The Tick Tock on Tik Tok
TikTok’s parent company ByteDance is reportedly close to a deal to sell its U.S. business. It’s a high-stakes negotiation, with a purchase price that will likely be in the tens of billions of dollars. It’s also possible that ByteDance could choose not to sell at all, forcing a showdown with the U.S. Government.
The geopolitical implications of this are significant, but I’m also interested in what it says about the battle for consumer attention. Microsoft seems to be the leading contender, and while they have been wildly successful over the past 20 years in the enterprise space, they generally (excluding XBox and to a degree, LinkedIn) have not been a major player in the battle for consumer attention. Remember the dominant position of Internet Explorer? It now has less than 6% market share on desktops. And Bill Gates himself said his greatest mistake ever was in allowing Android mobile operating system to become what Microsoft’s mobile operating system should have been.
This is an international story, and I had the opportunity to join anchors on Canada’s Business News Network and Al Jazeera to discuss what’s going on. Some of the topics we covered:
- There aren’t a lot of situations that make Microsoft look like a “warm & fuzzy” company — but buying Tik Tok from a Chinese-owned company is one of them. The reasons we find ourselves in this place are remarkable, but I’m focused less on the geopolitics than on what it says about the battle for consumer attention.
- Instagram (owned by Facebook) launched its Reels product to compete with Tik Tok. But copying a successful application involves more than just replicating its features. It will be a long road for the competition, unless somehow a deal can’t be reached and Tik Tok is removed from the Apple and Google app stores.
- Facebook can indeed try to copy Tik Tok. But if every matched feature comes paired with an invitation to Mark Zuckerberg to testify in front of Congress, how willing will they be to keep copying features?
- I really like this move, as given the current political climate, Tik Tok urgently needs a new home. Microsoft is a $1.6 Trillion (market cap) giant, and Tik Tok will not be relegated to the kids’ table when going up against Facebook, Google, and other tech titans.
Since those interviews aired, TikTok’s CEO resigned; Microsoft has enlisted Walmart as a potential partner; and both Oracle and Twitter have joined the mix. All while the clock is ticking as a result of the President’s Executive Order.
Oracle (where I worked for a year, after they acquired a previous company) certainly has the deep pockets to make a successful bid, but it’s hard for me to get my mind around how they would successfully run a giant consumer business. Twitter could be a great fit, but it’s hard for me to get my mind around how they can afford the likely price tag of this acquisition.
People like to talk about “FAANG” stocks — short for Facebook, Apple, Amazon, Netflix, and Google. Regardless of how it plays out (FAMANG? FOANAG? FATANG?), I suspect we’ll be talking about this deal, and how it altered the landscape of companies competing for consumer attention, for years to come.
