p>Multiple analysts have described the acquisition as a possible "coup" for Microsoft as a chance to scoop up one of the world's fastest-growing social media platforms at a time when TikTok? may be desperate to make an offer.
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p>"This is a rare deal of a lifetime opportunity with an affordable price that could easily be redeemed," Dan Ives, Wedbush analyst who wrote Monday in a note to investors.
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p>Microsoft claims that it is in talks with Trump about buying TikTok? from its Chinese owner
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p>Microsoft would likely pay 50 billion which is the estimated value of TikTok? as an independent business, in order to purchase the app's operations in the United States of America, Canada, Australia, New Zealand and Australia. News of the possible deal broke on Friday and since the close of business on Thursday, Microsoft's market cap has increased to $80 billion, which is a indication that investors are enthusiastic about the idea.
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p>Ives said that he believes TikTok?'s valuation could hit $200 billion in few years "given the steep user and engagement trajectory of TikTok?." Rishi Jaluria, DA Davidson analyst, said that the potential growth of TikTok? is exponentially due to the rapid growth in social media use during the coronavirus pandemic.
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p>A consumer-focused investment
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p>Microsoft is a longtime leader in the corporate space that has shifted its focus away from services that are geared towards consumers and linked its future success to the growth of its cloud business. Therefore, the TikTok? deal could be an important step into the market for consumers. https://femalewellnessboutique.com/members/damagesound77/activity/134355/ </p>
p>It would add a major name to Microsoft's existing consumer-focused offerings that have had mixed results. While LinkedIn has a growing community of influencers and gaming products Xbox and Minecraft are well-known, Microsoft recently shut down its Mixer game streaming platform. Other Microsoft offerings that were targeted at consumers, such as Bing and the now-defunct Windows Phone haven't been able to achieve success.
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p>"Microsoft is a company that we all know about, however, it's an enterprise software company," Jaluria said. "TikTok? could be a means to help Microsoft can grow their consumer presence, and consumer business."
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p>While the majority of people don't consider dancing teens when they think of enterprise software, bringing in TikTok? could highlight Microsoft's capabilities as a company: If Microsoft is able to button-up concerns over the app's privacy policies and host a rapidly growing social network on its Azure cloud platform, it would underscore the geofencing and security capabilities of the service, Jaluria said.
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p>Will it work?
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p>Despite some failures in the past, many of the acquisitions made by Nadella during his time at Microsoft have been extremely successful.
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p>Jaluria said that Microsoft's acquisition of LinkedIn for $26 billion in 2016 was an "slam-dunk" deal for the company. This was largely due to the fact that the social media platform was given significant autonomy.
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p>"They haven't rebranded ityet, when you visit the website, they don't refer to it LinkedIn by Microsoft or something silly like that ... and LinkedIn provides Microsoft lots of data that they can profit from," Jaluria said, adding that a similar approach could be used with TikTok?.
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p>"As long that they don't alter the core product and let it run according to how (the app's) leadership would like it to I believe it will be a great acquisition," he said.
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p>How TikTok? users are reacting to Trump's possible US ban
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p>But there are risks, too.
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p>As part of the agreement, Microsoft committed to ensuring American users' private data is stored in the United States. Microsoft and TikTok? parent company ByteDance? will require US officials' approval for the deal and may have to make a payment to the US Treasury. In a period of deteriorating relations between China and the US, the purchase of an app developed in China could place Microsoft under more scrutiny.
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p>Microsoft has largely avoided the recent waves of regulatory scrutiny targeted at its Big Tech peers, but that could change if the company acquires a controversial social media app created in China with a huge user base. Peter Navarro, White House trade advisor has suggested that Microsoft "divest its Chinese holdings", in order for it to be allowed to purchase TikTok?. He spoke with CNN's Jim Scuitto Monday.
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p>Jaluria said that "I do not believe there will be significant antitrust scrutiny of this deal, because Microsoft does not have any presence on consumer social media." "But after the launch of TikTok?, Microsoft could find itself in the crosshairs because they'd have a business where they're leveraging data. This is the issue that people are to be concerned about with Facebook and Google - using data to advertise."
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p>And then there's the question of whether the burgeoning success of TikTok? is actually long-term sustainable.
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p>Wedbush's Ives said that If TikTok? proves to become the next Instagram (and is able to withstand the competition that is coming from a Facebook-owned competitor) the deal will be a win-win.
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p>"However in the event that TikTok? becomes the next Snapchat and faces a myriad of user growth and monetization issues in the future this acquisition could reduce the value over time, given the huge competition from Facebook and other companies," he said.
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