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RPT: Microsoft interested in buying TikTok U.S. and global business

Yahoo Finance's On the Move panel discuss The Financial times report that Microsoft interested in buying TikTok U.S. and global business.

Video Transcript

ADAM SHAPIRO: Now there's news breaking-- I'm looking at the article right now from "The Financial Times"-- that Microsoft is also perhaps interested not only in buying TikTok's US operations, but TikTok's global business. Let me just quote from the article from "The Financial Times." "Microsoft has since pursued a plan that would include all countries where TikTok operates. TikTok does not operate in China, and such a deal would not extend to its China-facing sister app. Akiko, you follow TikTok. I mean, how serious would this be, and what is the value without the China portion?

AKIKO FUJITA: Yeah, in many ways, this makes more sense for Microsoft. Because right now, what we know from Microsoft is that they've been pursuing not just the US operations, but Australia, Canada, and New Zealand as well. These are the Five Eyes country that we talk about within the intelligence community. And so certainly, from a national security standpoint, those four markets make sense from Microsoft to pursue.

Having said that, the growth potential isn't just in the US. TikTok is a company that operates in roughly 150 countries. They've got huge potential globally. So from an investment standpoint, it certainly makes sense for Microsoft. And also, you know, the technical elements still haven't been hashed out-- and, you know, while Microsoft reportedly has three weeks to really come to a deal on this. That's a really difficult thing to do, when you break up a global app into regional factions.

And so in many ways, you take out the China element, this certainly makes much more sense. Having said that, no question there's going to be not just pushback from ByteDance, but also the Chinese government, which is now having to deal with the backlash. The founder of ByteDance certainly getting hit on social media, saying that they gave into the US. So it's going to be an interesting debate, at least on the domestic front over in China, if this is, in fact, true, at least how "The Financial Times" is reporting it right now.

JULIE HYMAN: Yeah, one of the interesting aspects of the story as well, Akiko, that is talked about in "The Financial Times" is the relationship between Microsoft and China and that if anyone's going to be a buyer of part or of the whole thing, it could be a company like Microsoft because it has had sort of a long-standing relationship with the country.

AKIKO FUJITA: Yeah, I think that's important to note. And it's not just that Microsoft does business in China. They've had an R&D center in China. And the calculation for Microsoft has been completely different from other tech companies. Microsoft, decades ago, decided to establish themselves within China to try and develop those, you know, programmers, tech, you know, talent within China so that they can build out their operations there, as opposed to some other tech companies who've essentially come in to try and bring in American talent in there to build out their operations.

So Microsoft, from the very beginning, has played the long game. In many ways, because of that, they have a better relationship with the government, just within China domestically. But it's going to be interesting to see how the US sees this. Because remember, Microsoft has kind of been under the radar in all of the tech talk and the regulation. Is this going to sort of raise a red flag on the US side to say, well, wait a second, we don't want Microsoft going in and buying all of this and cozying up to the Chinese government, which is how they would see it.