Is stepping into an international incident worth it for Microsoft? The Seattle-based software company has emerged as the leading candidate to buy the US operations of TikTok, the social network that has taken the world by storm through its viral videos. It would be a strategic digression, laden with political risk as well as opportunities.
The app, owned by China’s ByteDance, is a sensation among American teens. But President Donald Trump sees TikTok as a security risk to the US and threatened on Friday to shut it down. On Sunday, Microsoft confirmed it was attempting to negotiate an acquisition in the next 45 days that could allow both Washington and Beijing to save face amid a deepening cold war.
The purchase would look odd strategically. Microsoft has positioned itself as the leading business-focused software company. Compared with Apple and Amazon, Microsoft has been seen as a mature, dull business, lacking the platform status that enrages politicians and delights investors. Still, its shares are up 340 per cent in the past five years and its market capitalisation now exceeds $1.5tn.