In recent news, Tik Tok has caught the eye of many businesses as the Trump Administration has given the Beijing Media company an ultimatum to be bought out by a U.S Business or be banned in the United States. President Trump believes that the media company could be using their platform to cipher United States citizens’ data to the Chinese government and be a National Security concern. Many believe that U.S Multinational Tech Company, Microsoft is an ideal suitor for acquiring Tik Tok.
According to Forbe’s, Tik Tok has a valuation of about $20 billion assuming for $500 million in revenue for 2020 and their 80+ million monthly users- as a fair price for Tik Tok’s United States business. Compared to Facebook’s 244 million monthly users, it is hard to look past that on average Tik Tok users spend 52 minutes daily on the platform while Facebook’s users spend on average 37 minutes. However, we must remember that Tik Tok’s short-form video content is automatic and uninterrupted by scrolling and feeds. This leads to users constantly absorbing content and Tik Tok’s artificial intelligence learning more and more about us by interpreting our micro-interactions on the app.
When we think about how this technology could be applied to Microsoft’s portfolio, for me- their artificial intelligence comes to mind. Microsoft has been investing into artificial intelligence and machine learning for a long time- Azure Cognitive Services and Cortana. According to, Microsoft’s Former Senior Program Manager, Georg Petschnigg, “Microsoft doesn’t have a great AI-based vehicle for entertainment.” That’s where Tik Tok comes in.
Microsoft is late to the game in terms of possessing a video service compared to competitors like Google (YouTube), Amazon (Twitch) and Facebook. Tik Tok’s 80 million users’ data can be harvested and fuel Microsoft’s journey to “AI Dominance.” Tik Tok is the perfect tool to extend consumer reach with AI capabilities.
What does everyone else think? Is $20Billion a fair price for Tik Tok?
2020, https://www.washingtonpost.com/technology/2020/08/05/microsoft-tiktok-ai/. Accessed 11 Sept 2020.
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