Why Microsoft Could Have Rivals for TikTok. It May Not Just Be Twitter.

The TikTok discussions may draw out other offers. The list of possible buyers includes Snap, Amazon.com, and Google-parent Alphabet, bankers and venture capital executives said.

Amazon is a wild card but it could afford this deal. It is also good at managing businesses that aren’t core to its focus like Whole Foods Market. Facebook makes sense as a bidder, but the media giant might not be permitted to acquire TikTok because of antitrust issues.

And “Google has always struggled to do anything successfully in social,” one venture capital executive told Private Equity News‘ sister title Barron’s.

Snap’s Snapchat has a similar audience to TikTok, one media executive noted. This could lead to internal competition where two units go after the same audience in a similar way, this person said.

Twitter doesn’t have the best history with videos. In 2017, the media company had high hopes for its live video business and hired Todd Swidler to run the unit. Swidler is credited with building out Bloomberg’s video strategy. Twitter live video lost favor after Anthony Noto, then Twitter’s chief operating officer, left in 2018 to join SoFi. Swidler left later that year. Twitter also shut down Vine, the six-second video sharing service, in 2016 after it lost relevance.

Companies can no longer reach large mass audiences using video because viewership has fragmented, said Mark Boidman, head of media and tech services at the investment bank PJ Solomon. This makes TikTok, which has 100 million monthly users, valuable, he said. Any buyer could sell ads or sponsorship to this audience.

An acquisition of TikTok would “immediately provide [the buyer] with a massive inventory that they can tap into,” Boidman said.

Snap, Amazon, and Alphabet could not immediately be reached for comment.

Any rival bidder would need to play catch up in negotiations. Microsoft confirmed on 2 August that it was pursuing a deal for TikTok and that its CEO Satya Nadella had discussed a possible transaction with President Donald Trump.

Trump has set a 15 September deadline for TikTok to find a buyer for its US operations or face a ban. Last week, the president issued executive orders that barred any US company or individual from doing business with either TikTok or WeChat, the popular service owned by Tencent Holdings (700. Hong Kong). The orders take effect in 45 days. The president considers both TikTok and WeChat to be security risks.

For its part, TikTok is reportedly planning to sue the Trump administration, claiming that the executive order is unconstitutional because it failed to give the company a chance to respond. The company will also assert that the administration’s national security justification for the order is baseless.

Source: Barrons