey, the CEO of Twitter, had once tried to do short-from video sharing and failed. It shuts down the then-popular Vine app in 2016, four years after it was acquired. They did so in an effort to cut costs.
Twitter also gathered heat from President Trump when they were accused of unfair censoring.
Both Twitter and Facebook blocked a video shared by accounts linked to Trump due to the policies on coronavirus misinformation.
Who's Leading in the TikTok Deals?
TikTok was given 45 days to sell for them to stay in the U.S.
On August 2, Microsoft confirmed that it is negotiating a purchase of TikTok's U.S. operations.
It has been talking with ByteDance for weeks and is considered the frontrunner in closing a possible deal, sources said. Even the CEO of Microsoft has spoken with President Donald Trump on the possible deal a week ago.
"Microsoft will move quickly to pursue discussions with TikTok's parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020," the company said in a blog post.
According to reports, TikTok is planning to file a federal lawsuit to challenge Trump's ban of TikTok in the U.S., saying that doing so is not legal.
Last Friday, the app shared a blog post saying it was "shocked" over the ban and would do all possible remedies they can to help with their situation.
How Will Microsoft Address Security Concerns?
The tech giant said it is looking for a "new structure" that TikTok users already love but adds "world-class security, privacy, and digital safety protections."
Microsoft will make sure TikTok's American users aren't having their data transferred and it remains in the United States only. They ensured that data is going to be deleted from servers outside the U.S. after it has been transferred.
Trump also signaled that he expects part of the purchase of TikTok will go to the U.S. Treasury, arguing that the U.S. made the deal possible. There have been no clarifications on how that would work or whether Trump has the legal authority to demand such payments to the government.
Want to read more? Take a look at these!
Microsoft Responds to Planned Acquisition of TikTok After Consulting Trump
Trump Issues an Executive Order Banning the Chinese App TikTok in the US
Twitter Could Face up to $250M Fine for Using Users' Data to Target Ads