ByteDance Caves To Trump, Agrees To Sell 100% Of TikTok To Microsoft

President Trump’s insistence that the White House will ban the social-media app TikTok from the US triggered a wave of hysteria among users of the app: whatever will the American teens who built enormously valuable brands sharing dance videos on the app do now? They were just hanging out wit the Kardashians! What are they supposed to do now?!

TikTok influencers pulling up at McDonalds for job interviews after the ban #tiktokban #RIPtiktok pic.twitter.com/pssVP4xj78

— KØDEX (@MoreKODEX) August 1, 2020

China’s still-largely-state-controlled corporate sector has enough exposure to the vicissitudes of survival in the ultra-competitive, heavily scrutinized, anti-trust addled world of big tech that the leaders of Bytedance know that this kind of pressure is simply untenable. For TikTok to survive, ByteDance would need to play the administration’s game.

Earlier this week, reports about a group of VCs bidding as much as $50 billion for the non-China business had emerged. Then Friday afternoon, Fox Business – and then the New York Times, and a gaggle of other media orgs – confirmed that Microsoft was in talks to buy the social media platform.

In an age of burgeoning anti-trust sentiment, such a deal seemingly made little sense for Microsoft, but such a takeover would seemingly ameliorate the administration’s national security concerns, at the very least. Which is probably why what came next triggered such an intense response.

Late last night, President Trump told the White House press corp during an impromptu briefing aboard Air Force One that “we’re banning [TikTok]”.

“As far as TikTok is concerned, we’re banning them from the United States,” Trump told the reporters, adding that he could use emergency economic powers or an executive order.

Was it a glaring example of Trump trying to deliberately undermine Microsoft, perhaps in retaliation against Bill Gates for his support for the WHO (and criticism of Trump)?

Many of the president’s critics probably felt inclined to suspect such foul play. But as it turns out, it looks like Trump’s threats have had the desired effect, and ByteDance is now reportedly ready to let go of TikTok, passing 100% control to Microsoft in a deal that would see the app brought completely under the control of the American tech giant.

Here’s more from Reuters:

China’s ByteDance has agreed to divest the U.S. operations of TikTok completely in a bid to save a deal with the White House, after President Donald Trump said on Friday he had decided to ban the popular short-video app, two people familiar with the matter said on Saturday.

ByteDance was previously seeking to keep a minority stake in the U.S. business of TikTok, which the White House had rejected. Under the new proposed deal, ByteDance would exit completely and Microsoft Corp would take over TikTok in the United States, the sources said.

Some ByteDance investors that are based in the United States may be given the opportunity to take minority stakes in the business, the sources added.

The White House did not respond to a request for comment on whether Trump would accept ByteDance’s concession. ByteDance in Beijing did not respond to a request for comment.

Under ByteDance’s new proposal, Microsoft will be in charge of protecting all U.S. user data, the sources said.

The plan allows for another U.S. company other than Microsoft to take over TikTok in the United States, the sources added.

Microsoft did not respond to a request for comment.

In the end, it looks like Trump was simply using the bully pulpit to ensure America’s national security priorities are respected by the market.