As it tries to catch up with the popular features offered by some of its younger competitors, Cisco’s Webex has unveiled virtual backgrounds for its videoconferences. Users can either apply a “blur” effect to mask their background or replace with one of Webex’s preset background images.
Zoom, the most popular videoconferencing app of the moment, and rivals Google Meet and Microsoft Teams all allow users to upload their own custom images for background displays.
Webex is one of the oldest players in the videoconferencing space. It was founded in 1995 and acquired by Cisco in 2007 for $3.2 billion. It’s primarily used as a business application and has a focus on companies, rather than personal customers, but has increased the features available on its freemium version during the current surge in demand for remote meetings.
In recent weeks, Google and Microsoft have started to catch up to Zoom; Microsoft has grown its Teams app to 75 million daily active users, the company said in April. And Google said Meet recently surpassed 100 million daily meeting participants.
Like its rivals, Webex has seen a sharp increase in usage during the coronavirus pandemic with more people working and schooling at home. The company said in April it tripled its average number of meeting minutes to 25 billion.
Why Microsoft wants TikTok
At first glance, a Microsoft acquisition of TikTok seems a little unusual. Microsoft has spent years walking back consumer plays like the Groove Music service, the Kinect Xbox accessory, its Microsoft Band fitness device, Windows Phone, and more recently the Mixer streaming service. Microsoft has been favoring its enterprise software and services, and even Cortana has transitioned to be productivity-focused. How does a service that caters to dancing teenagers fit with Microsoft’s buttoned-up business demographic?
If you dig a little deeper into Microsoft’s future ambitions, though, a move to acquire TikTok’s operations in the US, Canada, Australia, and New Zealand could benefit many of Microsoft’s existing businesses while also setting the company up as a real competitor to YouTube and Facebook.
The key part of any TikTok deal will be the data and users Microsoft gains access to. This is the driving force behind concerns from the Trump administration over TikTok’s potential ties to the Chinese government and how that data might be misused. Microsoft acknowledges the data’s importance in its blog post confirming acquisition talks, noting that “Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States.”
This data could be used by Microsoft in a variety of ways. The software giant has long used Xbox Live to fuel parts of Microsoft Research for future software and hardware projects, and the usage data helps game developers and Microsoft better understand how people use their Xbox. Understanding how people interacted with and used the Kinect accessory for the Xbox ultimately helped Microsoft develop and improve HoloLens, too.
TikTok could help correct a Microsoft blindspot and even influence how other software and services are developed inside the company. Microsoft has all the data it needs on business usage of software, but it hasn’t been successful with pure consumer services in recent years, which has left the company with a gap of insight into consumer behaviors.
That’s particularly relevant when you consider that a large number of young Americans are growing up in an environment dominated by Android, iOS, and Chromebooks in classrooms. With Gmail also dominating consumer email usage and document sharing through Google Docs, it’s possible to grow up in the US without needing any Microsoft software or services. Microsoft missed the mobile revolution and has been playing catch-up ever since, but it doesn’t want to miss an entire generation of future workers.
TikTok gives Microsoft a direct line to millions of youngsters using the app to watch videos and even those who use it to create content. Microsoft has tried desperately to adapt its Windows operating system to be more consumer-friendly with video creation apps, but TikTok offers an easy way for millions to create videos from their phones instead.
Microsoft could take advantage of that direct access to TikTok users with ads for Surface, Xbox, and other products, or even as another base for its game-streaming ambitions. Google is planning to leverage YouTube to integrate its Stadia streaming service, and TikTok would give Microsoft a response with xCloud game streaming. Microsoft had been planning to use Mixer for Xbox game streaming, but the service never gained enough traction, and the company was forced to strike a deal with Facebook for xCloud integration instead. It’s not hard to imagine watching a Call of Duty video on TikTok and then being able to click and instantly play the game as it streams to your phone via Microsoft’s xCloud service.
Microsoft also has broad ambitions for artificial intelligence that go beyond just the workplace. While its initial foray into AI-powered chatbots for consumers didn’t go to plan, Microsoft does need a consumer testing ground for its AI work that goes beyond Office. TikTok already utilizes AI for facial recognition with the app’s popular filters and in the recommendation engine that drives the For You feed. TikTok’s AI feed dictates exactly what you see in the app, and the algorithm improves the more people use TikTok.
TikTok has also been venturing into augmented reality, with both filters and ads that utilize AR. Microsoft’s AR ambitions have been largely limited to its HoloLens hardware, Windows Mixed Reality headsets, and some experiments on mobile with Minecraft. TikTok would be another gateway into the mobile world of AR for Microsoft.
Microsoft doesn’t offer any clues as to how its acquisition could directly affect TikTok features, apart from noting it “would build on the experience TikTok users currently love.” Exactly how Microsoft could operate TikTok in the US, Canada, Australia, and New Zealand is unclear. This leaves large swathes of the world, particularly across Asia and Europe, with a version of TikTok that will potentially have different features to Microsoft’s version.
How Microsoft operates TikTok in the US and beyond will be key to its future success if the company is able to acquire operational control. One of Microsoft CEO Satya Nadella’s first big acquisitions was Minecraft maker Mojang. It has been a huge success, particularly as Minecraft has continued to grow and Microsoft has largely left the Mojang studio to continue to develop the game independently.
Equally, Nadella’s acquisition of LinkedIn for $26.2 billion has also been a success story for Microsoft. The company has been operating LinkedIn separately, with some clever integration points with Office where it makes sense. Microsoft has access to a giant enterprise social network to fend off competition from Google and Facebook in the workplace, and the company continues to dominate with Office as a result.
Even GitHub appears to be a successful acquisition for Microsoft. The software maker has also been operating this business separately, but again, it’s a key point of data for Microsoft to understand how developers are responding to the world’s app needs.
If Microsoft’s TikTok deal is successful, then it’s likely the company will also be run separately. Microsoft’s messy acquisitions of Skype and Nokia’s phone business have been lessons in how not to aggressively integrate businesses. Microsoft is also new to the world of content moderation and the associated headaches that brings, so it’s unlikely Microsoft will attempt to deeply integrate TikTok or re-brand it in any way. Acquiring TikTok in English-speaking countries also helps avoid some of the moderation complexity faced by Facebook and Twitter. Oddly, Microsoft doesn’t list TikTok’s UK operation as a target for acquisition. (The UK, US, New Zealand, Australia, and Canada are also intelligence sharing partners under the Five Eyes alliance.)
Running TikTok separately could allow Microsoft to leverage its all-important data and integration points but also position TikTok as the YouTube and Facebook rival Microsoft has always wanted. Microsoft teamed up with News Corporation and NBC Universal back in 2006 to launch its Soapbox on MSN Video service. It failed to compete with YouTube and was shut down a few years later, leaving Microsoft to adopt YouTube as the primary way it shares its own videos.
Microsoft also experimented with its own social network, Socl, back in 2012 before shutting down the service five years later. Microsoft always understood the potential for Facebook’s growth, after initially investing $240 million in Facebook back in 2007. TikTok is rapidly turning into the next big consumer social media space, acting as a direct competitor to Snapchat, Instagram, and Facebook, both in terms of scale and the features involved in sharing and commenting on videos.
It’s difficult to say exactly how Microsoft’s potential TikTok takeover will progress. It’s an unusual deal for the company, particularly with the US government’s ongoing threats. Microsoft doesn’t typically confirm it’s in acquisition talks before deals are made, and the company’s odd blog post specifically thanks President Trump for his personal involvement. The Wall Street Journal reports that Microsoft’s blog post may have been prompted specifically by allies of the president pressuring the company to acknowledge the deal publicly.
It’s a complex deal, and Microsoft is trapped in it. Owning the network could benefit the company, but if it happens, it would also benefit President Trump, who could claim to have unwound one of China’s stickiest footholds in the US tech ecosystem. And he wouldn’t be shy about highlighting his involvement.
There will likely be more twists and turns in the TikTok talks in the coming weeks, but now that Microsoft has committed to finishing these discussions no later than September 15th, the clock is TikTok-ing.
Microsoft says CEO Satya Nadella has talked to Trump about buying TikTok
In a blog post Sunday, Microsoft said it was “prepared to continue discussions to explore a purchase of TikTok in the United States,” following a conversation between its CEO Satya Nadella and President Trump. It’s the first time the company has confirmed reports it was in talks to acquire the video sharing platform.
“Microsoft fully appreciates the importance of addressing the President’s concerns. 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,” the blog post reads. It adds that the company expects to move “quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020.”
The blog post also says that “the two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets.”
It’s unclear how Microsoft would sever those countries from other areas where TikTok operates, like Europe and Africa. Microsoft also did not commit to undertaking the purchase entirely on its own, saying that the company “may invite other American investors to participate on a minority basis in this purchase.”
President Trump had threatened to ban TikTok in the US on Friday. Trump indicated to reporters that he was ready to sign a document to order the TikTok ban as early as Saturday, either via an executive order or emergency economic powers.
Secretary of State Mike Pompeo mentioned the possibility of a ban as early as July 7th, saying it was “something we’re looking at.” TikTok is a subsidiary of Beijing-based ByteDance, and critics have called out its privacy practices and potential ties to the Chinese government. Pompeo also compared TikTok to Huawei and ZTE, two Chinese companies that have been designated as threats to US national security.
The blog post describes the discussions as “preliminary,” but addresses the privacy concerns, saying the company would “ensure that all private data of TikTok’s American users is transferred to and remains in the United States.
“To the extent that any such data is currently stored or backed-up outside the United States,” the post continues, “Microsoft would ensure that this data is deleted from servers outside the country after it is transferred.”
Microsoft’s US offices won’t reopen until January 2021 at the earliest
Microsoft isn’t planning to fully reopen its US offices until at least January 2021. Sources familiar with the company’s plans tell The Verge that Microsoft has selected January 19th, 2021, as the earliest possible date for its US offices to be open for employees. The software giant is currently planning a “hybrid workplace” for a phased reopening of its offices, and Microsoft has produced a six-stage dial that illustrates the return to normal for employees.
Stage six of the dial will be when offices are ready to fully reopen for employees to return to work. Microsoft’s offices will return to normal operations only when most restrictions imposed during the COVID-19 outbreak have been lifted and health data suggests it’s safe to return.
These are the six stages of Microsoft’s workplace dial:
- Stage 1: closed
- Stage 2: mandatory working from home
- Stage 3: working from home strongly encouraged
- Stage 4: soft opening
- Stage 5: open with restrictions
- Stage 6: open
“In the United States, we have established that the earliest possible date for Stage 6 is now January 19, 2021,” according to Kurt DelBene, Microsoft’s head of corporate strategy, in an internal memo seen by The Verge. “Our goal for Stage 6 is to return to normal operations while being prepared to back off to an earlier stage, if a significant resurgence in the virus occurs.”
We understand Microsoft will adjust and move the January 2021 date back as needed in response to the ongoing pandemic.
Microsoft originally allowed its employees to work from home back in March before enforcing a mandatory work from home policy as the pandemic spread across Seattle. The company is currently in stage two of its workplace dial, which maintains the mandatory work from home order.
Microsoft isn’t alone in its plans to not return to offices until 2021. Google is planning to keep its employees working remotely until July 2021, and Apple employees won’t be returning to offices until early next year. Facebook employees are also allowed to work remotely until the end of 2020, and Amazon is letting employees work from home until January 2021.
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