This archive report was first published on 3 August 2020.
US President Donald Trump's reversal on a planned ban of TikTok has set the stage for a potential acquisition of the short video app's US operations by Microsoft Corp.
According to sources, Microsoft formally expressed its interest in acquiring TikTok's US operations on Sunday, after Trump gave the company 45 days to come to a deal.
ByteDance, the owner of TikTok, has not publicly confirmed the sale talks. However, in an internal letter to staff, ByteDance's founder and CEO Zhang Yiming stated that the company had started talks with a tech company to clear the way for TikTok to continue offering its app in the US.
However, clinching a deal that will satisfy all parties will be a tall order, according to Fred Hu, chairman of Primavera Capital Group, an investor in ByteDance. Hu questioned how selling large parts of TikTok's operations at such an early stage of its growth could ever be a good deal for ByteDance.
"It absolutely makes no sense. Bytedance is an innocent victim of the mad politics and mad geopolitics. It is a sad outcome for Bytedance, for entrepreneurial capitalism, and for the future of global commerce," Hu said.
On Monday, the topic of ByteDance agreeing to divest TikTok's US operations was one of the most discussed subjects on China's Twitter-like Weibo platform, with over 920 million views.
Some commentators criticized ByteDance, saying it has not shown as much backbone as Huawei Technologies, which is also in the crosshairs of US-China tensions.
