The past years have been a boon to the social platforms or rather the digital media industry as whole and with the coming up of the micro and medium businesses, the platforms have provided extraordinary marketing and sales records.
An app that assisted in the process was TikTok, a 30-60 second video platform, the child of Byte Dance, an internet technology company was in the news for controversial reasons like data breaching and hate speech. After India banned the app, the huge user base, which was earlier greater than Facebook, dropped massively.
Read Also: Trump is going to ban TikTok in the US
After two months of the app being banned in India, there was an important development when Microsoft confirmed the intent to buy TikTok. But, why does Microsoft want to buy TikTok, a social media platform majorly for teens? It could be that stodgy software giant’s long-awaited fountain of youth. Keeping in mind that, Microsoft isn’t exactly tech’s most consumer-friendly company as we talk about the doomed products over the years: The social network Socl, The Windows Phone, Groove Music, Mixer streaming service, The Zune digital music player. Therefore, the intent to break out of the Windows desktop, suit-and-tie, 9-5 image to capture more of the consumer market is crystal clear.
Earlier, in 2007 when the company saw the potential for social media, it invested $240 million in Facebook at a $15-billion valuation and even offered to buy Mark Zuckerberg’s company outright. Acquiring TikTok would unveil a major platform to rival Facebook and Google-owned YouTube. And it could remake its image with young people as it is quickly emerging as a potent competitor to Snapchat, Facebook, and Facebook-owned Instagram, says eMarketer analyst Debra Aho Williamson.
Users have the same question. Does Microsoft want your data too?
Yes, Microsoft wants your data too. Perhaps what’s the biggest prize of acquiring Tik Tok? Yes, the massive amount of data, and what kind of data are we talking about? Your location, times you are on the app, the time of day you consume certain genres or content majorly called as the behavioral data, you ‘teach’ the algorithm exactly what you love, what you hate, what engages you and what you will ignore,” said Shelly Palmer, CEO at The Palmer Group, a tech strategy advisory group.
The data that could be used by Microsoft for building Software and Hardware projects and not just Xbox and would give them a deep understanding and insights into consumer behavior and a real hook into young people who are being taught on Chromebooks and other Google products in classrooms and scrolling through Snapchat and Facebook-owned Instagram in their spare time.
As Microsoft ensured, protection of data which was the biggest selling point to the Trump Administration, which was concerned about TikTok’s ties to the Chinese government. Whereas, while TikTok testified to the Indian Government, it denied all allegations of supplying user data to Beijing.
“Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States,” Microsoft said. The United States of America not only is afraid of the data breaching but the technological dominance the app would cast as said by Michael Priem, founder and CEO at Modern Impact, an advertising technology firm Minneapolis
What else is in it for Microsoft?
Advertising dollars, TikTok, the youngest-skewing of the social media networks would boost Microsoft’s share of the U.S. digital display ad market. This year, eMarketer predicts Microsoft to hold just 1.5% of that market, slightly ahead of Snapchat but well behind Facebook’s 42% and Google’s 10.4%.
From an advertising business standpoint, the value of TikTok to Microsoft could potentially be very large, but I want to emphasize that it’s just potential at this point,” eMarketer’s Williamson said.
The Trump administration will wait until 15th Sept to decide on any action as the soft spot continues to enlarge as Microsoft arrives close to buy Tik Tok.
The deal could be especially beneficial for Microsoft because the TikTok business in the U.S. is valued in the $40-billion range but could eventually reach $200 billion if it makes the right moves. And Microsoft could get TikTok action in other international regions as part of the deal, Ives says.
But nothing is set in stone as TikTok leaves the door open for negotiations with other potential buyers.
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