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TikTok Opportunity Too Good to Pass Up

  • Oppenheimer & Co. Inc.
  • August 17, 2020

Although social media is outside Microsoft's wheelhouse, the deal may be too enticing to pass up, but many questions remain.

TikTok presents a unique opportunity for Microsoft, and an acquisition will likely be the cornerstone of a new consumer strategy. However, there is not much visibility on what that strategy will be or what the acquisition could look like. More importantly questions such as "who owns the algorithms? what geographies? management?" need to be answered.

woman looking at phone

There are major risks including execution and integration, heightened political pressures with China, new competitive threats like Facebook, plus Microsoft could lose focus on its core enterprise-cloud business. Regardless, TikTok is likely too good of an opportunity to pass up.

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