In the eye of the storm
For quite some time now, the Chinese video-sharing social media app Tik Tok has been at the centre of an ever-widening political storm. Coming at a time when Chinese tech companies and products are under the scanner for data security, this is hardly surprising. India for its part has already banned Tik Tok among various other Chinese made apps but now it seems the US might go the same route unless Microsoft steps in and provides another option. To be clear, contrary to what some may believe, Microsoft is looking to buy portions of Tik Tok from ByteDance and not the whole thing as such. This is just one of the unusual aspects of the deal that has the tech and business world buzzing at this moment. The opinion is divided with some calling it the biggest deal Microsoft has made in recent years while others have labelled the whole affair as a confusing and unusual deal which may set a few precedents. The big question is, can a social network be feasibly split along regional lines in the way Microsoft is planning? While Microsoft is pitching to buy the US arm of Tik Tok, the deal may extend to Canada, Australia and New Zealand, countries that have usually followed the US's lead on such matters. The problem here is that Microsoft may well have to rebuild quite a bit of infrastructure that is owned by ByteDance if it truly intends to sever the new product from China. And it will, for all intents, be a separate product, a separate app. There will have to be separate servers to separate the users. How would users from one kind of Tik Tok share with the others? How ill advertising on the split Tik Toks work out? Why would Microsoft even be interested in social media expansions when it has spent the last couple of years streamlining its offerings for the productivity and professional market? The closest thing Microsoft has to a social network is LinkedIn and even that follows the company's commitment to making products for professionals. Many expect Microsoft to not really make any modifications to the base offering of Tik Tok and instead focus on integrating it into their product ecosystem.
What might make the big-ticket acquisition of a social network that has the larger part of its audience elsewhere even remotely sensible is the data Microsoft gets in return. As many commentators on the issue have pointed out, data is the oil of the current era and Microsoft has been seen as lagging behind the other tech giants in the data mining arena. Some have even gone so far as to say that the integration of Tik Tok into the Microsoft ecosystem may ensure that the younger generation is aware of the company's other products, an issue that some have defined as an 'existential crisis'. What some experts and commentators have predicted is that Microsoft may go so far as to slap its own redesign and themes on Tik Tok as it has done with other acquisitions in the past, a transition that has been disastrous for the products in question. The potential may lie in integrating Tik Tok with the only other non-professional offering Microsoft has, its Xbox Live gaming service.
As it stands now, these are not the only hurdles Microsoft must somehow conquer. In tandem, they must handle the political tug of war that is already underway between the US and China. Trump has the power to make ByteDance disinvest in the American market and he knows it. He has placed a deadline for September 15 for this deal to go through after previously expressing disapproval of the potential deal. He has however added the unusual condition that the deal must somehow lead to the US Treasury also raking in the profits. How much is anyone's guess. What is true here is that such assertions are without precedent but quite in keeping with Trump's idea of just how much power a sitting US President has. The White House can leverage its authority on Microsoft through a variety of means, potentially even bringing in Microsoft's Department of Defense contracts. On the other side of the tug of war is China that may shut out Microsoft from a considerable deal of revenue in China if it feels in any way wronged by this deal. China has repeatedly demonstrated its willingness to cut out and isolate foreign companies that do not play by its rules. Some have even stated that this deal could paint a target on Microsoft's back for US lawmaker investigations, as has been the case with tech giants like Google and Facebook who are often under the scanner for data privacy issues. At this stage, one must ask if the benefits from the Tik Tok deal are worth justifying Microsoft landing in the middle of the blame game of superpowers. Whatever be the case, this deal may also have major ramifications for Tik Tok and its current status in India.
