What might TikTok, the China-based short-form video platform that’s home to teenage nonsense and whimsy, look like under Microsoft, America’s most boring Big Tech company?
On Friday night, President Trump tweeted his intention to ban TikTok over concerns that the app is providing the Chinese government with data on U.S. users. (Though there’s no evidence this has happened, there are legitimate concerns about any Chinese company handling users’ personal information.) Then, over the weekend, Microsoft entered furious negotiations with the White House to rescue its bid to purchase TikTok from its parent company, ByteDance, thereby allowing it to keep operating in the U.S. The deals and its details have yet to be finalized, and some within the administration like senior adviser Stephen Miller and trade adviser Peter Navarro are reportedly still pushing for an outright ban. Trump said on Monday that he’s fine with the compromise, though, so there’s a decent chance that TikTok will soon join Microsoft’s software lineup by Sept. 15. (The president has also suggested that the U.S. Treasury would get a cut from the deal, though it’s unclear how exactly that would happen.)
The success and failures of Microsoft’s previous acquisitions might give us a clue as to whether TikTok can thrive under its umbrella. The former home-computing goliath has increasingly shifted its focus to enterprise products for business professionals, but it’s also a large tent that includes products like the Xbox and Surface tablet. The current pandemic has highlighted the pitfalls of one of its biggest purchases: Skype. Indeed, Zoom’s ascendance as the defining videoconferencing platform of the quarantine reveals just how much Microsoft bungled its 2011 acquisition of Skype, formerly the dominant player in the space, for $8.5 billion. As Wired lays out, Microsoft began piling features onto Skype in a bid to make it a competitor with messaging platforms like WhatsApp and Telegram. Skype redesigns added emojis, YouTube and Giphy integrations, stories, and other functions cribbed from popular apps. Yet video calls, the tool that brought users to Skype in the first place, suffered a notable degradation of quality and reliability at the same time. Tech commentator Om Malik summed up the general reaction to Microsoft’s meddling when he tweeted in 2018 that Skype was a “turd of the highest quality” and added, “Way to ruin Skype and its experience. I was forced to use it today, but never again.” Skype’s stumbles allowed Zoom to refine its video calling and add features that would more directly complement this core functionality, like meeting transcripts. Microsoft now plans to shutter Skype for use in business calls by July 2021, replacing it with the videoconferencing feature in Teams, Microsoft’s Slack competitor. Microsoft acquisitions for the ad giant aQuantive and Nokia have similarly gone up in smoke.
Microsoft took the opposite approach with its 2016 acquisition of LinkedIn, which went for $26.2 billion. There was initially some speculation that Microsoft might try to bundle the job-oriented social network with other products, but LinkedIn has instead been able to operate as a fairly autonomous entity without any major redesigns or intervention from its parent. The site has continued to steadily add users over the last few years and has earned $14.3 billion in revenue for Microsoft thus far, though the purchase has yet to become profitable. Prior to the pandemic, the site was growing faster than it had been before the acquisition. LinkedIn has hinted at greater integrations with Office apps and will begin adopting Microsoft’s Azure public cloud, but these changes have been slow to come, like because Microsoft has some trepidations about messing around with its biggest acquisition thus far. The company has similarly taken a hands-off approach with the software-development platform GitHub, which it purchased in 2018 for $7.5 billion.
There’s a lot that Microsoft could do with an immensely popular platform like TikTok and the associated troves of user data, though it’ll have to be careful so not as to alienate the app’s teen fans. TikTok itself isn’t profitable, but piling more advertising into its endless feed of viral dance crazes and eboys could dampen users’ experience. Thankfully for TikTokkers, Microsoft has shown that it can be a good steward for other youth-focused products. Minecraft, whose developer Microsoft purchased in 2014, remains a popular video game with more than 200 million copies sold thanks in part to a noninterventionist ownership approach. And Xbox continues to hold its own in the gaming-console market. On the other hand, Microsoft closed the video game-streaming platform Mixer on July 22 after failing to grow it enough to compete with Twitch, Amazon’s streaming platform. Microsoft could use TikTok to connect more than 100 million U.S. users to its gaming, augmented reality, and artificial intelligence products, but given how aggressive modifications haven’t paid off in the past, any potential new features would likely be slow to arrive. The company has been tight-lipped about what exactly it envisions for the video platform, merely stating that it would “build on the experience that TikTok users currently love.” To be clear, they love this dance: