Microsoft + Tik Tok: The Odd Couple?

From this morning’s newsletter:

I wrote on Friday that the biggest story in tech was the antitrust hearing last week. It turns out that the weekend brought its own interesting storyline as the news broke that the Trump administration was considering a ban of TikTok as early as Saturday (that didn't happen). 

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Microsoft entered the picture and appeared to be interested in purchasing TikTok until President Trump said he would oppose any effort by a U.S. company to buy the social media app. That put a "pause" on negotiations until Microsoft's CEO had a chance to talk directly with Trump.

Now, both companies appear headed, once again, toward a deal, now that Trump has neither imposed a ban nor expressed further opposition to a potential deal. According to The Wall Street Journal, Microsoft expects to wrap up negotiations by mid-September. 

I wrote yesterday about why Microsoft's move to buy Tik Tok looks risky, but in reality, is quite brilliant. 

"Why Microsoft? Because it can. The most likely candidate, Facebook, can't possibly buy TikTok. It's not that it can't afford it, at least from a cost perspective. It's just that there's no scenario, especially after its CEO, Mark Zuckerberg, appeared before Congress, that a deal could get the approval from the federal agencies that would need to weigh in.

That puts the leverage on the side of Microsoft (or any potential buyer). Buying TikTok may seem like it makes little sense for many reasons, but it could make perfect business sense. Microsoft didn't become one of the most valuable companies on earth by passing up opportunities as good as this one."

Read the full story.

Finally, one more note from the antitrust hearing--this time about Apple. In an answer to a question about the App Store, Tim Cook said that the reason the review process is so rigorous is "because we care so deeply about privacy, and security, and quality."

Those three words--privacy, security, and quality--stuck out to me because they define exactly why people are so loyal to Apple's brand. In fact, I think you could argue they guide every decision Apple makes. This morning I wrote about why that matters.