If you’re scratching your head over the prospect of technology giant Microsoft buying the trendy video-sharing app TikTok, you aren’t alone.
After all, Microsoft makes most of its money from selling Office software and Azure cloud computing to business customers. Its enterprise products are far afield from an app known for short videos of people lip syncing and dancing.
Nevertheless, Microsoft is pushing to negotiate a deal for TikTok’s U.S. Operations before Sept. 15, the date when President Trump said he would ban TikTok in the U.S. He alleges that the app, owned by Chinese parent company ByteDance, is a national security threat.
So, if a sale is finalized, what would TikTok be like? The answer is mostly business as usual, according to analysts, who added that Microsoft may eventually try to tie the service into some of its business-oriented products.
For starters, Microsoft should resist immediately slapping its name on the service, explained Ari Lightman, a professor of digital media and marketing at Carnegie Mellon University. For many TikTok users, Microsoft doesn’t resonate at all as a desirable brand.
“I think if they brand it Microsoft, it will be the next Bing,” Lightman said, referring to Microsoft’s search engine that significantly lags Google’s. TikTok is all about cat videos and “people falling into pools—it’s entertainment,” he added, and not particularly corporate.
Microsoft may use TikTok to give its own product development a lift, Lightman added. Microsoft could mine the data TikTok collects, like what kind of content people are more inclined to share, to learn more about consumer behavior—an area in which it’s historically been weak.
Alex Zukin, an analyst for RBC Capital, added that Microsoft could weave parts of TikTok into its Office 365 suite of workplace software, including its Teams instant messaging service. Office workers would be able to create mini-video messages to send to colleagues, much like many of them do already do through a fast-rising workplace instant messaging service called Loom.
Whatever the case, TikTok could be a critical tool for Microsoft for making make sure that younger users are aware of its products—a challenge that Zukin described as Microsoft’s “most existential threat.”
Younger users are already familiar with Google, not only through its popular YouTube video service and search engine, but also by using Google products like Chromebook laptop computers at school. Because of this early indoctrination, many younger consumers “never get into the Microsoft ecosystem,” Zukin said.
In general, he expects Microsoft CEO Satya Nadella to leave TikTok’s U.S. Service and leadership alone after an acquisition. It’s a similar strategy the company took following other big acquisitions in recent years like LinkedIn, developer service GitHub, and video game Minecraft.
The danger for Microsoft is to repeat the mistake of Skype, a once popular online calling service that floundered after Microsoft acquired it in 2011 and then imposed design changes, as Bloomberg reported in 2018. Microsoft also struck out with video-game viewing service Mixer, which it acquired in 2016, but then pulled the plug on earlier this year.
Both Zukin and Lightman said that TikTok would benefit from Microsoft’s Xbox gaming business by merging two different consumer worlds—video sharing and video gaming. People could share TikTok videos of themselves playing video games while viewers click a button to automatically open the same game to play via a cloud gaming service, which Microsoft is already developing.
Last year, Nadella hinted at Microsoft making a bigger push into consumer technology, substituting in the word “life.” In an interview with Coins2Day, he said: “Can we do more things around productivity across work and life? What can we do in gaming, obviously, which is entertainment? These are categories we’ve always been in.”
Perhaps TikTok is the answer.
