TikTok faces US breakup from Chinese parent as Microsoft circles: sources

The White House is preparing to force Chinese internet giant ByteDance to shed the U.S. operations of TikTok, as potential buyers, including Microsoft Corp , are already in talks to buy the popular short video app, people familiar with the matter said on Friday.

Microsoft is one of the companies that have been in exploratory talks to buy TikTok, one of the sources said. While the Redmond, Washington-based company already owns professional social media network LinkedIn, it would face fewer regulatory hurdles in acquiring TikTok than its more direct competitors, such as FaceBook Inc , the source said.

"We are looking at TikTok, we may be banning TikTok, we maybe doing some other things or a couple of options, but a lot of things are happening," Trump told reporters on Friday. ByteDance has proactively been considering a range of options for TikTok amid pressure from the United States to relinquish control of the app, which allows users to create short videos with special effects and has become wildly popular with U.S. teenagers.

ByteDance acquired Shanghai-based video app Musical.ly in a US$1 billion deal in 2017 and relaunched it as TikTok the following year. ByteDance did not seek approval for the acquisition from CFIUS, which reviews deals for potential national security risks. Reuters reported last year that CFIUS had opened an investigation into TikTok.

In 2018, CFIUS forced China's Ant Financial to scrap plans to buy MoneyGram International Inc over concerns about the safety of data that could identify U.S. citizens.ByteDance was valued at as much as US$140 billion earlier this year when one of its shareholders, Cheetah Mobile , sold a small stake in a private deal, Reuters has reported. The startup's investors include SoftBank Group Corp.

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