Twitter and TikTok held talks on a possible merger: WSJ

Twitter and TikTok held preliminary talks on potentially combining companies, according to the Wall Street Journal. Yahoo Finance’s Dan Howley joins Kristin Myers to break down the details.

Video Transcript

KRISTIN MYERS: Welcome back to live market coverage here on Yahoo Finance. We are still seeing a mixed bag when we're looking at all three major indices right now. The NASDAQ the only major index right now in the red.

I want to look over at Microsoft. They are down about 2 and 1/2%. Of course, the company was rumored to be purchasing TikTok. But they might have some competition now from Twitter.

So for more on that, we're joined now by Yahoo Finance techxpert, Dan Howley. Hey, Dan. Tell us more about this.

DAN HOWLEY: Hey, Kristin. Yes, it looks like Twitter is now in the potential running for scooping up some parts of TikTok. Now, this wouldn't be the full service. It would be TikTok's operations in the US, the UK, Canada, Australia-- not the entire global operation. It's similar to what we would see out of Microsoft.

But what's interesting here is Twitter doesn't have the market capitalization anywhere close to Microsoft, which is $1 trillion-plus. We're talking about in the billions for Twitter. So it would be a little bit more difficult for them to come up with the cash versus Microsoft.

It does make more sense, though, considering that Twitter is in the social media space, where Microsoft only has a presence there as far as LinkedIn is concerned. But for overall company strategy, it would seem to make more sense for Microsoft to pick it up, just because that company really needs the younger audience to come in and experience their products so that later on down the line, they're used to using Microsoft goods rather than just the iPhones that they usually use, or Google Chromebooks that they might use in the home or classroom.

So it might make sense for Microsoft to really push here. But what we're hearing from the "South China Morning Post" is that Microsoft may not end up with a deal at all for TikTok. That was reported earlier this morning, basically saying that it's unlikely that a deal will come through from Microsoft.

And that could really take the TikTok issue in a completely different direction if President Trump does indeed shut down operations with US partners in September. We don't know what would happen to the business at that point. We don't know if it would still be accessible, if companies would still allow downloads, like Apple and Google. That all remains to be seen.

But for now, what we're hearing is Twitter is in the running now. Microsoft, it's not looking so hot. Well, we'll just have to see what happens for TikTok next month.

KRISTIN MYERS: Absolutely. And of course, you'll be back to tell us more about what happens with that. Thanks so much, Dan. And looking over at Twitter right now, that stock is actually up about 1 and 1/2% right now.