Twitter (TWTR) has held discussions with wildly popular short-form video-sharing app TikTok and its Chinese parent company ByteDance about a potential merger, according to a report in The Wall Street Journal. The combination would involve the apps users in the U.S., Canada, Australia, and New Zealand. It isn't clear if the talks have progressed beyond the preliminary stage.
TikTok has more than 100 million users in the U.S., attracted by its easy-to-use video making capability and its intuitive recommendation engine. Such a combination could be a game-changer for Twitter. The company has continued to focus on its short messages, but has struggled to generate consistent revenue growth from its massive user base.
Tech giant Microsoft (MSFT 3.07%) confirmed earlier this month that it has been in talks to acquire TikTok, which is a hit with teens and high-profile celebrities. The app frequently boasts clips of dance routines and lip-syncing that go viral.
With a market cap of just $29 billion, Twitter would face a high hurdle trying to finance such a deal, as TikTok has recently been valued at as much as $60 billion.
Because of a requirement by Chinese authorities that companies within its borders "cooperate" with government security efforts, there have been concerns about the personal data collected from the app's U.S. users.
After continually raising the issue of national security over the past several months, President Donald Trump has given TikTok until September 15 to find a buyer or face a ban in the U.S. Over the weekend, Trump issued an executive order that would forbid any company in the U.S. from participating in any transactions with the TikTok or its parent company.