After a tumultuous few weeks, the future of hit social video app TikTok in the United States could soon become more clear, but it might not be the end of the saga.
The company has selected a buyer for its U.S., New Zealand and Australian operations, and the choice could be announced as early as Tuesday, according to a report by CNBC on Monday morning. Microsoft and Walmart, which said last week that they are teaming up on a bid, appear to be the front-runners. The reported purchase price is between $20 billion and $30 billion.
Oracle is also among the companies bidding for TikTok.
However, a new move by the Chinese government could complicate the deal. A newly updated export list would require TikTok’s China-based parent, ByteDance to receive the approval of the Chinese government before transferring assets to the winning bidder.
The Trump administration has set a Sept. 15 deadline for reaching an agreement to continue TikTok’s U.S. operations. President Trump is threatening to ban TikTok in the U.S., citing suspicions that ByteDance is sharing user data with the Chinese government.
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In the fall of 2016, Angela Bolger ordered a replacement battery for her HP laptop for $12.30 through Amazon Prime. Once it arrived at her San Diego home, she popped it in and then noticed a weird sound.
She flipped the laptop to her ear, then back over to her lap, and then “it suddenly exploded like a bomb, flaming melted battery shrapnel went everywhere. My bed was on fire, my floor was on fire, my room was like a warzone.”
Bolger used a pillow to try to smother the flames, later realizing she was so severely burned she had to spend weeks in a hospital’s burn unit and required extensive skin graft surgery for her arms and legs.
“My hands and feet were charred and blistered beyond belief,” Bolger, a previous marathon runner, said. She told her story virtually, her voice laden with emotion, to California state lawmakers during a committee hearing last week.
California’s Senate is expected to vote on a bill this week that, if passed, would be the first of its kind in the nation to hold Amazon and other online marketplaces strictly liable for defective third-party products sold on their websites, and give people like Bolger a method of recourse for defective products that isn’t reliant on the courts.
Supporters say the measure is crucial to leveling the playing field for brick-and-mortar stores that are already liable for such products. But critics say that the bill places an unnecessary burden on small businesses and startups with tighter budgets to address such issues and compete while already under tremendous strain during a global pandemic.
The measure, AB 3262, authored by Assemblyman Mark Stone (D, Santa Cruz) has already passed the state Assembly with a 54-14 vote.
Bolger found that neither she nor Amazon could reach the Chinese company who sold her the defective battery and that though Amazon gave her her money back, and later warned users, it never did accept responsibility. She sought out recourse in the court system, which has, so far, handled such cases in one-off fashion.
California’s 4th District Court of Appeal ruled this month in Bolger’s case that Amazon can be held strictly liable for defective products sold to Californians via third-party vendors on its ecommerce site.
Amazon has argued that it shouldn’t be held liable because it did not distribute, manufacture or sell the product. But the court noted that Amazon had made itself a crucial part of the supply chain, utilizing its warehouse, staff and materials to ship the product.
The idea, “is to ensure that when a product is sold in California, and someone is injured, that there is a remedy,” Stone said.
Online marketplaces have “significant competitive advantage” over local, brick-and-mortar stores in communities and are leaving California consumers “in the lurch,” Stone added.
The Internet Association, a Washington, D.C.-based lobbying group that represents Amazon and other internet companies, urged the state Senate to reject the measure.
“This law couldn’t come at a worse time, as businesses still reeling from the pandemic have turned to online marketplaces, large and small, to reach customers, sell their products, and keep the lights on, said Dylan Hoffman, the association’s director of California government affairs, in a statement to dot.LA. “Now is not the time to fundamentally alter the rules or increase costs for online commerce.”
Weekdays helps parents connect with caregivers and teachers to provide for small groups of kids. (Weekdays Photo)
With K-12 schools reopening now and over the coming weeks, parents are facing a COVID-driven misery they’d hoped was behind them: a return to remote schooling.
Challenging at any age, school-from-home is particularly tough for preschool to elementary kids. Zoom meetings hold their attention briefly, if at all. The exercise of tracking, completing and turning in assignments in various subjects, sometimes spread across online platforms, requires adult help.
“It was really, really difficult,” said Lauren Sato, CEO of Seattle’s Ada Developers Academy and mom to a 6-year-old son who did remote kindergarten in the spring. “An adult had to be with him the whole time to log on to sites and do tech troubleshooting and to keep him engaged.”
Weekdays providers can offer outdoor education to groups of 2 to 8 kids, generally families that have decided to create safe, inner circles with each other. (Weekdays Photo)
As parents confront the reality of managing remote learning in some combination of work-from-home, work outside of the home, and running a household, many families are considering “microschools” or “pandemic pods.” The basic idea is pooling small groups of kids and families into a COVID inner circle to provide an educational boost as well as needed childcare.
Washington Gov. Jay Inslee on Wednesday urged schools to pursue remote learning, advising that it would be unsafe for students to return to the classroom across most of the state, including schools within local tech hubs such as Seattle, Bellevue and Redmond. Nationwide, school districts in cities including Los Angeles, Miami and Chicago are teaching online.
Seattle-based startup Weekdays is one of the multiple tech companies hustling to fill this need, offering services to make it easier for instructors and families to find each other and establish microschools. The company, which launched publicly in March and is a spinout of Madrona Venture Labs, initially focused on childcare but pivoted to microschools for kids preschool-age to fifth grade.
“Over the last four months, childcare and education has changed more abruptly than it has in the last 100 years,” said CEO Shauna Causey. “Everyone is reeling.”
Microsoft President Brad Smith speaking at Seattle’s Town Hall in 2019. (GeekWire Photo / Kevin Lisota)
Microsoft president Brad Smith once described the delicate “balance that we try to strike” when working with the Trump administration. He was referring to the tightrope act of partnering with the federal government one day, and suing it the next, during a Town Hall event in Seattle that I moderated last year.
“Politics is often about pragmatism and not principle alone,” Smith said during the Seattle event.
And now that pragmatism is on full display as Microsoft — a company best known for enterprise software and cloud computing — weighs the politically-charged purchase of social media giant TikTok.
Perhaps no tech company has navigated the bizarre political landscape of the past four years as deftly as Microsoft. Consider:
It won the lucrative $10 billion Joint Enterprise Defense Infrastructure project from the Pentagon, outfoxing rival Amazon in D.C.It has largely avoided the latest antitrust drama, even though Microsoft’s market value has swelled to more than $1.5 trillion.And most recently it emerged as the surprise bidder for TikTok’s business in the U.S. and other key markets, a wild twist that’s resulted in direct negotiation between Microsoft CEO Satya Nadella and President Donald Trump. (Breaking form with his predecessors, the sitting president is actively intervening in the acquisition deal. He said Monday that the negotiations must be finalized by Sept. 15 and provide “a very substantial portion” of the sale price to the U.S. Treasury).
What’s driving this unusual path for Microsoft? And where will it head next?
Microsoft’s government work stretches back decades, providing the software tools and cloud computing capacity to power everything from law enforcement to transportation infrastructure to court systems. Even while providing those services, Microsoft — largely under the direction of Smith — established a reputation as the tech industry’s moral compass. It was the wise elder among younger upstarts like Facebook or Twitter or even Amazon.
But Microsoft’s amicable relationship with the Trump administration is now raising eyebrows.
Tech journalists and other followers of the industry criticized Microsoft for holding closed-door negotiations with the Trump administration and allowing the federal government to reach so deeply into the TikTok deal.
M.G. Siegler, a former tech reporter and general partner at Google’s VC arm GV, said Microsoft “should be ashamed for playing along with this farce in any way.” He said Microsoft’s blog post on Sunday parroted Trump talking points, calling it a “huge black eye.”
Trump “demanded propaganda in order to win a deal,” Siegler tweeted. “Kiss the ring. Bend the knee.”
Others also sounded off:
The view from Microsoft is that a bad process that will lead to the good outcome re TikTok. But I keep thinking about Trump saying Microsoft should pay the Tresasury because he’s forcing a sale, and this “bad process” seems like a legit danger to democracy https://t.co/DMNHiWaWd1
— nilay patel (@reckless) August 3, 2020
Is no one else disturbed my @Microsoft having some sort of deliberation with Trump about buying @tiktok_us?! This is not the way that’s supposed to work.
— Charles M. Blow (@CharlesMBlow) August 3, 2020
The deal is far from a sure thing. Microsoft is negotiating the purchase of TikTok’s service in the U.S., Canada, Australia, and New Zealand, planning to own and operate the service in those markets if it can reach an agreement with ByteDance.
It will be a busy August for Microsoft as it works to close the TikTok deal and awaits the Pentagon’s latest decision in a legal dispute over the Joint Enterprise Defense Infrastructure project. Microsoft beat out rival Amazon and won the $10 billion cloud computing contract, surprising many who saw Amazon as a shoo-in for the project. Amazon sued the federal government, claiming that Trump’s personal animus toward the company improperly impacted the outcome of the contest.
The lawsuit is on hold while the Pentagon reviews aspects of Microsoft and Amazon’s bid. The department plans to “do a re-announcement of our intentions to award,” by the end of August, according to Pentagon CIO Dana Deasy.
Some speculate that by helping the federal government avoid the messy, complicated process of banning a global social media brand, Microsoft could improve its chances for JEDI and other federal contracts.
“Bailing the government out like this probably helps their government contracts on some level,” said former Zillow CEO Spencer Rascoff, speaking with CNBC Tuesday about the potential deal.
If both the JEDI and TikTok deals work out in Microsoft’s favor, the company will gain a major foothold in the federal government’s transition to the cloud and gain the fastest-growing social media platform.
BigStock Photo
Bigstock Photo
Weekdays helps parents connect with caregivers and teachers to provide for small groups of kids. (Weekdays Photo)
Weekdays providers can offer outdoor education to groups of 2 to 8 kids, generally families that have decided to create safe, inner circles with each other. (Weekdays Photo)
Microsoft President Brad Smith speaking at Seattle’s Town Hall in 2019. (GeekWire Photo / Kevin Lisota)