Microsoft confirmed Sunday it will continue discussions on purchasing the video app TikTok after a conversation between CEO Satya Nadella and President Donald Trump.
The announcement comes after Secretary of State Mike Pompeo said Sunday that Trump is expected to take action against TikTok and other Chinese software companies viewed as national security threats “in the coming days.”
“Microsoft will move quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020,” Microsoft said in a blog post Sunday. “During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President.”
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Trump said Friday the Chinese-owned TikTok will be banned in the U.S., which he said he can do through emergency economic powers or an executive order.
In its statement, Microsoft said it ”appreciates the importance of addressing the President’s concerns” and “is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States.”
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“The discussions with ByteDance will build upon a notification made by Microsoft and ByteDance to the Committee on Foreign Investment in the United States,” Microsoft said. “The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets.”
Microsoft said its proposed “new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections.”
Daniel Ives, an analyst with Wedbush Securities, said in a note to investors that with an acquisition, Microsoft would be throwing its “hat in the ring and trying to compete with other tech giants such as Facebook in a new avenue of growth for the next decade for its consumer business.”
“For Microsoft this would be a big bet on the consumer social media space, which the company has stayed away from over the last decade,” Ives wrote. “Microsoft buying TikTok and these U.S. operations would resolve the security issues with this app.”
Contributing: John Fritze, Jefferson Graham, David Jackson, and Courtney Subramanian, USA TODAY; Associated Press
Follow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko