USA officials have said TikTok poses a national risk because of the personal data it handles. TikTok has become a flash point among rising U.S.
Republican senator Lindsey Graham commented: "What's the right answer?"
In recent years, Microsoft has taken a hands-off approach to integrating new acquisitions, said Mike Vorhaus, chief executive of Vorhaus Advisors, a digital media consulting firm. In a commentary published by the Wall Street Journal, critics say Microsoft should reject Trump's demand, because it would set a unsafe precedent of seizing foreign investment through law enforcement departments, opening the door for other countries to treat American companies in the same way. "TikTok would immediately give Microsoft consumer content credibility while moving the company more squarely into Facebook's territory and thus opening up a potentially substantial advertising revenue stream", said Dan Romanoff, an equity research analyst at Morningstar.
US President Donald Trump reversed course on a plan to ban the app when American tech giant Microsoft announced plans to partially acquire TikTok's business.
"I actually understand (the criticism)", Zhang said in the letter. The name is hot, the brand is hot.
"I did say that if you buy it, whatever the price is that goes to whoever owns it, because I guess it's China essentially".
U.S. President Donald Trump on Monday said that he would shut down TikTok in the United States unless it finds an American buyer by September 15. "A lot of people in Washington may roll their eyes at Trump's off-the-wall proposals, but we shouldn't underestimate their simplistic appeal to many voters".
As part of the deal, Microsoft said that it would own and operate TikTok in the US, Canada, Australia and New Zealand, providing TikTok users with the experience they "currently love" while adding "world-class security, privacy and digital safety protections". He also said that some "key money" would have to be paid to the US Treasury Department for making the deal possible. "These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed".
Beijing will not accept accept the "theft" of a Chinese tech firm and could take measures against Washington if the latter forced the proposed acquisition, China Daily said in an editorial early this week. "Yet the White House has found no evidence indicating violation of any regulations by the Chinese company".
Chinese foreign ministry spokesman Wang Wenbin said: "Stop politicising economic and trade issues, stop abusing the concept of national security and stop pursuing policies of discrimination and exclusion".
ByteDance founder Zhang Yiming has told employees there were misunderstandings on Chinese social media about TikTok's situation in the United States and that the company could face more difficulties as anti-Chinese sentiment rose overseas. TikTok and Douyin share some of the code that drives the video platform's recommendation engine, which WSJ described as the "secret sauce" that makes TikTok so addictive for users.
However, Trump's short-sighted behavior may harm American companies eventually, experts say.
"We're not planning on going anywhere", she said.
He said the national security grounds for the US's clampdown on Chinese firms "does not hold water", adding that the companies conduct their business activities in accordance with worldwide rules and United States laws.
He told staff to "anticipate more difficulties in the future" and said anti-China sentiment has recently "risen significantly in many countries".