Mi­crosoft said to be in talks to buy TikTok

San Francisco Chronicle Late Edition - - BUSINESS REPORT - By Mike Isaac and Ana Swan­son

Mi­crosoft is in talks to ac­quire TikTok, the Chi­nese­owned video app, ac­cord­ing to a per­son with knowl­edge of the dis­cus­sions, as Pres­i­dent Trump said Fri­day that he is con­sid­er­ing tak­ing steps that would ef­fec­tively ban the app from the United States.

It’s un­clear how ad­vanced the talks be­tween Mi­crosoft and TikTok are, but any deal could help al­ter TikTok’s own­er­ship, said the per­son with knowl­edge of the talks, who spoke on con­di­tion of anonymity. TikTok is owned by ByteDance, a Chi­nese in­ter­net com­pany that is val­ued at $100 bil­lion. That has raised scru­tiny of the app, with Trump ad­min­is­tra­tion of­fi­cials say­ing they have been con­cerned that TikTok poses a threat to na­tional se­cu­rity.

The Trump ad­min­is­tra­tion has been weigh­ing whether to or­der ByteDance to di­vest from

U.S. as­sets it ac­quired in 2017, which were later merged into TikTok. Bloomberg re­ported Fri­day that the pres­i­dent was poised to an­nounce an or­der that would force ByteDance to sell TikTok’s U.S. op­er­a­tions.

The Trump ad­min­is­tra­tion has also been weigh­ing other po­ten­tial ac­tions against the com­pany, in­clud­ing adding ByteDance to a so­called “en­tity list,” which pre­vents for­eign com­pa­nies from pur­chas­ing U.S. prod­ucts and ser­vices without a spe­cial li­cense, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter.

“We’re look­ing at TikTok. We may be ban­ning TikTok,” Trump told re­porters Fri­day be­fore head­ing to

Florida. “We may be do­ing some other things. There’s a cou­ple of op­tions. But a lot of things are hap­pen­ing, so we’ll see what hap­pens. But we are look­ing at a lot of al­ter­na­tives with re­spect to TikTok.”

Rep­re­sen­ta­tives from TikTok did not re­spond to re­quests for com­ment. A spokesper­son for Mi­crosoft de­clined to com­ment. The dis­cus­sions be­tween Mi­crosoft and TikTok were ear­lier re­ported by Fox Busi­ness.

Law­mak­ers and the Trump ad­min­is­tra­tion have in­creas­ingly ques­tioned whether TikTok is sus­cep­ti­ble to in­flu­ence from the Chi­nese gov­ern­ment, in­clud­ing po­ten­tial re­quests to cen­sor ma­te­rial shared on the plat­form or to

“We’re ban­ning some other look­ing TikTok. things. at We TikTok. There’s may be We a do­ing cou­ple may be of op­tions. But a lot of things are hap­pen­ing, so we’ll see what hap­pens. But we are look­ing at a lot of al­ter­na­tives with re­spect to TikTok.”

Pres­i­dent Trump, talk­ing to re­porters be­fore head­ing to Florida

share Amer­i­can user data with Chi­nese of­fi­cials.

The app has been un­der re­view since late last year by the Com­mit­tee on For­eign In­vest­ment in the United States, a fed­eral panel that ex­am­ines for­eign ac­qui­si­tions of U.S. firms for na­tional se­cu­rity threats.

In re­sponse to the height­ened scru­tiny, TikTok has aimed to ease gov­ern­ment con­cerns by tap­ping an Amer­i­can to head its U.S. busi­ness. In May, TikTok hired a top Dis­ney ex­ec­u­tive, Kevin Mayer, to be its chief ex­ec­u­tive.

Ex­ec­u­tives at TikTok have dis­cussed other sce­nar­ios to al­le­vi­ate reg­u­la­tor con­cerns, in­clud­ing one in which U.S. in­vestors like Se­quoia Cap­i­tal and Gen­eral At­lantic could pur­chase TikTok back from ByteDance, peo­ple fa­mil­iar with the dis­cus­sions have said, with the Chi­nese com­pany re­tain­ing a mi­nor­ity stake in the so­cial app.

Founded in 2014, TikTok has grown from an es­o­teric mu­sic video app into a global so­cial me­dia phe­nom­e­non. The app, which is used by more than 800 million peo­ple across the world, was ac­quired in 2017 by ByteDance. The app grew pop­u­lar with young peo­ple by adding mu­sic tracks to user­gen­er­ated video con­tent. The videos of­ten travel vi­rally across Face­book and Twit­ter.

Since the ByteDance ac­qui­si­tion, the com­pany’s Chi­nese of­fices have swollen to tens of thou­sands of em­ploy­ees. But the com­pany has main­tained a U.S. pres­ence, with of­fices in New York and Los An­ge­les, and has con­tin­ued to hire Amer­i­cans ag­gres­sively.

TikTok has spent the past few months bulk­ing up its lob­by­ing op­er­a­tion in Wash­ing­ton in an at­tempt to con­vince law­mak­ers that it is a U.S. com­pany and to pre­vent the United States from forc­ing it to break away from its Chi­nese par­ent com­pany.

With help from prom­i­nent in­vestors like SoftBank and Gen­eral At­lantic, it has over­hauled its pres­ence in Wash­ing­ton, in­clud­ing hir­ing the for­mer head of the In­ter­net As­so­ci­a­tion, a trade group that rep­re­sents com­pa­nies like Google and Face­book, and staff mem­bers from prom­i­nent mem­bers from Congress.

The com­pany has signed on more than 35 lob­by­ists, in­clud­ing David Ur­ban, a for­mer West Point class­mate of Sec­re­tary of State Mike Pom­peo and an ally of Trump. The com­pany’s lob­by­ists have high­lighted TikTok’s Amer­i­can in­vestors and Mayer’s hire.

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