Sources: Twitter had preliminary talks with TikTok about combining with TikTok's US operations, expecting it would face less antitrust scrutiny than Microsoft

Microsoft still seen as front-runner in bidding for video-sharing app's U.S. operations — Twitter Inc. TWTR -1.46% …

Wall Street Journal 2020-08-09

Context & Ripple Effects

Microsoft has been running point on a TikTok rescue since talks to acquire the app surfaced at the start of August, progressing through weeks of discussions that included U.S. officials before being nearly derailed by Trump's public opposition. By August 5, reporting put the price tag anywhere from $10B to $30B with a three-week window to close, and by August 6 Microsoft had widened its ambition from the U.S. business to all of TikTok's global operations.

Twitter's entry reframes that auction. Where ByteDance executives had seen Microsoft as the most viable buyer because of its management depth, Twitter's pitch is different: a far smaller acquirer that would attract less antitrust scrutiny — a real consideration for a deal already entangled with Washington.

First-order effects

ByteDance gains a second named suitor for TikTok's U.S. operations just as its negotiating position with Washington grows urgent, giving it leverage beyond a single Microsoft negotiation.

Second-order effects

Microsoft's front-runner status now depends on neutralizing the antitrust argument Twitter is implicitly making; a competitive bid from a smaller player pressures Microsoft to close quickly inside its self-imposed three-week window rather than let diligence drift.

Third-order effects

If the pattern holds, a government-forced divestiture becomes an auction where regulatory footprint matters as much as price — favoring smaller or less scrutinized acquirers even when larger ones can pay more and integrate faster.

The trend: The forced TikTok divestiture is turning into a politically shaped auction in which antitrust exposure, not just price, determines which buyer Washington will tolerate.

Discussion

@sarahfrier Sarah Frier on x
It turns out that killing Vine was a very expensive mistake https://twitter.com/...
@jchengwsj Jonathan Cheng on x
The latest entrant in the TikTok USA sweepstakes is a social-media company called Twitter, which knows how it feels to be unwanted (but also wanted) by a foreign government. @georgia_wells @CaraRLombardo https://www.wsj.com/...
@shiraovide Shira Ovide on x
Is there such a thing as Occam's Razor for M&A? Like if one deal if a cash rich company writing a giant check, and another option is Jack Dorsey holding up a “Help w/financing?” sign on Market Street, then...? https://www.wsj.com/...
@azalben Alex Zalben on x
Oh wow maybe Twitter could limit TikTok videos to 6 seconds and then slowly throttle it into non-existence https://twitter.com/...
@martinsfp Martin Sfp Bryant on x
TweetTok! But also seemingly SplitTok, because “A deal would involve TikTok's U.S. operations.” Noooo.... you need to buy the whole thing outside China or you're on a hiding to nothing. https://www.wsj.com/...
@zachhalverson Zach Halverson on x
Twitter looking to aquire and kill any and all short term video services out there. https://twitter.com/...
@rmac18 @rmac18 on x
Vine walked so TikTok could fly https://twitter.com/...
@hshaban Hamza Shaban on x
“Twitter's market capitalization is about $29 billion and Microsoft's is more than $1.6 trillion.” Twitter is a long-shot bidder for TikTok's US operations, the WSJ reports. The companies have had preliminary talks. But Microsoft is much further along. https://www.wsj.com/...
@besvinick Adam Besvinick on x
This would be quite the make-up deal after losing out on Instagram, squandering Vine, and arguably not doing enough with Periscope https://twitter.com/...
@brittlestar @brittlestar on x
Finally! Twitter could have its own Vine! *stares at camera with sarcasm* https://twitter.com/...
@karaswisher Kara Swisher on x
So Vine except it doesn't die on one: Twitter, TikTok Have Held Preliminary Talks About Possible Combination - WSJ https://www.wsj.com/...
@carnage4life Dare Obasanjo on x
Twitter is trying to compete with Microsoft for TikTok but it's entire market cap is less than the potential sale price. Imagine if instead of killing Vine they'd decided to invest in machine learning for the recommendation engine? TikTok wouldn't exist. https://www.wsj.com/...
@gbrumfiel Geoff Brumfiel on x
And they'll call it... Vine? Twitter has had preliminary talks with TikTok about a potential combination with its U.S. operations, people familiar with the matter say https://www.wsj.com/...
@mgsiegler M.G. Siegler on x
Does Treasury want Twitter stock? https://twitter.com/...
@sameer_singh17 Sameer Singh on x
Twitter is a much better fit. But I can't tell if acquirers are pushing for buying US ops or if TikTok is hoping to sell US ops for a discount and salvage the rest. Splitting off the network at this scale would massively handicap both parts. https://twitter.com/...
@mdudas Mike Dudas on x
lol, 0.01% chance @realDonaldTrump allows this deal to happen https://www.wsj.com/...
@kantrowitz Alex Kantrowitz on x
Imagine Twitter had a short form video app that people loved https://www.wsj.com/...
@ia @ia on x
Surprising turn: https://www.wsj.com/...
@sobendito Ben Carlos Thypin on x
It's almost as if they never should have shut down Vine https://www.wsj.com/...
@timheuer Tim Heuer on x
Ok so @satyanadella we can walk away now easily right? Please? https://www.npr.org/...
@sheenagreitens Sheena Greitens on x
There are legitimate concerns w/ WeChat censorship & surveillance. My heart also aches for Chinese-Americans who already can't visit relatives, & now may lose video chats w/them also. Targeting WeChat, Trump Takes Aim at China's Bridge to World: https://www.nytimes.com/...
@jolingkent Jo Ling Kent on x
TikTok: “What we encountered instead was that the Administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses.” https://newsroom.tiktok.com/ ...
@truthsleuthyt @truthsleuthyt on x
Now this is going to be an interesting lawsuit for sure 👀 https://twitter.com/...
@nazirafzal Nazir Afzal on x
As a fan of #TikTok & a much bigger fan of free speech (that is not hateful) I would happily join their legal team! Does Trump really think that TikTok is more of a threat to privacy & our data than his chums at Facebook, Amazon, Google etc? It's always politics & money https://t…
@mikko @mikko on x
“the lawsuit will argue that the president's far-reaching action is unconstitutional because it failed to give TikTok a chance to respond. It also alleges that the administration's national security justification for the order is baseless” https://twitter.com/...
@evleaks Evan Blass on x
With the US's increasingly aggressive posture toward numerous crown jewels of China's tech sector, how long before China starts taking painful retaliatory action? Apple, for instance - with its heavy reliance on both Chinese labor and consumers - would seem especially vulnerable.
@thesharpedge1 @thesharpedge1 on x
POTUS issued an executive order Thursday night banning China's TikTok owned by ByteDance in 45 days on the basis that the app has been gathering data that could potentially be shared with the government of China. https://www.google.com/... https://www.whitehouse.gov/...
@nbcnightlynews @nbcnightlynews on x
In orders targeting TikTok and Tencent, Pres. Trump argues that the apps developed and owned by companies in China “threaten the national security, foreign policy, and economy of” of the US by making US citizens data vulnerable to Chinese Communist Party. https://www.nbcnews.com/…
@thr @thr on x
“These risks are real,” reads Trump's order, which cites the International Emergency Economic Powers Act as its basis. “The United States must take aggressive action against the owners of TikTok to protect our national security” https://thr.cm/6euHhUW
@emilydparker Emily Parker on x
The executive order is basically describing TIkTok and WeChat as a “national emergency” https://www.whitehouse.gov/...
@byyourlogic @byyourlogic on x
Donald Trump despises the current Fortnite meta https://twitter.com/...
@genepark @genepark on x
Will this tiktok ban affect fortnite then?! Call of Duty mobile?! https://twitter.com/...
@originalspin Jeff Yang on x
Trump getting even with the TikTok kids who turned his Covid-infested Tulsa rally into a humiliation. What's next, a ban on BTS? Not sure Donnie wants to wake this dragon https://twitter.com/...
@samaugustdean @samaugustdean on x
Video game companies owned by Tencent will NOT be affected by this executive order! White House official confirmed to the LA Times that the EO only blocks transactions related to WeChat So Riot Games (League of Legends), Epic Games (Fortnite), et al are safe (pending updates)
@paulmozur @paulmozur on x
WeChat is now in play as the Trump admin looks to break a 20-year custom of mostly ignoring Chinese internet blocks. The executive order lays the groundwork for an eye-for-eye reprisal aimed at what is China's most groundbreaking internet product. https://www.nytimes.com/...
@halhod @halhod on x
@alexhern don't think this is the case, as the app is different in mainland, and not called wechat. it's chinese name weixin isn't in the order
@whnsc NSC on x
WeChat is subject to the authority of the #CCP, which actively undermines U.S. interests and is hostile to American values and the rights of individuals. https://www.whitehouse.gov/...
@alexdobie Alex Dobie on x
This is absolutely wild. While WH has clarified it's only going after WeChat + not all of Tencent, that still means WeChat being pulled from Google Play & App Store in 45 days. MUCH bigger deal on iOS vs Android given the lack of sideload options (thread) https://www.androidcentr…
@whnsc NSC on x
TikTok has a history of censoring free speech to conform to #CCP propaganda and captures information from users in the U.S. and around the world. The Trump Administration will not allow the CCP to exploit the private information of U.S. citizens. https://www.whitehouse.gov/...
@nytimes @nytimes on x
By targeting the all-purpose Chinese app WeChat, President Trump's executive order restricting Chinese tech would curb Beijing's ability to spread propaganda, but also cut off conversations between investors, business partners, family and friends. https://www.nytimes.com/...
@nytimesbusiness @nytimesbusiness on x
“Trump is violating our rights to connect with our families and friends. If WeChat is really banned, the executive order seems rather unconstitutional, it violates the First Amendment,” said May Han, a Chinese American student in California https://www.nytimes.com/...
@cnn @cnn on x
President Trump issued executive orders that will ban TikTok from operating in the US in 45 days if they are not sold by their Chinese-owned parent companies. CNN's @Hadas_Gold looks back at the rise and controversies of the app. https://www.cnn.com/... https://twitter.com/...
@reckless Nilay Patel on x
Trump going after WeChat / Tencent is a lot different than going after TikTok — Tencent is an absolute force in gaming, movies, and music. @345triangle explains, in a story that started by just making a list. Top Gun! https://www.theverge.com/... https://twitter.com/...
@baldingsworld @baldingsworld on x
Amazing how ingrained CCP propaganda has become even in mainstream outlets that would deny it. Why is WeChat the only bridge? Because Beijing blocks everything else and censors WeChat. Why is everything about whether it upsets Beijing? Terrible framing https://www.nytimes.com/...
@yuanfenyang Yuan Yang on x
The best side-effect of the WeChat ban could be to get more Chinese diaspora onto @signalapp and other end-to-end encrypted apps. That would be a concrete step towards better security. BUT WAIT, the US govt is also defunding the creators of secure apps! https://www.theverge.com/.…
@alexhern Alex Hern on x
If I'm reading this EO correctly, it obliges Apple to remove WeChat from the Chinese App Store, which would effectively kill the company's phone business in China. China represents a little under 15% of Apple's global revenue https://www.whitehouse.gov/...
@arielbogle Ariel Bogle on x
Trump's executive order incorrectly claims WeChat is banned or restricted in Australia. It is not, or at least, not currently. https://www.whitehouse.gov/... https://twitter.com/...
@mikeisaac Rat King on x
tencent acknowledges the EO, but not much more for now: ""We are reviewing the executive order to get a full understanding." — Tencent spokesperson
@seldo Laurie Voss on x
Is blocking financial transactions with TenCent also about national security or are we finally admitting the mask is off this blatant nationalism? https://www.theverge.com/...
@chandrarsrikant Chandra R. Srikanth on x
Trump cites India's actions against Chinese apps in both his executive orders on WeChat and TikTok. Thee TikTok order even quotes @GoI_MeitY. Fact that US seems to be following India on how it regulates Chinese Internet cos is remarkable in itself. https://twitter.com/...
@annafifield Anna Fifield on x
All the focus has been on TikTok because Americans use it. But for China, WeChat is a much much bigger deal. It's impossible to function in China without WeChat https://www.washingtonpost.com/ ...
@aynrandpaulryan Holly Figueroa O'Reilly on x
What a man-baby. 😂 The tweens on TikTok really hurt his feelings when they punked him in Tulsa. Trump Targets WeChat and TikTok, in Sharp Escalation With China https://www.nytimes.com/...
@jbursz Jessica Bursztynsky on x
A WeChat ban would be devastating for so many people in China who have relatives/friends in the U.S. and vice versa I don't think some ppl understand how important and prevalent the app is for SO many people in their day-to-day lives, who just want to check-in across the world ht…
@doctorjohn_md DoctorJohn on x
WeChat is the only way I can communicate with my *entire* extended family. My mom, dad, and sister are my only family in the States. Oh also, TenCent has a significant financial stake in over a dozen major game publishers & developers. Trump's a fucking asshole https://twitter.co…
@briannawu Brianna Wu on x
Tencent owns League of Legends and PubG, meaning neither two of the biggest games on the market can't make money. Tencent also has a 40 percent stake in Unreal Engine, which makes Fortnite. This is so incredibly stupid. https://twitter.com/...
@mariabustillos Maria Bustillos on x
The PRC is an authoritarian state *now* with no press freedom or speech rights, activists jailed and worse, and what amounts to a slave population of millions in “re-education camps.” Authoritarian tendencies have increased in the US since 9/11, but equating the two is absurd. ht…
@noonanjo John Noonan on x
There's a rich vein of reporters in midtown Manhattan who believe that air conditioning is oppression but racial based concentration camps are dismissible. https://www.theverge.com/...
@blueboxdave David Marcus on x
You can tell because if she wrote this article in China about China she'd be in jail. https://twitter.com/...
@kenroth Kenneth Roth on x
To steer people to WeChat, the Chinese government has blocked end-to-end encryption messaging apps like WhatsApp. Only a handful are still allowed. https://www.nbcnews.com/...
@hunterw Hunter Walker on x
BREAKING: President Trump just issued an executive order “on Addressing the Threat Posed by TikTok.” It takes effect in 45 days, prohibits “any transaction” with ByteDance, the Chinese company that owns TikTok, and will almost certainly face legal challenges. https://twitter.com/…
@liuxininbeijing Liu Xin on x
US intelligence agency's analysts told the White House, it is possible that the Chinese intelligence authorities could intercept data or use the app to bore into smartphones. But there is NO EVIDENCE they have done so. The future? I say, it's all guessing.https://www.nytimes.com/…
@pegobry Peg on x
And since America's intelligence agencies have been declared infallible in November of 2016... https://twitter.com/...
@nytimes @nytimes on x
White House Memo: “Sorting out the real threats from the imagined ones is as complex as the design of the internet. But the threat TikTok poses, intelligence officials say, pales to the one created by Huawei,” write @SangerNYT and @julianbarnes https://www.nytimes.com/...
@fernanmartinez Fernn Martinez on x
#TikTok has a parenting problem, raising preteens and teenagers distracted by its viral videos can attest. But when the C.I.A. was asked recently to assess whether it was also a national security problem, the answer that came back was highly equivocal. https://www.nytimes.com/...
@katherineykwu Katherine Wu on x
I have tears steaming down my face trying to figure out what the hell this means. WeChat is the only form of communication between me and my parents and grandparents- my entire family in China. It's always been so goddamn hard to be so far from them, and especially this year. htt…
@ruima @ruima on x
So WeChat has something like 3mm users in the US mostly Chinese diaspora. Kindly do explain to me the threat.
@nakashimae Ellen Nakashima on x
NEW: TikTok's fate was shaped by a ‘knockdown, drag-out’ Oval Office brawl. w/@lizzadwoskin @JStein_WaPo @greene https://www.washingtonpost.com/ ...
@georgetakei George Takei on x
Now that Trump is trying to ban TikTok by Executive Order, young people everywhere should use the app to spread the message: Register to vote, and defeat Trump in November.
@repjimbanks Jim Banks on x
TikTok is a trojan horse for #CCP data collection & espionage.@realDonaldTrump's EO puts America's national security first. A turning point in US cybersec policy! https://www.foxbusiness.com/ ...
@firstadopter Tae Kim on x
TikTok issue is using up valuable White House bandwidth that could be used for virus mitigation, econ/trade/stimulus etc. -> Washington Post: “a shouting match broke out in the Oval Office between ... Peter Navarro [and] Treasury Secretary Steven Mnuchin” https://www.washingtonpo…
@paulobrien Paul O'Brien on x
I also read it as being much broader than just WeChat, it would also remove QQ and a bunch of other services for iOS? Suspect Tim Apple will be lobbying hard on this one. https://twitter.com/...
@edbott Ed Bott on x
From now on, all mentions of Peter Navarro in the media should be autocorrected to “Peter Navarro, lunkhead menace.” https://twitter.com/...
@farhip Paul Farhi on x
“I have no comment on what is clearly a malicious leak riddled with hyperbole and misinformation,” says White House advisor Peter Navarro, essentially not denying this story about an Oval Office shouting match with Treasury Secretary Steve Mnuchin. https://www.washingtonpost.com/…
@gwbstr Graham Webster on x
US platform governance: companies currying favor with some advisers to set up a deal to avoid huge problems if the boss happens to go with the totally unmoored adviser's burn-it-all-down instincts. https://twitter.com/...
@basche42 Ben Basche on x
At the end of the day, Minooch is more important to Trump than Navarro. The former is a real money guy who ties Trump to actual power, the latter is a crank If these are the two demons on Trump's shoulders, I think then this edges in favor of an amicable-ish outcome for Tok https…
@karaswisher Kara Swisher on x
What a way to run a country: TikTok's fate was shaped by a ‘knockdown, drag-out’ Oval Office brawl https://www.washingtonpost.com/ ...
@cold_peace_ Jeff M. Smith on x
“Zhang and his investors were confident the concerns of the [USG] could be resolved without ByteDance having to spin off TikTok. But things changed quickly after India outright banned the app at the end of June...investors started hearing a different message from the White House”…
@samirsaran Samir Saran on x
“[owners] confident that concerns of the US govt could be resolved without ByteDance having to spin off TikTok. But things changed quickly after #India...banned the app at the end of June.” Need to ban #Huawei- will catalyse others too. #DigitalDragon https://www.washingtonpost.c…
@harrymccracken Harry McCracken on x
There are legitimate concerns here, but this isn't how to deal with them. https://www.washingtonpost.com/ ...
@aallan Alasdair Allan on x
...roll on the lawsuits. I think both Apple and Google will contest this one in the courts, and it'll get held up till after the US election. Whoever wins that will get to decide. https://twitter.com/...
@jchengwsj Jonathan Cheng on x
WaPo: Peter Navarro and Steve Mnuchin had a “knockdown, drag-out” shouting match over TikTok in front of Donald Trump last week in the Oval Office. Navarro urged a total ban on TikTok, calling Mnuchin soft on China for advocating a sale to a U.S. company. https://www.washingtonpo…
@bhuvanbagga @bhuvanbagga on x
“Throughout this year, Zhang and his investors were confident that the concerns of the U.S federal government could be resolved without ByteDance having to spin off TikTok. But things changed quickly after India outright banned the app at the end of June.” https://www.google.com/…
@cairo67unedited Amr Khalifa on x
This isn't an administration, it is a crime family #Trump https://www.washingtonpost.com/ ...
@ajwsmall Andrew Small on x
“Things changed quickly after India outright banned the app at the end of June” https://twitter.com/...
@karaswisher Kara Swisher on x
Peter Navarro knows as much about tech as my mom does. Actually, she knows more. What a lunkheaded menace he is as he ignore the real digital dangers from China: Trump advisers Mnuchin and Navarro fought over the fate of TikTok inside the Oval Office https://www.washingtonpost.co…
@howardlindzon @howardlindzon on x
Hope they were not wearing masks and spitting https://twitter.com/...
@yanaya_e @yanaya_e on x
It's 11:40 am in Beijing. So far today I've used WeChat to: order an emergency shipment of morning beer and cigs, carefully look at pics of my ex without faving them, call my boss to tell him “I'm not feeling well today”, and cancel weekend plans with my friends. https://twitter.…
@wadhwa Vivek Wadhwa on x
TikTok's fate was shaped by a ‘knockdown, drag-out’ Oval Office brawl https://www.washingtonpost.com/ ... Notable how Silicon Valley VCs are puppets of the CCP, have sold their souls and can't be trusted. Also how India's TikTok ban changed the calculus. https://twitter.com/...
@jeffjarvis Jeff Jarvis on x
Soft on China is the new soft on crime is the new soft on communism. https://twitter.com/...
@carlquintanilla Carl Quintanilla on x
“.. Navarro pushed back, demanding an outright ban of TikTok, while accusing Mnuchin of being soft on China, the people said, speaking on the condition of anonymity .. The treasury secretary appeared taken aback, they said” (via ⁦@washingtonpost⁩) https://www.washingtonpost.com/ …
@lindsaypgorman Lindsay P. Gorman on x
It's exactly this type of discord and process explosions with economic & national security decision making in the White House that muddies the US message overseas and makes it extremely difficult to build a multilateral coalition around internet repression. Similar story w 5G. ht…
@jstein_wapo Jeff Stein on x
White House remains seriously divided by how aggressively to take on China - & over TikTok, it led to a “shouting match” in the Oval Trump continues to let Navarro push for more aggressive action - but for now ultimately is deferring still to Mnuchin's more cautious approach http…
@washingtonpost @washingtonpost on x
An Oval Office shouting match over TikTok preceded an executive order that threatens the Chinese social media company's future https://www.washingtonpost.com/ ...

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