Microblogging platform Twitter has expressed an interest in acquiring the US operations of video sharing platform Tiktok from its Chinese owner ByteDance.
Reports stated that Twitter has approached ByteDance to possibly purchase the US business of TikTok. The video sharing platform has been at the center of discussions after President Donald Trump issued an executive order banning it.
US ban on TikTok and WeChat
Last week, President Trump issued executive orders that would ban TikTok and WeChat in the US in 45 days if sold by their Chinese-owned parent companies.
The TikTok order states that after 45 days, “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd.,” will be prohibited.
The order also makes the accusation that the social media platform “automatically captures vast swaths of information from its users,” such as location data and browsing and search histories, which “threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.”
Meanwhile, the executive order issued for Tencent-owned WeChat, which allows its users to transfer funds to each other, states that financial transactions with Tencent will be banned.
The order prohibits “any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.”
TikTok said it will sue President Trump over his administration’s decision to ban the app in the US, according to a person familiar with the lawsuit. The Chinese company previously warned about making a legal move against the US government.
Can Twitter afford TikTok?
Sources quoted in the Wall Street Journal said it remains unclear whether Twitter can afford to buy TikTok from ByteDance and whether it can complete the transaction within the 45-day window.
While the value of TikTok's US operations are unclear, estimates are placing it at tens of billions of dollars. On the other hand, the market capitalization of Twitter is only around $29 billion compared to the other potential buyer, Microsoft, which is worth more than $1.6 trillion.
Previously, Microsoft affirmed that its talks with ByteDance were about acquiring its social app TikTok in the US. According to Microsoft, it will continue working with the US government on a deal and plans to finalize the talks by September 15.
“This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections,” Microsoft said. “The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries.”
The tech giant certainly has the capacity to acquire TikTok US but experts believe that a possible Twitter deal would face less regulatory scrutiny than Microsoft's.
