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Trump OKs Potential TikTok Deal With Microsoft

The president did say it would be easier if Microsoft doesn’t bring in other investors for the acquisition deal.

President Donald Trump on Monday said he doesn’t have a problem with the idea of Microsoft acquiring social media app TikTok in the U.S. and other countries.

While speaking at the White House, Trump addressed the potential TikTok deal with Microsoft, which the Redmond, Wash.-based tech giant on Sunday had confirmed is in the works. U.S. government scrutiny of TikTok has come amid worries that the app--owned by China-based ByteDance--could be used by the Chinese government to acquire data on Americans.

[Related: TikTok Talks Another Sign Microsoft Is ‘Not Abandoning’ Consumer Space]

While giving the green light to Microsoft for the deal, Trump did express a preference for Microsoft be the sole acquirer--saying it would be easier than bringing in other investors, as Microsoft had mentioned on Sunday.

The president also said he wanted to see the U.S. Treasury Department receive a payment as part of the deal, though he didn’t offer specifics.

Additionally, Trump said that any acquisition deal would need to be reached by Sept. 15, or he would follow through on his previous threat to ban TikTok in the U.S.

Microsoft declined to comment on Monday, referring to the Sunday blog post as the company’s latest comment on the deal.

Microsoft said in the post that it will move quickly to pursue discussions with ByteDance, with the goal of completing talks by Sept. 15. During this process, Microsoft said it “looks forward to continuing dialogue with the United States Government, including with the President.”

In the blog post, the Redmond, Wash.-based tech giant said that CEO Satya Nadella and President Donald Trump had discussed the deal after the Trump administration expressed concerns about its Chinese ownership.

Microsoft said the two companies talked of a potential deal that would involve a purchase of the TikTok service in the U.S., Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets. Microsoft said it may invite other American investors to participate on a minority basis in this purchase.

“This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections,” Microsoft said.

“Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States,” the company added. “To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred.”

TikTok features short videos posted by users and has emerged as a hugely popular social app in the U.S. in recent years, particularly among younger users.

With the deal, Microsoft “would be making an aggressive bet to transform its consumer strategy with a major social media bet,” wrote Daniel Ives, managing director for equity research at Wedbush Securities, in a note to investors.

If the TikTok acquisition were to go through, the key would be for Microsoft to monetize it without selling user data off, said Reed Wiedower, CTO of Washington, D.C.-based New Signature, an Azure Expert MSP partner of Microsoft.

For instance, Microsoft could “use it to drive subscriptions of Microsoft 365, or Xbox Game Pass, or some other subscription service that would render the effort worthwhile,” Wiedower told CRN in an email.

In a statement Monday, a TikTok spokesperson said the company plans to “build TikTok for the long term” for its 100 million users in the U.S.

“TikTok will be here for many years to come,” the spokesperson said.

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