If deal is too good to lose Microsoft and TikTok don’t need to make sense collectively.

Basic Points:

• In order to strip the U.S. operations of TikTok for security reasons, the Trump administration is expected to order China-based ByteDance.

• Microsoft is in talks to obtain TikTok’s U.S. operations.

• Even if there are few interactions with the existing company, buying TikTok now could be a valuation takeover for Microsoft.

Microsoft is in talks to obtain TikTok’s U.S. operations.

This doesn’t make a lot of sense for Microsoft tactically, which has been consistently focused on enterprise software under Chief Executive Officer Satya Nadella and has seen its market valuation expand to more than $1.5 trillion because of it.

The U.S. TikTok business should absolutely be tried to procure by Microsoft. Any enterprise with the means to do it should.

Microsoft and TikTok are discussing the sale of only the U.S. operations, according to people accustomed with the matter. TikTok parent Bytedance would still own the rest of TikTok. That’ll limit the rate — but if it happens, this will still be a big deal. It’s indistinct how much TikTok’s U.S. operations would cost, but it was reported by Reuters that TikTok investors value the entire business at $50 billion. Given Facebook today is worth about $725 billion, there’s proof that popular global social networks that can legalize advertising have some major growth likelihoods.

TikTok is enormously positioned to burst from a valuation standpoint. 100 million U.S. people use TikTok. Its huge audience is just now starting to be monetized with advertisements, and curated, targeted, clever short-form video ads are perfect for a younger audience that skips or pays to ignore out-dated TV commercials. Just as TikTok is about to take off financially, ByteDance would be making sales. U.S. President Donald Trump is expected to order ByteDance to deprive the U.S. part of the business for security reasons, which would be unfortunate for the Chinese-based company.

TikTok said, “While we do not comment on rumors or speculation, we are confident in the long-term success of TikTok,” in a statement on Friday. “Hundreds of millions of people come to TikTok for entertainment and connection, including our community of creators and artists who are building livelihoods from the platform. We’re motivated by their passion and creativity, and committed to protecting their privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform.”

The collaborations don’t matter sometimes, if an asset is cheap enough. 51% of NBCUniversal was acquired by CNBC’s parent company, Comcast, from General Electric during the 2009 financial crisis for the now-ridiculously low price of $13.75 billion. The other 49% for $16.7 billion was bought by Comcast two years later.  NBCUniversal posted EBITDA of $8.7 billion last year, which suggested a pre-pandemic valuation well north of $60 billion.

There are no obvious synergies between TV content ad distribution, was stated by Morgan Stanley Vice Chairman Robert Kindler this week. But that doesn’t mean Comcast made a fault buying NBC Universal.

The counterargument is that TikTok could be screwed up by Microsoft. It does have some history spoiling consumer-facing acquisitions, such as Skype and Mixer. But simply bringing in TikTok and letting it do its thing isn’t too complex.

Microsoft does have some buyer-facing products, such as Minecraft and XBox. It wasn’t one of the big four technology companies — Apple, Amazon, Facebook and Google more importantly, that just this week affirmed before Congress about having too much power. Perhaps it should have been. It’s been right alongside Apple as one of the most valuable companies on the planet, for the last few years.

Antitrust considerations likely won’t come into play, if Microsoft sees a window to help the U.S. government score a victory over China. Nadella may be attentive on businesses, but he probably knows a good deal when he sees one.