A couple of weeks ago I touched on what the proposed TikTok ban would mean for the average user. It’s played out exactly as I predicted. There are many companies interested in purchasing the app, with Microsoft reportedly being the front runner.
The Trump administration has set a deadline of September 15th regarding the ban. Microsoft or another U.S. company needs to purchase TikTok prior to this date. If so, the app will continue without interruption.
You can speculate all you want as to whether or not Microsoft will purchase TikTok. When you break it down it becomes crystal clear as to why they would have a high interest in this acquisition. They can afford it, so I’m going to go out on a limb and say that I’m very confident this purchase will go through. Here is why.
Shocker: Microsoft Wants Your Data Also
The reason behind this potential ban is based on user data — how it’s stored, who has access to it, etc. The reason that Microsoft wants to acquire TikTok also has to do with data — they want it. Data is the most valuable asset.
Companies like Facebook and Google turned into billion-dollar giants because of data. Microsoft will be under a very large microscope though, so personal data should be more secure in their hands because of this.
There are data breaches all the time — just look at what happened to Twitter a few weeks ago — it’s never 100 percent secure. However, I feel Microsoft will make an extra effort to protect TikTok users moving forward in the event of a purchase.
TikTok’s Advertising Platform is Brand New
The advertising platform on TikTok is brand new. They rolled out a beta to select advertisers and now have a self-service platform available, but acceptance isn’t as easy as with other options such as Facebook.
They are moving slowly and only onboarding advertisers that make sense and have a legitimate offering that they feel aligns with the TikTok brand. So, the floodgates in terms of advertising revenue potential haven’t been opened yet. This allows Microsoft to spearhead this revenue channel from the very beginning, which has to be appealing to them.
TikTok’s Growth Hasn’t Peaked
We haven’t seen TikTok peak yet. While the younger generations are onboard, we are now seeing more adults and brands shift over to the platform. While this is moving slower than Generation Z’s adaptation rate but Microsoft, though it’s other offerings, can put the platform directly in front of older markets.
The app still has a lot of growth potential. This combined with a newly created advertising platform allows Microsoft to take over while TikTok is still in its infancy.
Microsoft Needs a “Cool” Offering
Microsoft has a few stale companies under its umbrella. Bing never really took off — Google continues to dominate online search. LinkedIn was acquired with the plan to revamp it. They haven’t. If anything it’s become more spammy.
Microsoft Office and Outlook are no longer the front runners. Google GSuite is the preferred option for younger startups and companies. TikTok would allow Microsoft to have a new offering in its umbrella that is perceived as “cool” — something they haven’t had in a long time.
It Will Help Them Capture Market Share from Playstation 5
This is the big one — and one of the main reasons I see this purchase happening sooner than later. This holiday season will see the release of the highly anticipated Playstation 5 gaming console. Microsoft will also release the Xbox Series X. This is a new generation of gaming consoles that the industry has been salivating over.
There will be a lot of hype and competition between Sony and Microsoft. Having TikTok as a platform to promote Xbox Series X to the gaming community has to be extremely appealing to Microsoft, more so than the other reasons as the holiday season is quickly approaching.
Microsoft wants to buy TikTok for the simply to get access to gaming’s ideal target demographic. It makes perfect sense. I believe we will see a quick purchase by Microsoft, and not long after we will see several collaborations involving TikTok’s top creators all pushing the Xbox Series X. This could be the marketing edge Microsoft needs to win the upcoming holiday war with Sony.