Twitter Shows Interest In Buying TikTok

TikTok is in a race against time as it faces a looming presidential ban. Aside from Microsoft, Twitter has also approached the Chinese-owned video-sharing app for a deal to acquire its U.S. operations, a report reveals.

TikTok is in talks with Twitter about a “potential combination,” sources with knowledge about the matter told The Wall Street Journal.

While the deal might be beneficial to Twitter, it is currently unclear whether the social microblogging site will pursue a partnership with the Chinese app due to “significant challenges” that could possibly arise, the report said.

Details regarding the “potential combination” are still unknown at the moment. The value of such a deal also remains to be seen.

Previous reports indicated that Microsoft plans to buy TikTok for up to $30 billion, an amount that might be way too much for Twitter at the moment based on the microblogging site's financial capacity, as per Forbes and MacroTrends.

The social media company will need outside assistance to match the Redmond giant's estimated offer, which can be anywhere between $10 billion to $30 billion.

“Twitter will have a hard time putting together enough financing to acquire even the U.S. operations of TikTok,” Erik Gordon, a professor at the University of Michigan, said, Reuters reported. “It doesn’t have enough borrowing capacity.”

“If it (Twitter) tries to put together an investor group, the terms will be tough. Twitter’s own shareholders might prefer that management focus on its existing business,” he added.

Twitter's size as a company, when compared to Microsoft, however, is seen to be beneficial to the deal in the event that it actually pushes through. Its smaller size means that it won't face the same level of scrutiny when it comes to antitrust issues as Microsoft, Apple and other huge companies.

Microsoft is expected to conclude negotiations within the next few weeks. The company said earlier it had set a mid-September deadline for a potential deal.

The acquisition will mean TikTok will be able to continue operating in the U.S. but directly under a U.S.-based company. Microsoft will have one year to transfer TikTok's code to the U.S. after acquiring it.

For now, TikTok users can start switching to other alternatives so that they can continue creating videos to share with others in the event that the Chinese app gets banned.