piperschmidt013043

p>Numerous analysts have described the acquisition by TikTok as a possible "coup". This is an opportunity to grab one of the fastest-growing social media platforms in the world at a time TikTok could be in desperate need of an acquisition.

/p>

p>"This is a rare deal of a lifetime opportunity with the potential to easily be redeemed," Dan Ives, Wedbush analyst wrote Monday in a note to investors.

/p>

p>Microsoft says it is still talking to Trump about purchasing TikTok from its Chinese owner

/p>

p>Microsoft will likely pay 50 billion that is the estimated value of TikTok as an independent business, to purchase the app's operations in the United States of America, Canada, Australia, New Zealand and Australia. News of the possible deal was announced on Friday, and since the close of business on Thursday, the market cap of Microsoft has gained $80 billion, a indication that investors are enthusiastic about the idea.

/p>

p>Ives said he estimates that TikTok's valuation could be as high as $200 billion within just a few years "given the steep user and engagement rate of TikTok." Rishi Jaluria, DA Davidson analyst, agreed that TikTok's potential growth is exponentially due to the explosion in social media usage during the coronavirus pandemic.

/p>

p>A consumer-focused investment

/p>

p>Microsoft has been a market leader in the corporate sector for a number of years. It has now shifted its focus away from offering products for consumers to more closely to align its future with its cloud business. Thus, the TikTok deal could be an important shift into the consumer space.

/p>

p>It would be a major enhancement to Microsoft's offerings for consumers which have had mixed success. While LinkedIn has a growing network of influencers, and gaming products Xbox and Minecraft are well-known, Microsoft recently shut down its Mixer game streaming platform. Other Microsoft products aimed at the consumer, such as Bing and the now-defunct Windows phone, have failed.

/p>

p>"Microsoft is a company that we all know, but it's very much an enterprise software company," Jaluria said. "TikTok could be a way to help Microsoft can increase their customer presence, and consumer business."

/p>

p>Although most people don't think about dancing teens when they think of enterprise software, bringing in TikTok could show off Microsoft's capabilities as a company If Microsoft can address concerns around the privacy policies of the app and host a rapidly growing social network on its Azure cloud platform, it will highlight the security and geofencing capabilities of the service, Jaluria said.

/p>

p>It will work.

/p>

p>Despite a few failed bets in the company's past, a variety of acquisitions made under Nadella's reign at Microsoft have been extremely successful.

/p>

p>Jaluria said that Microsoft's acquisition of LinkedIn for $26 billion in 2016 was a "slam-dunk" deal for the company. This was partly because the social media platform was granted considerable autonomy.

/p>

p>"They haven't changed the name of LinkedIn. If you look at the website, they don’t call it LinkedIn By Microsoft or something silly... And LinkedIn gives Microsoft this data which they can use," Jaluria stated, adding that a similar approach could be employed with TikTok.

/p>

p>He added, "As long they don't alter the core product and let it run as (the app's leadership) wants it to, I believe it will be successful acquisition."

/p>

p>How TikTok users react to Trump's potential ban in the USA

/p>

p>However, there are risks, too.

/p>

p>Microsoft has pledged to store American users' personal information in the United States as part of the agreement. Microsoft and TikTok parent ByteDance must approve the agreement. They could also be required to make some payment to the US Treasury. In a period of deteriorating relations between the US and China, the acquisition of an app developed in China could bring Microsoft under more scrutiny.

/p>

p>Microsoft has avoided the scrutiny of regulators that has been directed at its Big Tech peers. However, this could change in the event that it purchases the controversial social media app TikTok, which is made in China that has a large user base. Peter Navarro, White House trade advisor has suggested that Microsoft "divest its Chinese holdings" in order to be permitted to acquire TikTok. He spoke with CNN's Jim Scuitto Monday.

/p>

p>"I do not believe there will be significant antitrust concerns over this deal, because Microsoft does not have a presence in social media used by consumers," Jaluria said. "But in the event of a post TikTok Microsoft could be in trouble because they would have a company which relies on data. That's the issue people have to be concerned about with Facebook and Google making use of data to advertise."

/p>

p>There's also the question regarding whether TikTok is truly sustainable.

/p>

p>Wedbush's Ives stated that if TikTok proves to be the next Instagram (and is able to stand up to the competition that is coming from a Facebook-owned competitor) the deal will be a win-win.

/p>

p>"However, if TikTok becomes the next Snapchat and has a host of user growth and monetization issues in the future, this acquisition could detract from the value over time, given the the massive competition from Facebook and other companies," he said.

/p> https://www.strongcraft.org/