Social media giant, Twitter approaches TikTok for a merger deal

GLOBAL – American based social media company, Twitter has been reported to be in preliminary discussions for a possible combination with TikTok- one of China’s largest social media companies.

The talks with Tiktok are coming at a time when the Chinese tech giant is undergoing immense pressure from US President Donald.

Earlier this month, Trump threatened to ban the the app in the US, terming its continued operation in the US a threat to the country’s security.

According to the US president, the popular Chinese video app TikTok and social network WeChat “threaten the national security, foreign policy, and economy of the United States.”

In an executive order, Trump gave Americans 45 days to stop doing business with the platforms, effectively setting a deadline for a sale of TikTok by its Chinese parent firm ByteDance.

Being under duress to sale its US operations, TikTok owners have been approached by various companies including Microsoft which revealed that it was in talks to buy the company’s US, Canada, Australia and New Zealand operations.

The Financial Times reported that Microsoft had since expanded negotiations and was now after the app’s entire global operations.

Twitter with a US$29.38 billion market capitalization is significantly smaller compared to TikTok which has been valued at about US$50 billion.

As a smaller company, Twitter would have a difficult task in successfully bidding for TikTok, but the social media platform believes it would come under less antitrust scrutiny than larger corporations such as Microsoft, the Wall Street Journal reported.

For Twitter to be successful it will most likely need the support of other investors to complete the combination.

While Twitter does allow for the sharing of videos, most posts contain short text messages and photos or GIFs.

If TikTok became part of Twitter, it would be a second attempt by Twitter to get into the short-form video arena.

 Its previous, unsuccessful foray came through the 2012 acquisition of Vine — but Twitter shut down the 6-second video app in 2017 after failing to find a business model for it.

TikTok, which is run by former Disney exec Kevin Mayer, says it has 100 million U.S. users and employs more than 1,000 people in the States.

US government entities and some businesses have banned TikTok over concerns that Chinese government authorities could demand access to user data from TikTok.

In June, TickTock also became a victim of being a China based company when India banned the app and several dozen other Chinese mobile applications in June, amid a border clash between the two countries.

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