Microsoft nears big bet on TikTok after risky LinkedIn deal shows promise

Microsoft Corp's potential acquisition of short-video app TikTok carries myriad risks, thrusting it into the politically fraught social media business and conflict amid increased scrutiny of big-tech companies.

Curated via Twitter from Reuters Tech News’s twitter account….

Increased oversight costs accounted for much of the 10-percentage-point drop in gross profit margins for Facebook and Alphabet over the last 3-1/2 years, Refinitiv data showed. “Does Microsoft really want to own an app that breeds conspiracy theories in tweens? ” said Hank Green, YouTube star and chief executive of educational media company Complexly.

He said TikTok removes content to maintain “a certain feel”, and could face public challenges over such decisions more often under a bigger name such as Microsoft. At $1. 55 trillion, Microsoft is the world’s second-largest company by market capitalization after Apple Inc but has in recent years faced less criticism than peers over antitrust, data protection and China projects.

LinkedIn “was bought on domination of a sector, good revenue, and good margins,” said Mike Vorhaus, head of Vorhaus Advisors. “TikTok is going to be valued based on its incredible user growth and mobile advertising revenue opportunities.

OAKLAND, Calif. (Reuters) – Microsoft Corp’s potential acquisition of short-video app TikTok carries myriad risks, thrusting it into the politically fraught social media business and Sino-U. S. conflict amid increased scrutiny of big-tech companies.

Green, the YouTube star, said he doubted Microsoft ownership would hurt TikTok, noting he amassed 600,000 TikTok followers since he began posting a month ago. “I don’t see anything at all standing in the way,” he said.

But the deal could help Microsoft build on its $27 billion purchase of LinkedIn to become a bigger player in internet advertising now dominated by Facebook Inc and Alphabet Inc’s Google.

TikTok’s ad sales team and technology also are far less mature than LinkedIn’s were, and TikTok faces greater competition. About 11% of U. S. adults use TikTok at least once per week, versus 49% for YouTube and 62% for Facebook, showed a survey last month by tech consultancy Vorhaus Advisors.

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