News that Microsoft is in talks to buy TikTok raises all sorts of fascinating questions. Microsoft in recent years has been much more focused on selling to business customers than individuals; TikTok would take them in the opposite direction. The closest fit within Microsoft’s business would be its Xbox gaming division, although it isn’t that close.
It also would raise Microsoft’s exposure to the advertising business, which isn’t ideal for Microsoft shareholders. One reason why Microsoft has skated through the pandemic largely unaffected is its lack of dependency on ad revenue. One big question is whether antitrust regulators would approve the deal. True, this is a new area for Microsoft. But one of the concerns expressed by politicians in recent days is the influence of big tech. A TikTok acquisition wouldn’t reduce a big tech company’s power.
It would, however, create a formidable rival to Facebook and Google’s YouTube, both of which compete with TikTok. For that reason alone, antitrust regulators may be happy.—Martin Peers