How did the talks between Microsoft and ByteDance, the parent company of TikTok, turn into a soap opera? Mike Isaac and Andrew Ross Sorkin spoke with more than a dozen people to understand what happened as the Trump administration began scrutinizing popular app:
To reduce the U.S. pressure, Zhang Yiming, ByteDance’s chief executive, began consulting with a small group of investors in his internet company, including Sequoia Capital and General Atlantic. ByteDance, which is privately held, has been valued at about $100 billion.
Doug Leone, one of Sequoia’s partners, and Bill Ford, chief executive of General Atlantic, became Mr. Zhang’s bridge to the White House, the people with knowledge of the talks said. The firms needed a major U.S. tech partner to get the deal done, the people close to the talks said. Mr. Zhang and the investors figured that Facebook, Google and Amazon were under too much antitrust scrutiny. But Microsoft, with its cash hoard of $137 billion, cloud expertise and strong government relationships, could work.
By July, Microsoft joined the talks. At the time, the discussions centered on Microsoft making a minority investment in TikTok, the people said. Between the U.S.-China tensions and the pressures of operating a social media company, Microsoft executives were hesitant about a big deal, said people briefed on the conversations. ByteDance and Mr. Zhang also wanted to retain some ownership of TikTok, they said.
Yet as the talks progressed, Microsoft grew warmer on a potentially larger deal with TikTok. While Microsoft has lots of data about industries like gaming and workplace software, it has little information about people’s social media behavior. TikTok’s user interaction information could strengthen Microsoft’s data science operation, the people briefed on the talks said.
TikTok could also be linked to Microsoft’s $7 billion advertising business. Together, that could make a meaningful difference to Microsoft’s growth, they said.
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August 26, 2020 at 05:41PM
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Behind the scenes of TikTok’s talks with Microsoft. - The New York Times
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