Microsoft and TikTok need each other - Yahoo Finance

Microsoft (MSFT) is the prime candidate to purchase the social media app TikTok from its Chinese parent company ByteDance.

For Microsoft, the potential deal would be a game changer that could reinvigorate the company’s image among younger users who may not use Microsoft products thanks to competitors like Google’s (GOOG, GOOGL) Chromebooks and Apple’s (AAPL) iPhone and iPad.

The company’s Intelligent Cloud arm, which includes its Azure cloud computing business, pulled in $13.4 billion in fiscal Q4 2020, while its Productivity and Business Processes arm earned $11.8 billion.

But Microsoft’s More Personal Computing business, which includes everything from Windows OEM and commercial products to Xbox and Surface sales is still incredibly important to the company.

In Q4, the business was responsible for $12.9 billion of the tech giant’s revenue, proving that while productivity and cloud services are certainly money makers for Microsoft, the company simply can’t afford to lose its consumer business.

Thill imagines Microsoft integrating TikTok into its Xbox gaming platforms, creating a setup that moves users between the two services.

But TikTok collects the same kind of data as competing social media platforms like Facebook and Twitter.

To that end, the company hired former Disney executive Kevin Mayer as its CEO and has made numerous assurances that the firm isn’t accessing personal data to spy on its users.

But from the look of it, a TikTok owned by Microsoft may be the best solution for both companies.