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Microsoft is reportedly in talks to buy TikTok

According to the New York Times, Microsoft is reportedly in talks to buy TikTok. This comes after President Trump and the White House administration have been looking into shutting down the company in the United States. The Final Round panel discusses the details.

Video Transcript

MYLES UDLAND: All right, let's get to the late breaking headlines here on everything happening in the tech space involving the only major tech name that was not in the spotlight this week, and that is Microsoft. "The New York Times" is now reporting that Microsoft is in talks to acquire TikTok, and this coming just hours after several headlines from the president suggesting that Trump could look at shutting down TikTok or forcing ByteDance, their Chinese parent company, to spin them off.

And I-- I think there's all kinds of confusion right now, Dan Roberts, about what this might mean, how much-- how many teeth there are to this report that Microsoft is interested. But it certainly seems that TikTok, something has to happen, right? There can't be this much smoke without any kind of fire eventually being ignited for TikTok to, I don't know, go public, get acquired. But it would seem separation from their Chinese parent company is imminent at some point.

DAN ROBERTS: Yeah, I agree. And-- and putting aside the new Microsoft wrinkle for a second, this has been such an interesting saga, because in many ways, I think the-- the tail wagged the dog, so to speak. And what I mean is that the media and press cycle around this actually, I think, is what forced Trump's hand. If you remember, all of the statements that-- that we were picking over three weeks ago-- and, boy, this moved fast-- the statements from Pompeo and then the statements from Trump, those officials weren't bringing up TikTok on their own.

They were asked the question. They were asked, are you looking at TikTok? And Pompeo and Trump basically said, yes, we're looking at it. And now here you have still-- the most recent from Trump was, yes, we're-- we're considering banning it. We're looking at banning it. We're going to announce soon the possibility of banning it. And now, of course, the news a couple hours ago before this new Microsoft development was just that the administration is likely to announce imminently that it will force ByteDance to sell it off. Well, that's different from banning it.

That is not a US ban. And in fact, if anything, if ByteDance is allowed to sell it off or allowed to spin it off and then, you know, TikTok does its own thing, you would think that there might not even be a downtime in which US users can't use TikTok. I mean, there probably isn't even going to be a-- a day of not being able to use the app if the company is able to just say, OK, we have completed the process. Now it's-- it's not under our umbrella. Now, the Microsoft development is also interesting because I think what a lot of people expected over the last couple of weeks was that the inevitable next step is a TikTok IPO, a TikTok US IPO.

And if Microsoft swoops in and gets to buy it, well, that doesn't happen. And then that's not even to mention, remember the very strange Amazon saga, with Amazon sending a very real email to almost all of its employees saying, delete TikTok from your phones immediately. And by the end of the day, after everyone had written about and talked about that to death, Amazon said only, that email was sent in error. And everyone thinks there's more to the story there, and-- and what more could there be?

Either someone at TikTok or ByteDance got to people very high up at Amazon and said, oh, no, no, please don't ban. Please don't ban. We're working on it. We're going to fix our security issues. Or who knows what conspiracy theories? I've heard the theory that someone in IT at Amazon sent that email, you know, without authorization, someone who wanted to, you know, embarrass the Chinese owners of TikTok. Who knows what happened?

But, boy, Microsoft buying it, of all companies, will be quite an interesting final result here, especially amidst a week in which we had the tech hearings when the topic was antitrust, and we're hearing about the possibility still of breaking up Facebook by retroactively removing, you know, making it sell off things that Facebook already bought. Now, of course, I don't think anyone on this panel right now expects that's going to happen. But, oh, the irony is, we discussed the possible breakup of big tech, and then to bring in Microsoft, which was already, in the past, broken up. It's just funny that-- boy, I don't think Microsoft is the potential buyer any of us would have chosen here, right?

MELODY HAHM: Well, I would have to disagree, Dan, because in some ways, because of the antitrust hearing yesterday where Mark Zuckerberg was struggling to come up with competitors that are actually behemoths in the way that Facebook is in the social media space, now he can point fingers, right? When you look at the possible opportunity out of all of the FAANG names, [INAUDIBLE] names, I do feel like Microsoft is actually-- it makes the most sense from a potential non-- you know, ability to claim that it is still creating a competitive atmosphere.

Because let's be clear, Microsoft does not operate in the social space at all. We know that they had acquired Skype. Skype is very much defunct during this period of time, even though Skype was an early mover. You would think that Skype would be the platform of choice for people during this work from home period, but we can clearly say that it's not. And then just one other point here, we did reach out to TikTok and Microsoft from Yahoo Finance. We have not heard comment from either of those companies, unsurprisingly I would say, as things are moving quite quickly.

But we did see Snap stock pop momentarily after that report from Bloomberg because this idea that there could be fewer players in-- in this sort of dominant space. And I-- I just think it's so fascinating because even the Committee on Foreign Investment in the United States late last year had started this investigation, right? So we're talking about this story that was already laid out that there was going to be some scrutiny. But as TikTok has gotten more explosive over the coronavirus period, now people actually seem to care, or to, Dan and Myles, your points, that media's intense scrutiny has only exacerbated this existing investigation and the existing storyline for anyone who was following tech at all.

MYLES UDLAND: I'll just-- I'll be-- I'll be shocked if Microsoft buys LinkedIn. I-- I just think-- I mean, I know that it's--

[INTERPOSING VOICES]

We were talking about LinkedIn and Slack. If Microsoft buys TikTok-- it already owns LinkedIn-- i'll just be shocked. Because I think the path for TikTok most likely is that they will be independent in some sort. And the reason why we should think that is Kevin Mayer didn't leave Disney to go run a company that's going to get bought up by another big company. He left Disney to run TikTok because he's going to be the CEO or wants to be the CEO of a publicly traded company here in the US. And even before all this noise about, you know, Trump doing-- want to do this, that, the other, TikTok's most likely path, in my view, was probably to be a public company listed in the US, with Kevin Mayer running that business.

DAN ROBERTS: I-- I agree with that. Or at least if it is someone that buys it, I still see Microsoft as a-- a strange bedfellow because not much of a recent demonstrated history of successfully handling an app like TikTok. You know, that, again, because of everything we're talking about with antitrust, you know, I don't see how a Facebook could get away with buying it. I don't see how a Google, which owns YouTube, could get away with buying it. And-- and if it were a Google, they'd probably just wrap it into YouTube, right, or shut it down or do something lame. Maybe it ends up being, if they had the-- the funds, a Snap that buys it.

MELODY HAHM: Yeah. I mean, Myles, I want to push back on that Kevin Mayer sentiment. Just because you want to run a publicly traded company doesn't mean you will, right? So if you think about even the Marc Lores of the world, who-- whose Quincy Company that was brought up during that antitrust hearing, he joined Amazon, then left to found jet.com, which was then acquired by Walmart. He's not running Walmart, right? He's not able to create-- maintain that sense of autonomy. And I do feel like there are certain barriers in place. That doesn't necessarily mean that Kevin won't be running his own entity. I just feel as though I-- I don't really sympathize with him leaving Disney to run TikTok.

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