• Chinese internet users brand ByteDance CEO a ‘traitor’ as TikTok seeks US buyer

    Chinese internet users brand ByteDance CEO a ‘traitor’ as TikTok seeks US buyer

    ByteDance is not backing down from its ambitions to become a global technology powerhouse, even as TikTok loses its largest market India and faces insurmountable challenges in the US. Following months of efforts to sway US regulators and the public, TikTok reluctantly arrived at two concessions: "We faced the real possibility of a forced sale of TikTok’s US business by CFIUS or an executive order banning on the TikTok app in the US," ByteDance founder and CEO Zhang Yiming wrote to employees in a letter on Monday. The TikTok saga is evolving on an hourly basis.

  • Microsoft pursuing TikTok purchase by September 15th, may invite U.S. investors to deal

    Microsoft pursuing TikTok purchase by September 15th, may invite U.S. investors to deal

    Microsoft has posted a statement today on its corporate blog that says it will continue discussions on a potential TikTok purchase in the U.S.. As a part of the statement, it says that it may invite other "American investors" to participate on a minority basis. The company says that this is a result of conversations between CEO Satya Nadella and President Trump. Previous reports and our own digging pointed to the situation being totally in the hands of the White House, with Microsoft willing to make the buy but having roadblocks in the form of Presidential sentiment.

  • Analyst: VOD deal between NBCUniversal, AMC will likely 'dampen movie attendance,' hurt industry
    Yahoo Finance

    Analyst: VOD deal between NBCUniversal, AMC will likely 'dampen movie attendance,' hurt industry

    NBCUniversal and AMC’s historic theatrical deal is groundbreaking for the industry — but it could spell trouble for smaller theater chains across the United States.

  • 3 Top Large-Cap Stocks to Buy in August
    Motley Fool

    3 Top Large-Cap Stocks to Buy in August

    Three large-cap stocks that have helped the market rally in recent months are Facebook (NASDAQ: FB), Comcast (NASDAQ: CMCSA), and Mastercard (NYSE: MA). There was all sorts of worry about advertising revenue as the pandemic got rolling, and Facebook in particular, with its reliance on small business spending, was a focal point. Total revenue grew 11% year over year with the advertising business up 10% to $18.3 billion and "other" (mostly from Oculus) up 40% to $366 million.

  • 3 Top U.S. Stocks to Buy in August
    Motley Fool

    3 Top U.S. Stocks to Buy in August

    Investors who can see past the market volatility and coronavirus dust cloud will find some still-solid local names.

  • Analog Devices Collaborates with Intel on Radio Platform for Addressing 5G Network Design Challenges
    Business Wire

    Analog Devices Collaborates with Intel on Radio Platform for Addressing 5G Network Design Challenges

    Analog Devices Collaborates with Intel on Radio Platform for Addressing 5G Network Design Challenges

  • Will Weakness in Automatic Data Processing, Inc.'s (NASDAQ:ADP) Stock Prove Temporary Given Strong Fundamentals?
    Simply Wall St.

    Will Weakness in Automatic Data Processing, Inc.'s (NASDAQ:ADP) Stock Prove Temporary Given Strong Fundamentals?

    It is hard to get excited after looking at Automatic Data Processing's (NASDAQ:ADP) recent performance, when its stock...

  • Accenture Federal Services Awarded Position on Air Force Contract to Build Modernized and Interoperable Advanced Battle Management System
    Business Wire

    Accenture Federal Services Awarded Position on Air Force Contract to Build Modernized and Interoperable Advanced Battle Management System

    Accenture was awarded a United States Air Force contract to build a modernized and interoperable Advanced Battle Management System.

  • Bloomberg

    Trump’s TikTok Assault Opens New Front in Tech War With China

    (Bloomberg) -- By going after TikTok, the U.S. is expanding a fight against Beijing using Chinese-style restrictions on tech companies in a move that could potentially have enormous ramifications for the world’s biggest economies.The Trump administration’s threat to ban ByteDance Ltd.’s viral teen phenom and other Chinese-owned apps could significantly hamper their access global user data, which is an immensely valuable resource in a modern internet economy. Any U.S. decision, which Secretary of State Michael Pompeo said would come “shortly,” is likely to be followed by a similar pressure campaign that prompted some allies to ban Huawei Technologies Co. from 5G networks.Even if TikTok’s American operations are bought by Microsoft Corp., the episode is the culmination of a bifurcation of the internet that began when China walled off its own online sphere years ago, creating an alternate universe where Tencent Holdings Ltd. and Alibaba Group Holding Ltd. stood in for Facebook Inc. and Amazon.com Inc. It is also splitting many in the industry: Some decry the betrayal of values like free speech and capitalism, while others advocate doing whatever it takes to subdue a geopolitical rival and its pivotal tech industry.“This sets a dangerous precedent for the U.S.,” said Samm Sacks, a fellow on cybersecurity policy and China digital economy at the New America think tank. “We are moving down a path of techno-nationalism.”Washington’s moves underscore how quickly the concept of an internet decoupling is becoming a reality even as the world is still figuring out its consequences. India showed the way when it banned dozens of Chinese mobile apps including TikTok and Tencent’s WeChat, while Australia and Japan are reportedly looking at similar options.At issue is who controls the data --- everything from private details like locations and emails to sophisticated mined information such as personal profiles and online behavior. Like India, Washington worries that TikTok could be funneling that trove to Beijing, potentially undermining national security by building databases on its citizens.Worryingly for Beijing, it’s unclear where the U.S. would draw the line given the extent to which data is essential for companies these days. While Washington’s curbs against Huawei may have some grounds in terms of national security, the argument for banning TikTok is “very weak,” according to Yik Chan Chin, who researches global media and communications policy at the Xi’an Jiaotong-Liverpool University in Suzhou, a city near Shanghai.“It’s not a reasonable argument -- it’s like a blanket ban on Chinese companies,” she said. “How can Chinese companies ever do business in America?”Careful What You Wish ForPresident Xi Jinping may have himself to blame. China has long championed cybersovereignty, shutting out services like Twitter, forcing foreign firms to secure local partners and distributors in areas from mobile games to cloud services, or curtailing investment in areas such as online banking. Microsoft Corp.’s Bing and LinkedIn, which both censor content in China, remain the only major search engine and social network allowed to operate in China.“We should respect every country’s own choice of their internet development path and management model, their internet public policy and the right to participate in managing international cyberspace,” Xi told attendees at a high-profile internet conference in 2015. “There should be no cyber-hegemony, no interfering in others’ internal affairs, no engaging, supporting or inciting cyber-activities that would harm the national security of other countries.”Now it’s China that wants the world to embrace its companies and eschew overly broad interpretations of national security. Chinese Foreign Ministry spokesman Wang Wenbin said Monday the Trump administration “has been stretching the concept of national security without any evidence and only based on presumption of guilt,” and called for it to “create an open, fair, just and non-discriminatory environment for businesses of all countries.”China’s past statements on cyber-sovereignty reflected its weakness at the time, and that view has evolved substantially since then, according to Zhao Ruiqi, vice director of School of Marxism at the Communication University of China in Beijing.‘Split The Internet’“Trump’s move is threatening to split the internet, and this is something the world should avoid,” Zhao said. “Countries should sit down and discuss the limits of national security when it comes to internet governance.”While some of Trump’s actions are regarded to be motivated by re-election considerations, others say going after TikTok has deeper significance. Already the world’s most valuable startup with a price tag potentially of $140 billion, ByteDance and its best-known product epitomizes the can-do spirit of a generation of consumer tech companies that may follow Alibaba and Tencent.By hooking hundreds of millions of addicted youngsters from New Delhi to Denver, founder Zhang Yiming’s shown a cohort of entrepreneurs how a Chinese startup can make it to the big time and someday stand shoulder-to-shoulder with America’s largest corporations. Today, it serves some 1.5 billion monthly active users across a family of apps ranging from social media to games and education.“TikTok symbolizes Chinese tech companies’ ability in algorithms, artificial intelligence and the ability to go viral and gain profits within a short period of time,” said Wang Sixin, a professor at the Communication University of China.Now U.S. restrictions would force a contingent of up-and-coming stars in areas from gaming to livestreaming and media to reassess plans to expand globally just as they were starting to gain traction abroad. While TikTok is the first Chinese-made internet service to succeed globally, there are a host of others close behind.Among the most downloaded Chinese apps over the past 12 months in the U.S. are Joyy Inc. platforms Bigo and Likee and Alibaba’s AliExpress shopping app, according to Sensor Tower. TikTok rival Likee, which also stresses it operates from outside China, this year made the U.S. a top priority for its global expansion, with plans to pour more money and people into the region.Launched in May, short video company Kuaishou’s Zynn has topped U.S. app downloads at times. And WeChat -- used by more than a billion people worldwide --- is popular among the Chinese diaspora and U.S. executives with dealings in the world’s No. 2 economy.If the administration decides data is the key determinant, then even some of the world’s most popular games may get ensnared. Tencent’s Call of Duty: Mobile, co-created by Activision Blizzard Inc., PUBG Mobile and its Supercell subsidiary’s Clash Royale are all popular with Americans.What Bloomberg Intelligence says:Rising global threats to ban Chinese mobile apps, out of security concerns and as retaliation due to geopolitical tensions, may severely hinder the overseas growth of China’s internet firms. Joyy, Trip.com, Tencent, Alibaba and NetEase may face the biggest risks given their global ambitions and relatively high use of their services outside China.\- Vey Sern-Ling and Tiffany Tam, analystsClick here for the research.Like other Chinese entrepreneurs, Zhang must now figure out how to sustain ByteDance’s sizzling pace of growth while largely confined to its own home market. Though ByteDance’s first breakout hit was a news app called Toutiao, it was TikTok that attracted hundreds of millions of users around the world. With 165 million installs, the U.S. is the app’s largest market after India, as well as its most lucrative one in terms of user spending, according to Sensor Tower estimates.It’s a stinging retreat for a company that’s tried to offer a haven for the highest-paid artificial intelligence engineers. Zhang fought to remain independent from the country’s tech triumvirate of Baidu Inc., Alibaba and Tencent, making him a rarity in the industry.Now Zhang may find himself on the wrong side of nationalism in both the U.S. and China. With hashtags about TikTok’s U.S. episode trending on China’s largest microblogging platform Weibo, Zhang hid all his posts from the public after users flooded his account with comments slamming his decision to sell.“Zhang Yiming kneeled fast,” one blogger wrote. “Our country didn’t even have the chance to help him.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Google Invests $450 Million for Stake in Home Security Firm ADT

    (Bloomberg) -- Alphabet Inc.’s Google has agreed to pay $450 million for a stake in security firm ADT Inc. as part of a partnership to create smart-home security products.Google will get a 6.6% stake in newly created Class-B shares of the Boca Raton, Florida-based firm, and ADT will integrate Google’s hardware and services into its products, the companies said in a statement on Monday. ADT shares jumped 49% in pre-market trading after closing at $8.61 in New York on Friday.Both companies will commit an additional $150 million, subject to the achievement of certain milestones, for marketing, product development, technology and employee training, they said.The deal will widen the potential reach for Google’s own smart home devices, led by its Nest offering. ADT focuses on home security products such as electronic security, fire protection, and alarm monitoring services.Google bought Nest in 2014 for $3.2 billion to enter the so-called smart-home market, and the unit has become one of the largest makers of internet-connected thermostats, smoke alarms and locks.However Google pared back the number of companies its Nest devices connect to earlier this year due to privacy concerns. Several residential builders have also stopped buying and installing Nest devices after the internet giant overhauled how Nest technology works with other gadgets.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Music’s Last Best Hope Lies in Live-Streaming

    Music’s Last Best Hope Lies in Live-Streaming

    (Bloomberg Opinion) -- Except for the biggest pop acts, like the Rolling Stones or Rihanna, and a few hot shows like “Hamilton,” musicians have struggled to fill concert halls. But now the entire business of live performance is in trouble, even for the top stars, thanks to the Covid-19 pandemic: theaters and performance halls have been closed since March -- and with social distancing in force, they probably won’t open any time soon.Live performance has been one of the few ways for musicians to make money after cheap streaming services undermined sales of most recorded music. If live performances are off limits, the industry may face its greatest crisis yet.But all may not be lost, provided performers and the businesses they work for are willing to adapt to digital platforms. These electronic venues might even become a part of the industry’s post-pandemic future.Consider the following example: On a recent weekend, I tuned into a concert that renowned cellist Yo-Yo Ma streamed through the Berlin-based classical music platform IDAGIO. The concert program was totally new -- Ma put it together just for this performance. It’s not on YouTube or any other platform -- and like any other live concert, it was visceral, ephemeral and exclusive. Plus, it was somehow deeply personal -- with the cameras zoomed in close, viewers could feel as if they were on stage with Ma himself. A replay was available, but only for the next 24 hours.The economics of this type of event might work out quite well. A ticket to a typical streamed concert costs something like $8. If the artist can reach 10 times as many viewers that way, that matches the revenue brought in by an in-person show that costs $80 a ticket, a price that’s hardly unheard of.(1)And so long as the event is advertised effectively, a 10-fold audience multiplier shouldn’t be difficult to achieve: An online concert can draw viewers from anywhere -- including places that wouldn’t be on a regular tour schedule. And even for people who live nearby, there’s a lot of convenience to being able to listen at home.Plus $8 isn’t nearly as big an expenditure -- about the same as paying to stream a new movie -- so many more people will be able to afford it. And it also means that tuning in to a paid stream doesn’t have to be as much of a production as going to a show in person. If you miss a beat or two, it’s not a big deal. You can listen while you’re cooking, even -- and who wouldn’t want a dinner show featuring the likes of Ma or Mick.For the performers and promoters, there can be cost savings on the production side: streams can be run from small studios rather than performance halls, reducing overhead. For solo acts, this can be done near where the artist lives -- meaning there’s little travel required.The performing arts have been slow to adapt to digital transformation. But now that they’ve been forced to, the benefits are already becoming clear.Digital platforms can even help artists engage directly with their fans. (Ma, for example, took questions submitted over live chat after his performance.) They may also be better at managing and tracking customers to generate sustained interest -- and recurring revenue. And they may have the digital tools to help artists find new listeners, perhaps in the same way that streaming music service Spotify does for recorded content.Other logistical issues will be harder to solve. Streaming a solo performance or a quartet is one thing; convening a full symphony orchestra or the cast of a Broadway musical is another. But it’s possible: Broadway has been streaming high-definition recordings at special events for years.Another unresolved question is pricing. Current approaches mostly seem to be pegged to standard theater pricing models -- either one-off admissions or season tickets. But some, like New York’s Metropolitan Opera, are offering library-like subscriptions more akin to Netflix: your favorite opera on demand.I expect we’ll see further innovation here because, unlike with seats in a concert hall, digital streams have no capacity constraints. Perhaps promoters will start offering unlimited replays for an additional fee -- or packages that make it less expensive to buy additional tickets for related households.Post-pandemic, we may also see hybrid models with performances that are both in-person and streamed simultaneously -- the best of both worlds.To be sure, one risk with all of this is that global access might lead to an even more winner-take-all environment for superstars. If everyone can tune in to the best performers in the world, then they might not bother with a local cover band. But with music distribution over the Internet, at least, the opposite effect has held true as well: the possibility of reaching a wider audience has enabled otherwise niche artists to gain a global following.Whatever the case, the music industry has to adapt the live-performance business to the current reality. Streaming may not have the gravity and sparking acoustics of a performance at Carnegie Hall or the raucous vibe of Madison Square Garden, but it may be the future.(1) Of course, it's not totally clear that’s the right comparison because one stream might substitute for multiple stops on a multicity tour. But even so, the overall multiplier from a worldwide audience is likely to be large.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Scott Duke Kominers is the MBA Class of 1960 Associate Professor of Business Administration at Harvard Business School, and a faculty affiliate of the Harvard Department of Economics. Previously, he was a junior fellow at the Harvard Society of Fellows and the inaugural research scholar at the Becker Friedman Institute for Research in Economics at the University of Chicago.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Here Are the Top 10 Most Popular Stocks on Robinhood
    Motley Fool

    Here Are the Top 10 Most Popular Stocks on Robinhood

    Stocks are America's favorite investment. More Americans believe investing in the stock market is a better option than investing in real estate over the next decade, according to a new study by Bankrate. The commission-free stock-trading platform allows new and experienced investors alike to quickly and cost-effectively invest in their favorite companies.

  • 3 Dividend-Paying Tech Stocks to Buy in August
    Motley Fool

    3 Dividend-Paying Tech Stocks to Buy in August

    The S&P 500 (SNPINDEX: ^GSPC) is near breakeven in 2020, but the tech-heavy Nasdaq (NASDAQINDEX: ^IXIC) has crushed the broader market, gaining about 18%. Under the watchful eye of Satya Nadella, who took the helm at Microsoft (NASDAQ: MSFT) in early 2014, the company has enjoyed a striking renaissance. The company has become a cloud leader in just a few short years and continues to give Amazon Web Services (AWS) a run for its money.

  • Big Tech Faithful Shouldn’t Ignore Antitrust Risk

    Big Tech Faithful Shouldn’t Ignore Antitrust Risk

    (Bloomberg Opinion) -- Monopoly power is a good gig if you can get it. The trouble is keeping lawmakers from knocking on your door. Tech titans Apple Inc., Amazon.com Inc., Facebook Inc. and Google parent Alphabet Inc. managed to do just that until last week, when a House subcommittee summoned the chief executive officers of the four companies. Lawmakers took a dim view of the tech giants’ grip on their respective industries. “These companies as they exist today have monopoly power,” said Representative David Cicilline of Rhode Island, who leads the House investigation into the companies. His prescription: “Some need to be broken up, all need to be heavily regulated.” The sentiment appeared to be shared widely.As a matter of public policy, the issue is relatively straightforward. Monopolies are trouble, which is why antitrust laws are designed to stop them. They have the power to raise prices and thereby stifle demand. They often turn into big, lazy, unwieldy bureaucracies that have little incentive to innovate or look after customers, workers and suppliers. And perhaps most problematic, they can use their money and influence to seize political power, making it more difficult to dislodge them.   There’s little disagreement that Apple, Amazon, Facebook and Google pose such a threat. Apple controls nearly half the U.S. smartphone market and dominates the distribution of apps; Amazon all but controls e-commerce; Facebook rules social media; and Google  has a firm grip on internet search and online advertising. It’s difficult to overstate their power. The four companies make up just 0.8% of the S&P 500 Index by number, and yet they account for 6.1% of its total revenue, 8.9% of its earnings and 16.8% of its market value. For investors, the issue is a bit more complicated. Monopolies are impregnable money-minting machines, so everyone wants a piece of them. It’s no accident that Apple, Amazon, Alphabet and Facebook  are four of the seven biggest companies in the world by market value. Nor is it surprising that their profits have trickled down to shareholders. An equal investment in the four tech giants since Facebook — the youngest of the bunch — went public in 2012 has produced a return of 31% a year, including dividends, more than double the return from the S&P 500 over the same period.  It turns out they’re not alone. Stocks of highly profitable companies tend to beat the market. Shares of the most profitable 30% of U.S. companies, sorted on return on equity and weighted by market value, outpaced the S&P 500 by 1.6 percentage points a year from July 1963 through June, according to the longest data series compiled by Dartmouth professor Ken French. And they did so with roughly the same amount of volatility as the broad market, as measured by standard deviation, a common proxy for risk.Astonishingly, the odds of capturing this profitability premium favored investors regardless of the holding period. Shares of the most profitable companies outpaced the market 65% of the time over rolling one-year periods, 76% of the time over three years, 83% over five years and a whopping 93% over 10 years, counted monthly.But markets aren’t supposed to work this way. You shouldn’t be able to reliably beat the market using widely available information without taking more risk. One explanation for the profitability premium is that investors are rubes: They don’t pay attention to profitability when picking stocks, or worse, they errantly favor less-profitable companies, allowing more cunning investors to exploit their mistakes. That seems unlikely. Profitability has long been a key feature of security analysis. More recently, there has been a proliferation of indexes, and funds tracking them, that pick or weight stocks based in part on profitability. And as the market value of Apple, Amazon, Alphabet and Facebook show, their shares are hugely popular.  A more plausible explanation is that the profitability premium is compensation for the risk that today’s profits will evaporate tomorrow. Highly profitable companies rarely maintain the same level of profitability. More often, competition squeezes it away or, as in the case of Apple and its cohorts, the competition is crushed or acquired, resulting in greater market share and profitability but also inviting lawmakers and regulators to step in.Microsoft Inc.’s antitrust entanglement with the government in the late 1990s is instructive. Bill Gates and Paul Allen founded the company in 1975, and by the early 1990s, most personal computers ran Microsoft’s operating system, first MS-DOS and then Microsoft Windows. In August 1997, the company became the second largest in the U.S. by market value, behind only General Electric. A year later, in May 1998, the U.S. Department of Justice and 20 U.S. states sued Microsoft, accusing it of attempting to illegally protect and extend its monopoly by undermining competitors. By the time the case was argued in early 2001, much of the evidence against Microsoft had spilled into public view. Although profits continued to grow, the legal and regulatory scrutiny around the company clouded its future, and shareholders paid the price. The stock returned a negative 4% from May 1998 to December 2000, even as the Nasdaq Composite Index and the S&P 500 returned 33% and 23%, respectively, over the same time. Several months later, a federal court found that Microsoft had violated federal antitrust laws.  As it turned out, of course, Microsoft has maintained its status as a tech powerhouse. Today, its market value is second only to Apple among U.S. stocks, and shareholders who stuck with the company through its antitrust battles have been richly rewarded. Microsoft has returned 27% a year since it went public in 1986, compared with 11% and 10% a year for the Nasdaq and S&P 500, respectively. But that was far from a foregone conclusion when Microsoft was in the government’s crosshairs. And if lawmakers, regulators or prosecutors muster the will to go after Apple, Amazon, Facebook or Alphabet, their shareholders should prepare for more paltry returns and perhaps worse. For now, investors don’t seem worried that the tech titans are in danger. All four of their stocks were higher after the hearing than before. And all four companies reported financial results that beat analysts’ expectations a day after the hearing, no doubt emboldening their shareholders. Still, Big Tech’s faithful should bear in mind that monopolies are only as durable as a government that tolerates them. The profitability they enjoy, and the skyrocketing stock prices that accompany it, are no free lunch. They’re payment for the risk that lawmakers are more serious about breaking up or regulating the tech titans than investors seem to believe.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • ByteDance CEO ‘Working Overtime’ To Devise TikTok Solution

    ByteDance CEO ‘Working Overtime’ To Devise TikTok Solution

    (Bloomberg) -- ByteDance Ltd. is exploring all possibilities to resolve an intensifying confrontation with Washington, Chief Executive Officer Zhang Yiming said, stressing the world’s largest startup has made no final decision on options like a sale of TikTok U.S. to Microsoft Corp.Beijing-based ByteDance has come under pressure from the White House and U.S. lawmakers to sell off its U.S. TikTok operations and now has a 45-day deadline on negotiations with Microsoft over such a deal. The company had tried to appease regulators -- who worry about its data collection and potential connection to the Chinese government -- by distancing its domestic operations from the popular video app, hiring nearly a thousand staff in the U.S. and appointing Walt Disney Co. veteran Kevin Mayer as TikTok CEO. But Zhang said efforts so far to assuage Washington’s concerns may have fallen short.“The current geopolitical and public opinion environment is becoming more and more complex. We are facing great external pressure in some markets,” the founder told employees in an internal memo. “Our team in response has been working around the clock and overtime in the past few weeks to strive for the best outcome.”Read more: With Deadline Set, Microsoft, ByteDance Still Have to Talk PriceAs TikTok surged to global popularity, American officials began calling for a national security investigation into the app. The Committee on Foreign Investment in the United States, or CFIUS, which investigates overseas acquisitions of U.S. businesses, last year opened a review of the Musical.ly purchase that led to TikTok’s creation.“Even though we’ve repeatedly stressed that we’re a privately-run business, and despite our willingness to adopt even more technical solutions to allay their concerns, CFIUS still believes ByteDance has to sell the TikTok U.S. operation. We do not agree with this decision,” Zhang wrote. “We’ve always firmly protected the security of users’ data, the platform’s independence and transparency.”Acknowledging that ByteDance is in negotiations with another tech firm, without naming Microsoft directly, the CEO wrote that the company is still engaged in internal discussions and no final decisions have been made. “The attention of the outside world and rumors around TikTok might last for a while,” Zhang said.(Updates with additional CEO quotes from third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Microsoft Tries to Salvage Deal to Buy TikTok, Appease Trump

    Microsoft Tries to Salvage Deal to Buy TikTok, Appease Trump

    (Bloomberg) -- In a bid to salvage a deal for the U.S. operations of TikTok, Microsoft Corp. Chief Executive Officer Satya Nadella spoke with President Donald Trump by phone about how to secure the administration’s blessing to buy the wildly popular, but besieged, music video app.Microsoft in a blog post Sunday confirmed talks to buy TikTok’s operations in the U.S., as well as in Canada, Australia and New Zealand, and said it’s aiming to complete the deal no later than Sept. 15.The software giant’s public statement follows closed-door discussions with TikTok and Trump, who floated plans for an outright ban of the app on national security grounds and publicly lambasted the idea of a deal late Friday night. The companies now have 45 days to hash out a plan acceptable to all parties, a deadline insisted on by the White House, according to people familiar with the matter. The two companies have not yet worked out key details for a deal, including price, according to people familiar with the matter.TikTok has become a flash point among rising U.S.-China tensions in recent months as U.S. politicians raised concerns that parent company ByteDance Ltd. could be compelled to hand over American users’ data to Beijing or use the app to influence the 165 million Americans, and more than 2 billion users globally, who have downloaded it. The app also drew ire from the U.S. president after anti-Trump activists used the platform to disrupt campaign activities.In its blog post, Microsoft pledged to add more security, privacy and digital safety protections to the TikTok app and ensure that all private data of Americans be transferred back to the U.S. and deleted from servers outside the country. The company also said it may invite other American investors to take minority stakes in the company.“Microsoft fully appreciates the importance of addressing the President’s concerns,” the company said. “It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.”TikTok, Hong Kong and More U.S.-China Flashpoints: QuickTakeIf a deal goes through, it would mark a dramatic intervention by the U.S. government in private enterprise and alter the global technology landscape. It would hand Microsoft a much more prominent role in social media and online advertising -- and threaten to end an era of globalization in the tech industry.Microsoft’s statement didn’t explicitly say whether Trump would approve an agreement and forgo a TikTok ban, though Microsoft would likely make such a public pronouncement only if it thought that would be forthcoming. Microsoft’s shares rose more than 4% in Germany.A TikTok spokeswoman declined to comment, while the White House didn’t immediately respond to a request for comment. Bytedance is committed to becoming a global company and strictly abides by local laws, the TikTok owner said in an online statement Sunday.The blog post from Microsoft came after a weekend of tense negotiations that lasted late into the night among Microsoft, TikTok and the White House, as well as a string of appearances on Sunday morning cable shows by U.S. politicians trying to sway the President’s decision.Factions within the administration and Congress have split into two camps: Those that want to keep the wildly popular music video app in operation by delivering it into the arms of an American company, and those that want to ban the app altogether in the U.S. because of TikTok’s Chinese roots. The latter would send a message to China that the U.S. too can also block internet companies from operating on its shores like China does with Facebook, Twitter and Google.TikTok was launched in the U.S. more than two years ago, following Bytedance’s 2017 purchase of lip-synching app Musical.ly, which it folded into TikTok. The app became a social-media hit in the U.S -- the first Chinese platform to make such inroads.As TikTok surged to popularity, officials began calling for a national security investigation into the app. In November 2019, The Committee on Foreign Investment in the United States, or CFIUS, which investigates overseas acquisitions of U.S. businesses, opened a review of the Musical.ly purchase.TikTok has repeatedly rejected accusations that it feeds user data to China or is beholden to Beijing, even though ByteDance is based there. It spent months trying to distance itself from its Chinese roots. It hired its first American CEO in June, former Walt Disney Co. executive Kevin Mayer, as well as dozens of D.C. lobbyists. It announced plans for a new global headquarters outside of China and said it was considering other organizational changes to satisfy U.S. authorities.After the coronavirus pandemic strained relations between the U.S. and China further, the anti-TikTok rhetoric grew louder. In June, Secretary of State Mike Pompeo and Trump both floated a possible ban of the app, suggesting there could be real action behind the China hawks’ words.In response, ByteDance’s venture investors, including Sequoia Capital, urged company founder and Chief Executive Officer Zhang Yiming to head off any U.S. government action by selling a majority stake in TikTok to them, people familiar with the matter told Bloomberg News in July. At first, Zhang was reticent to give up control, but Bytedance feared an outright ban in the U.S. and the loss of a multi-billion business, according to people familiar with the deliberations. India instituted a ban on TikTok, which quickly devastated its business there.Zhang relented and got on board with selling a majority stake to U.S. investors, but it turned out that arrangement wasn’t sufficient. Administration officials didn’t want to leave the company’s Chinese founder with even a minority stake or for ByteDance’s long-time venture capital allies to have a majority stake in the company, these people said.Meanwhile, Microsoft and TikTok began preliminary deal discussions. Talks beginning in July involved Nadella, Microsoft Chief Financial Officer Amy Hood and President and Chief Legal officer Brad Smith, the people said. Erich Andersen, TikTok’s general counsel -- who spent 25 years at Microsoft, including working for Smith before joining TikTok this year -- was also involved in the conversations.At that point, ByteDance was facing increasingly dire threats in the U.S. Proposals by the company intended to assuage U.S. regulators concerns about TikTok had fallen short and the company was running out of time and options, one of the people said. On Monday, Zhang told employees in a memo that ByteDance, while disagreeing with Trump’s decision, is exploring all possibilities and working round the clock to resolve its intensifying confrontation with U.S. authorities.Over the weekend, Sec. Pompeo said the Trump administration will announce measures shortly against “a broad array” of Chinese-owned software deemed to pose national-security risks, suggesting the actions may go beyond the one Chinese app. In a late Friday night missive, Trump told reporters: “As far as TikTok is concerned, we’re banning them from the United States.”TikTok has hired almost 1,000 people in the U.S. this year and will be employing another 10,000 into “great paying jobs” in the U.S., a company spokeswoman said in a statement. The business’s $1 billion creator fund also supports people in the country who are building livelihoods from the platform, she added.“TikTok U.S. user data is stored in the U.S., with strict controls on employee access,” she said. “TikTok’s biggest investors come from the U.S. We are committed to protecting our users’ privacy and safety.”The purchase of TikTok’s operations in the U.S. and the three other countries, should it be concluded, would represent a huge coup for Microsoft. The world’s largest software company would gain a social-media app that has won over young people with a steady diet of dance videos, lip-syncing clips and viral memes. The company has dabbled in the lucrative sector, but hasn’t developed a popular service of its own. Microsoft acquired LinkedIn, a job-hunting and corporate networking company, for $26.2 billion in 2016.A deal would vault Microsoft into the social media and advertising markets dominated by Facebook Inc. and Google. Microsoft once paid $6.3 billion for Internet ad company aQuantive, the largest deal ever for the company at the time. The effort failed and the company ended up writing down almost the whole value of the deal and then selling its remaining display ad business to AOL in 2015.Microsoft has a search ad business but it declined 18% last quarter. With no consumer social media app, Xbox and Minecraft are pretty much its sole attention-getter among younger users. TikTok would help bolster that business, though it would also push Microsoft to confront controversial areas it has mostly avoided, such as censorship and disinformation.Buying TikTok would give Microsoft “a crown jewel” in consumer social media at a time when Facebook and Google are under massive regulatory scrutiny over antitrust concerns, said Wedbush analyst Daniel Ives in a research note.Microsoft, which briefly employed Zhang, is an American company but it’s also deeply embedded in China. Bing and Linkedin, which both censor content in China, remain the only major search engine and social networking platform allowed to operate in China by U.S. companies.Microsoft and TikTok now have 45 days to hash out a price, terms, how Microsoft would pay for the unit, or how any technology-sharing or transfer of assets of the video-sharing app would work. Deal negotiations may be complicated by tensions between ByteDance investors eager for a big payout for the popular app and Microsoft executives who view themselves as a white knight rescuing a troubled business. The Trump administration could also throw a wrench into the process at any point.An outpouring of support for TikTok and anger against President Trump spread across the Internet in recent days as users displayed outrage with a potential U.S. ban on what’s become one of the most popular media companies in America. Videos with the hashtag ban had more than 620 million views by Sunday night on TikTok.“This is what Trump gets for planning to ban Tiktok,” wrote one user on TikTok named @rainbownursesarah, flashing to a video of a sparsely-packed stadium at a Tulsa, Oklahoma Trump campaign rally that TikTok users sought to disrupt in June.Free speech advocates also piled on against the idea of banning any kind of Internet service, regardless of its owner.“Banning an app that millions of Americans use to communicate with each other is a danger to free expression,” said Jennifer Granick, surveillance and cybersecurity counsel at the American Civil Liberties Union. “Shutting one platform down, even if it were legally possible to do so, harms freedom of speech online and does nothing to resolve the broader problem of unjustified government surveillance.”(Updates with ByteDance’s founder’s memo from the 19th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Accenture Completes Acquisition of PLM Systems
    Business Wire

    Accenture Completes Acquisition of PLM Systems

    Accenture completed the acquisition of systems integrator PLM Systems.

  • HSBC's Split Personality Is Dragging It Down

    HSBC's Split Personality Is Dragging It Down

    (Bloomberg Opinion) -- HSBC Holdings Plc can’t seem to get a break. Even the financial-market boom that buoyed profits at some banks wasn’t enough to save Europe’s biggest lender from missing estimates. Chief Executive Officer Noel Quinn said HSBC is looking at accelerating restructuring plans that are expected to lead to the loss of 35,000 jobs. He may need to think even more radically.The bank reported second-quarter adjusted pretax profit fell 57% from a year earlier to $2.59 billion, versus an estimate of $2.94 billion. HSBC lifted its projection for loan losses to between $8 billion and $13 billion for this year, as it contends with the economic impact of the Covid pandemic. The shares fell as much as 4.7% in Hong Kong trading, reaching their lowest since the depths of the global financial crisis in 2009.Shrinking its workforce can’t fix the geopolitical headwinds the bank is facing. Headquartered in London but focused on Asia, HSBC is trapped between the demands of the U.K. and U.S. on one side and China on the other. With relations deteriorating and little prospect of an improvement, it may be time for the bank to consider separating its Asian business from the rest.HSBC appears to have few allies in government. British lawmakers criticized the bank for showing support for China’s national security legislation in Hong Kong, while U.S. Secretary of State Michael Pompeo attacked what he called “corporate kowtows.” At the same time, toeing China’s line appears to have won HSBC scant reward in Beijing. The Communist Party’s People’s Daily newspaper published an opinion piece last week saying the bank was an accomplice of the U.S. in the arrest of Huawei Technologies Co. Chief Financial Officer Meng Wanzhou and fabricated evidence against the company. HSBC has denied the allegations. The attacks have helped to drive the slump in HSBC’s Hong Kong-traded shares this year. They have lost 45%, far exceeding the 13% decline in the city’s benchmark Hang Seng Index.HSBC’S London and Hong Kong listings serve largely different investor bases. That alone might argue for some form of separation. As Bloomberg Intelligence analyst Jonathan Tyce says, the bank could look into withdrawing from one of the markets. “We suspect that, as with many U.S. global tech companies, HSBC may choose to wait and see if a change in the U.S. presidency in November will ease this threat, but longer term, dual-listing will probably be reassessed,” he said. A more fundamental shift would be to spin off the non-Asian business, creating two companies with separate management teams and perhaps listings. That might give HSBC a better chance of satisfying government and legal expectations in different parts of the world. At present, the bank faces being caught between conflicting demands of the national security law and potential U.S. sanctions against Chinese officials involved in imposing the legislation on Hong Kong.There is a precedent. In early 2017, McDonald’s Corp. sold most of its Hong Kong and China business to a tie-up between state-owned Citic Ltd. and U.S. private equity firm Carlyle Group LP. Yum! Brands Inc., meanwhile, owner of the KFC and Pizza Hut brands, spun off Yum China for a separate listing in November 2016.These changes appear to have insulated the companies against anti-American sentiment fueled by worsening trade tensions between China and the U.S. Yum China has outperformed its former parent since the spinoff. The prospect of Microsoft Corp. buying TikTok’s U.S. operations shows how the world is growing accustomed to the idea of sensitive businesses being carved into separate spheres of influence with different owners.A side-benefit of splitting the Asian business might be to shift its domicile back to Hong Kong. That would enable the more-profitable regional unit to resume dividend payments, which HSBC was forced to cancel earlier this year at the behest of U.K. regulators. That decision angered HSBC’s legion of small shareholders in Hong Kong and has contributed to the stock’s underperformance this year.Such a restructuring might face considerable regulatory hurdles. Quinn called the last few months the most challenging in living memory. Without radical change, HSBC may remain stuck between a rock and a hard place. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • TikTok Could Become Microsoft's Deal of the Decade

    TikTok Could Become Microsoft's Deal of the Decade

    (Bloomberg Opinion) -- Let’s get something clear upfront: Microsoft Corp.’s purchase of TikTok isn’t worth $50 billion. That’s my opinion. But then again, it’s not my money.(2) Some investors in its parent company, ByteDance Ltd., think it’s worth that much, according to a Reuters report last week. Good for them. We’ll soon find out its true value, and more importantly, that of Microsoft’s chief executive officer.After a weekend of speculation, the American software giant came out Monday morning, Beijing time, to confirm talks to buy the short-video sensation that boasts more than 100 million users in the U.S. alone.The opening line of the blog statement notably said: “Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump.” This came after after  Trump had suggested that he may ban TikTok from the U.S. altogether.ByteDance, TikTok’s Beijing-based owner, wasn’t mentioned until the third paragraph. I don’t want to downplay the importance of founder Zhang Yiming or his executive team, who have done a fabulous job of building a powerhouse of an internet company, but this deal already transcends them.Nadella is the kingmaker now.The architect of Microsoft’s transformation from PC operating systems to cloud computing, he’s already overseen some big deals. Within a year of taking over as CEO in 2014, he bought the Swedish games company behind Minecraft; later, he closed the $24 billion purchase of professional-network site LinkedIn Corp.An earlier idea to have TikTok, or at least the U.S. operations, spun off and bought by existing ByteDance investors looked good on paper. But it likely wouldn’t have allayed U.S. concerns about data privacy and Chinese control given how opaque the ownership structure would be afterward.As my colleague Tae Kim wrote, a TikTok-Microsoft deal makes sense because it could allay antitrust concerns just days after four other tech CEOs were grilled by members of Congress. I also think it might solve the issue of data transparency by putting the U.S. operations of TikTok in the hands of a trusted, publicly listed American company. Microsoft thinks so, too, outlining how it would transfer and protect user data. The company "would ensure that all private data of TikTok’s American users is transferred to and remains in the United States,” it said. Any such data currently stored outside the U.S. would be deleted from servers overseas, it continued.But first, Microsoft will need to convince the U.S. administration. The company indicated which buttons it’s pushing, mentioning in its statement — before it even named ByteDance — both the U.S. Treasury Department and the Committee on Foreign Investment in the United States.Some U.S. lawmakers are already on board. “Win-win,” Senator Lindsey Graham wrote on Twitter. His fellow Republican John Cornyn and others looked ready to sign off, too.It’s not really up to Congress, but their support adds important political momentum to the deal. Democrat Senator Richard Blumenthal is among those more cautious, noting that such a transaction “should not distract us from the need to crack down on insidious spying & surveillance” by Chinese companies.It’s quite likely other names will pop up as potential suitors, leaked by bankers or ByteDance insiders in the hope of building the illusion of a bidding war. But Microsoft has the credibility and strategy to get a deal past the real gatekeepers in Washington, leaving ByteDance with few other options.The onus is on Nadella to get it done, and quickly. Microsoft said it will complete discussions by Sept. 15.Now let’s look at what’s for sale.ByteDance itself had revenue of $17 billion last year with profits of $3 billion. But that’s the entire company, with a stable of at least 20 apps — including Douyin (the local version of TikTok) and news feed Toutiao. According to The Information, TikTok’s revenue last year was around $300 million globally — that’s less than 2% of an entire company which CB Insights lists as the world’s top unicorn at $140 billion in value. This year, TikTok is aiming for $500 million in sales in the U.S., The Information reports.According to Microsoft, it’s looking to buy operations in the U.S., Canada, Australia and New Zealand. Throw in a little extra for the three smaller markets and some upside, and we’re looking at maybe $700 million in annual revenue this year, $1 billion if we’re lucky. India and the U.K. were not mentioned. These are crucial omissions, given that Britain is also a key Five Eyes security partner and far larger than both New Zealand and Australia, while India is TikTok's largest potential market but was banned after a recent border clash.Facebook Inc. shares trade at 9.6 times sales and Twitter Inc. at 8.5 times sales. Sure, TikTok is growing more quickly, but so was Snap Inc., that once-hip social media app which had an initial public offering in 2017 and posted 590% revenue growth the year before it listed. Snap now trades at 16.5 times sales, and has yet to post an annual profit. The idea that TikTok — without the U.K., India or dozens of other emerging markets — is worth $50 billion today is fanciful. ByteDance’s leadership can be sure that Nadella knows it, too. He has a fiduciary duty to his own shareholders to squeeze TikTok’s owners as hard as possible.After finessing regulators and stroking egos to get this deal done, Microsoft will rightfully expect a big discount. The size of which will prove Nadella’s worth and make this the deal of the decade.(1) For the record: I think the business Microsoft is bidding for is worth closer to $20 billion. That's not to say this will be the transaction price, though.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • With Deadline Set, Microsoft, ByteDance Still Have to Talk Price

    With Deadline Set, Microsoft, ByteDance Still Have to Talk Price

    (Bloomberg) -- Microsoft Corp. and ByteDance Ltd., with about six weeks to work out a final deal for the software giant to buy TikTok’s operations in the U.S., have yet to agree on most terms, including what could be contentious negotiations over price.A Sept. 15 deadline was put in place at the insistence of the White House, according to people familiar with the matter, who asked not to be named because the talks between the companies and the Trump administration are private. Microsoft and ByteDance haven’t agreed on a price, terms, how Microsoft would pay for the unit, or how any technology sharing or transfer of assets of the video-sharing app would work, these people said.After discussions between U.S. President Donald Trump and Microsoft Chief Executive Officer Satya Nadella this weekend, the two companies now believe they have the blessing of the American government to proceed to more formal and specific talks, the people said. U.S. officials haven’t commented on timing for the decision.Talks began in July and involved Nadella, Microsoft Chief Financial Officer Amy Hood and President and Chief Legal Officer Brad Smith, the people said. Erich Andersen, TikTok’s general counsel -- who spent 25 years at Microsoft, including working for Smith before joining TikTok this year -- was also involved in the conversations. At that point, ByteDance was facing an increasing likelihood of a ban on TikTok in the U.S. The Trump administration has threatened that step, and the Committee on Foreign Investment in the U.S. has been reviewing ByteDance’s 2017 purchase of Musical.ly, TikTok’s progenitor. Proposals by the company intended to assuage U.S. regulators’ concerns about TikTok had fallen short and the company was running out of time and options, one of the people said.Negotiations may be complicated on one side by ByteDance investors eager for a big payout for the popular app, and on the other by Microsoft viewing itself as a white knight to TikTok as time dwindles to avoid a ban. The Trump administration could also throw a wrench into the process at any point.Though Microsoft said in a blog post Sunday that it may invite other American investors to participate in the deal, the company doesn’t necessarily need additional backers, one of the people familiar said. The main point of the statement was to note that any investors must be located in the U.S., two people said.Microsoft declined to comment beyond its statement. A spokeswoman for TikTok also declined to comment.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Dow Jones Today Boosted By Microsoft-TikTok Talks; Varian Soars On Siemens Deal; Incyte, Co-Diagnostics FDA News
    Investor's Business Daily

    Dow Jones Today Boosted By Microsoft-TikTok Talks; Varian Soars On Siemens Deal; Incyte, Co-Diagnostics FDA News

    Incyte paced the Nasdaq, Microsoft led the Dow Jones, and stock futures rose as global markets rallied on strong manufacturing data.

  • TheStreet.com

    TikTok Stokes Trump's Nationalistic Fervor for No Good Reason

    Are U.S. politicians really rocking to Lil Uzi Vert's Futsal Shuffle, and worried their efforts will fall into Chinese hands?

  • Earnings, Microsoft set to boost Wall Street as investors await stimulus

    Earnings, Microsoft set to boost Wall Street as investors await stimulus

    Microsoft <MSFT.O> rose 2.7% before the bell as it said it would push ahead with talks to acquire the U.S. operations of Chinese-owned TikTok after President Donald Trump reversed course on a planned ban of the short-video app. Drug distributor McKesson Corp <MCK.N> gained 4.6% after raising its full-year earnings forecast, while Tyson Foods Inc <TSN.N> rose 0.9% on topping quarterly profit estimates.