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TikTok’s potential $588 per user valuation in Microsoft deal

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Re: TikTok’s potential $588 per user valuation in Microsoft deal

#31
post #17

The most interesting thing about this deal outside the obvious political drama in my opinion is that this will change Big Tech landscape overnight. Microsoft has done enterprise so well for so long but has always struggled on 'consumer tech' outside of its Windows OS. Acquiring a social media platform is going to catapault it into the heart of consumer tech. Question is will TikTok be a parallell arm or will it help…

Who created this lie that Microsoft struggled with consumer? Xbox was always consumer and is massive. A huge chunk of the Windows line was always about consumers. The office line straddled both. Hotmail was consumer first.

Not a lie. Any modern-day "success" with consumers from Microsoft has been limited to them riding the coattails of the well-established and decades old Xbox and Windows platforms. Every other Microsoft foray into consumer computing since Xbox has largely flopped (Windows Phone, Windows tablets, Zune, smartwatches, wearables, Skype, Bing, Cortana, etc...)

Even with Windows, which is their most successful consumer product, its success can arguably be attributed to the fact that Microsoft essentially has a 100% market dominance on computers sold under $1,000. Would that product be as successful if it faced competent competition? We really can't say for certain.

Office has historically seen consumer success (however I suspect the rise of G Suite has significantly curtailed that), but that's only because Office has been a necessity if you want to interact with business documents (which are typically .docx and MS Office files).

The common theme here is that, with the exception of Xbox, Microsoft's consumer products only seem to see success when consumers have no other options.

Re: TikTok’s potential $588 per user valuation in Microsoft deal

#32
post #23

I can't believe I'm the first to point this out, but this article is kind of obviously wrong. The analysis in the article is like looking at Tesla on an earnings per share basis, when it's actually heavily priced on forward projected earning potential. Like Tesla, Tiktok is a growth stock. This valuation doesn't reflect its current value per user - it's baking in an implied doubling or trebling of its user base in so…

You're not the first to point this out ;) https://news.ycombinator.com/item?id=24081449

Haha I saw that after I refreshed the page! You beat me to hitting post by a couple of minutes, because I wrote a longer post than you did :)

Re: TikTok’s potential $588 per user valuation in Microsoft deal

#33
post #17

The most interesting thing about this deal outside the obvious political drama in my opinion is that this will change Big Tech landscape overnight. Microsoft has done enterprise so well for so long but has always struggled on 'consumer tech' outside of its Windows OS. Acquiring a social media platform is going to catapault it into the heart of consumer tech. Question is will TikTok be a parallell arm or will it help…

Who created this lie that Microsoft struggled with consumer? Xbox was always consumer and is massive. A huge chunk of the Windows line was always about consumers. The office line straddled both. Hotmail was consumer first.

Zune, Skype, Windows Phone, Kin, Xbox under Don Mattrick, Windows Store, Microsoft Store, Mixer, Band.

What consumer successes has Microsoft had recently other than Surface?

Re: TikTok’s potential $588 per user valuation in Microsoft deal

#34
post #10

Earlier quoted context omitted.

Player or not I hope YouTube take a page from TikTok. Their recommendation algorithm is abysmal (my opinion of course, and the opinion of many people I've talked to; anecdata, but given that I've never heard anyone saying they're hooked on YouTube recommendations, while I've heard tons of people hooked on TikTok's, I'd say there's at least some truth in this claim) and hasn't seemed to improve at all for the past, I…

I think part of what makes TikTok recommendations addictive is that since the content is so short, it's harder to get fatigued by bad recommendations. If I get recommended just a couple bad YouTube videos that are several minutes long even if I abandon partway through, it's easier to give up.

YT recommendations are just dumb, I was listening a music video and it always recommended me some song I disliked, so I hit dislike on the video but YT ignored it. I have no idea why the AI would recommend that video, it was not same genre of music maybe the visuals were similar so maybe their algorithm is biased for visuals and not for genre/content.

Re: TikTok’s potential $588 per user valuation in Microsoft deal

#35
post #10

Earlier quoted context omitted.

>Facebook and Google probably are out because of fear the sale will be disallowed because of their market dominance. Facebook okay, Google is not even a player in social networking unless you are referring to YouTube, since it is a video platform. But I feel, fear of competition laws is not the major delimiter in the whole Tik-Tok sale fiasco; This is state initiated after all.

Player or not I hope YouTube take a page from TikTok. Their recommendation algorithm is abysmal (my opinion of course, and the opinion of many people I've talked to; anecdata, but given that I've never heard anyone saying they're hooked on YouTube recommendations, while I've heard tons of people hooked on TikTok's, I'd say there's at least some truth in this claim) and hasn't seemed to improve at all for the past, I…

From business perspective, yes. It's not like YouTube doesn't know how to do it, it started as a creator focussed platform where people did silly things with their camcorder.

But from a consumer perspective, Please no. We don't need brain numbing, limited attention content flooding the YouTube, it's not like there are no such content already. Artificially prolonged > 10mins content for Ads are the ones featured by YT algorithm, but there are certain gems who make videos purely for telling the world about what they are making in <5 mins videos.

Re: TikTok’s potential $588 per user valuation in Microsoft deal

#37
Could anyone in the 90s and early 00s have imagined that the internet would end up being one big competition for who can monitor and track their users best, just to run the most efficient ads, and that this value would be in the hundreds of dollars per user?

Re: TikTok’s potential $588 per user valuation in Microsoft deal

#38
post #22

This will be Nadella's Albatross. He's been given far too much credit for being a 'nice guy' whilst most operationalising the foundations left for him. He has not done anything fundamental for the company, other than changed the tone of the leadership of the company. He's a good steward. TikTok is completely out of MS cultural reach, and in that way it's a poor fit. Remember Skype? How about IE that ruled the world a…

I'd argue Microsoft does not need a shakeup right now. Much like with Tim Cook & Apple, keeping things humming along nicely is all they need to print lots of cash for the foreseeable future.

I suspect, what will happen with TikTok is they will migrate the company over completely to Windows/Azure products internally, so that it's funneling a good deal of money back to the mothership, then spin it off into a stand-alone company. They'll make a decent profit off this.

This isn't MS's typical strategy, but it's not unheard of either. Since TT doesn't really compete with any of MS's core segments, but it also doesn't compliment any of them, I think this is the most likely scenario.

Re: TikTok’s potential $588 per user valuation in Microsoft deal

#39
post #22

This will be Nadella's Albatross. He's been given far too much credit for being a 'nice guy' whilst most operationalising the foundations left for him. He has not done anything fundamental for the company, other than changed the tone of the leadership of the company. He's a good steward. TikTok is completely out of MS cultural reach, and in that way it's a poor fit. Remember Skype? How about IE that ruled the world a…

Amen. I don't even really understand why most of the commentary surrounding this potential acquisition refers to TikTok as a social network.

TikTok is much closer to a video playback/sharing platform (somewhere between YouTube and Vine) than a social communication platform. Direct messaging isn't even enabled by default, and even in direct messaging you're very limited in what you can send. You can't even send images unless they're already in the TikTok universe.

It just doesn't seem to be any more of a social network than YouTube is. I can perhaps see some possible value in Microsoft acquiring a fulsome social network of some kind, but a faddish YouTube-like platform? It's baffling.

Re: TikTok’s potential $588 per user valuation in Microsoft deal

#40
post #22

This will be Nadella's Albatross. He's been given far too much credit for being a 'nice guy' whilst most operationalising the foundations left for him. He has not done anything fundamental for the company, other than changed the tone of the leadership of the company. He's a good steward. TikTok is completely out of MS cultural reach, and in that way it's a poor fit. Remember Skype? How about IE that ruled the world a…

> This will be Nadella's Albatross.

It certainly has the danger of being like Bayer's acquisition of Monsanto and all the Roundup liability.

TikTok is facing many privacy lawsuits including the same Illinois biometric law problem that Facebook is currently trying to resolve. You'll remember that Facebook attempted a $550 million settlement, but the judge rejected it as being far too little. So now it is $650 million and as far as I've heard the judge has yet to accept or reject it. Facebook has admitted that this lawsuit could potentially cost them up to $45 billion if it goes to a jury.

I've seen commentary that TikTok will try to resolve all the lawsuits quickly so it can be acquired. But Facebook has been trying to settle their lawsuit for 6 months or more, and TikTok doesn't have that kind of time.

There are many out there that certainly must have far more insight into this than me, but I am definitely skeptical about this idea.

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