With the potential ban on Chinese owned social media app TikTok fast approaching in the US, it is believed that Microsoft thinks it has a good chance of swooping in and acquiring TikTok from Chinese tech company ByteDance. US President Donald Trump had, last week, issued orders banning TikTok and instant messaging app WeChat from operating in 45 days in the country, if they are not sold by Chinese parent companies. Now Microsoft co-founder Bill Gates has leaned in on this development and believes any potential deal to acquire TikTok is akin to a “poisoned chalice”. This comes after Microsoft confirmed it was going ahead with negotiations and is reported that Microsoft CEO Satya Nadella had personally spoken with President Trump on the matter.
Bill Gates, who had warned the world quite early about the possible impact of the Coronavirus pandemic and how ill-prepared we all were to deal with COVID, is taking an active role in the development of vaccines. Gates, who is also technology advisor at Microsoft, isn’t at all happy about the TikTok development. In an interview with Wired, he is as confused as the rest of us about the possible contours of the deal, if it at all works out. “Who knows what’s going to happen with that deal. But yes, it’s a poison chalice. Being big in the social media business is no simple game, like the encryption issue,” he says. He also minces no words when he says it is “bizarre” that Trump has killed off the competition in the social media space.
“I agree that the principle this is proceeding on is singly strange. The cut thing, that’s doubly strange. Anyway, Microsoft will have to deal with all of that,” adds Gates.
One of the primary reasons why Microsoft believes TikTok is an investment worth doing is it will get a readymade product in the social media space. The closest Microsoft right now is to that space is with LinkedIn, a professional network. Yet, it is no match for the might of Facebook, the Facebook owned Instagram and even Twitter and Snapchat.
Yet, Microsoft’s consumer-focused forays haven’t always worked out well, considering its prowess in the enterprise space. Windows Phone, Groove Music, the Microsoft Band fitness accessory are some examples, of when things haven’t worked out. Cortana, the virtual assistant, seems to be going down that path—the app for Android and iOS will be shut down next year, along with Cortana access for Harman Kardon Invoke smart speakers and the first-generation Microsoft Surface headphones. Cortana instead is getting deeper integration within the Outlook email app and Teams video meeting app, which have great enterprise significance. At the same time, the part consumer plays, that have included the Surface computing device line-up and the revamped Microsoft 365 subscriptions, in the end, do plug into the enterprise space very nicely.
Microsoft is also in a safe spot as far as regulators are concerned. While Facebook, Google, Apple and Amazon are all very much under scrutiny by the US Congress, Microsoft hasn’t been dragged into it just yet because of its business and enterprise focus—and that gives the company the much needed-breathing space to pursue the TikTok deal.
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