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Microsoft and TikTok need each other
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Microsoft and TikTok need each other

Microsoft (MSFT) is the top candidate to purchase the social media app TikTok from its Chinese parent company ByteDance. The pass may possibly be a grand-wanted lifeline for the app, putting its operations squarely in the hands of an American company, following threats by the Trump administration to ban the service over allegations that it is far a national security threat.Yet Microsoft, or any other potential suitors, will need to wrap up a deal by Sept. 15, or see TikTok shut down.For Microsoft, the potential deal may possibly be a game changer that may possibly reinvigorate the company’s image among younger users who may not exercise Microsoft products thanks to competitors love Google’s (GOOG, GOOGL) Chromebooks and Apple’s (AAPL) iPhone and iPad.Microsoft wants to “age up with the person base,” Jefferies analyst Brent Thill told Yahoo Finance’s On the Transfer. “So in the event that they can get the younger audience today then that’s a car to then promote other solutions.”FILE – In this May 6, 2019, file photo Microsoft CEO Satya Nadella delivers the keynote address at Acquire, the company’s annual conference for software builders in Seattle. (AP Photo/Elaine Thompson, File)Microsoft wishes modern bloodMicrosoft’s successes of late have largely advance from its cloud and server business, as effectively as its productivity matches. The company’s Intelligent Cloud arm, which includes its Azure cloud computing business, pulled in $13.4 billion in fiscal Q4 2020, while its Productiveness and Business Processes arm earned $11.8 billion.But Microsoft’s Extra Personal Computing business, which includes everything from Windows OEM and commercial products to Xbox and Surface sales is tranquil incredibly important to the company. In Q4, the business was accountable for $12.9 billion of the tech giant’s income, proving that while productivity and cloud services and products are certainly money makers for Microsoft, the company merely can’t afford to lose its client business.At the second, Microsoft’s handiest inroad into younger shoppers’ lives is its gaming products, whether or not that’s in the gain of its Xbox brand or PC games. Apple and Google, meanwhile, find their products in the hands of each young person with a smartphone. What’s extra, faculties continue to lean into Apple’s iPads and Google’s Chromebooks as low-trace alternatives to Windows-based laptops for in-class assignments.“Where achieve they consume their time? They’re on these other platforms playing … games they’re on their iPhone,” Thill said. “These are not Microsoft platforms. And so they have a substantial opportunity to grow up with this audience.”Microsoft wishes each opportunity to expand its presence among adolescents to make certain the future survival of its client tech business. And grabbing an upstart social media platform with millions of users can be the suitable opportunity.“I think the brand has changed at Microsoft,” Thill said. “It faded to be kind of stale, but [CEO Satya] Nadella has finished a fantastic job of going after everyone. And so, we think that Microsoft, again, is the suitable neutral third party at the same time as you watch at who may possibly potentially achieve this.”Thill imagines Microsoft integrating TikTok into its Xbox gaming platforms, creating a setup that moves users between the two services and products.TikTok loses the chief scrutinyTikTok is suspected by lawmakers across the political spectrum of using its app to harvest the data of American users. The fear, according to cybersecurity consultants, is that the data may possibly eventually be faded to blackmail teenagers who exercise the service now and take jobs in excessive-security sectors in the future.There’s also the fact that the app collects personal information on users and can turn it over to the authorities if requested to achieve so.But TikTok collects the same kind of data as competing social media platforms love Facebook and Twitter. And the company has been working additional time to present it isn’t being faded as an arm of the Chinese military or intelligence services and products.To that stay, the company employed extinct Disney executive Kevin Mayer as its CEO and has made a large alternative of assurances that the agency isn’t accessing personal data to learn on its users.But that hasn’t been satisfactory for the Trump administration or other lawmakers who say the app merely can’t be depended on.If Microsoft purchases the agency, nonetheless, it may possibly escape such scrutiny. No longer handiest is Microsoft one in every of the largest tech companies in the arena, it also works with the U.S. executive on a series of projects, giving lawmakers reason to belief that this may give protection to person data from foreign governments.There’s no guarantee that the deal will wade via merely yet or what the final phrases would watch love. But from the watch of it, a TikTok owned by Microsoft may be the suitable solution for both companies.Purchased a tip? Email Daniel Howley at dhowley@yahoofinance.com over via encrypted mail at danielphowley@protonmail.com, and apply him on Twitter at @DanielHowley.Extra from Dan:Documents reveal the behind-the-scenes battle between Apple and Spotify that lead to an antitrust investigationApple confirms subsequent iPhone will probably be delayed “a few weeks”Amazon, Apple, Facebook, and Google CEOs push America-first narrative in effort to avoid antitrust scrutinyAnalysts watch to hints of iPhone 12 delays in Q3 earningsFollow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit

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