with Tonya Riley

Kids love Microsoft, they just might not know it. The 45-year old company known for its enterprise, cloud and productivity products owns the video game Minecraft and game system Xbox, both of which have chugged along under Microsoft’s leadership as distinct brands. 

With news that Microsoft is considering purchasing Chinese-owned TikTok in an unusual brokered marriage that involves President Trump, the question is: Is Microsoft cool enough to for users to stick with the app under it as the owner? Or at least smart enough to treat it just like Minecraft?

Here's a brief history of Microsoft’s cool factor.

When Apple was the underdog, it released entire ad campaigns framing itself as the hip young company and Microsoft as the out-of-touch rival. Much of those sentiments about the two brands linger today.

But Microsoft is okay with that. The Redmond, Wash.-based company has long been marked by unironic enthusiasm. Clippy genuinely just wanted to help you write a letter. Former CEO Steve Ballmer’s manic energy, dance moves and sweat showed he just believed in the company that much. Yes, possibly too much. 

Now under the soothing leadership of Satya Nadella, Microsoft has embraced itself for what it is. A vanilla, highly profitable technology giant that has not had to defend itself in front of Congress recently. 

Influencers know Microsoft isn’t exactly hip.

The TV show Friends had a resurgence in popularity thanks to Generation Z, so it’s not out of the question that some of that same kind of retro-affection could be whipped up for Microsoft. But it could be an uphill battle.

Asked what she thinks of when she thinks of Microsoft, Elma Beganovich, influencer and co-founder of social media marketing agency Amra & Elma said, “Old."

“It’s just a certain type of crowd. More office, serious, the opposite of fun and exciting and new and cool,” said Beganovich. “I think of Bill Gates, whom I very much respect, but I wouldn’t want him to throw me a party or anything.”

Junae Brown, founder of marketing agency Browned 2 Perfection, said she has yet to see Microsoft "purchase a creative company and sustain it well and keep it cool." But she thinks users have other worries on their mind.

"I don't think the users will care," she said. "I think they moreso care if TikTok gets banned."

Ultimately, Facebook’s (not great) reputation may matter more.

On Wednesday, Facebook did what Facebook often does and launched a clone of its competitor. Its new Reels feature in Instagram tries to recreate the TikTok experience, and the company has been paying popular influencers to post to it and build up momentum. 

But many influencers have soured on the brand. Elma Beganovich says the Facebook and Instagram algorithms have made it harder for posts to get views, and that makes newer platforms more exciting. 

Facebook is unlikely to give up easily. Each generation seeks out a new social media home, she says, in part to find their own space separate from their parents. That's why Facebook bought Instagram and is now integrating it more into the main Facebook brand. 

"You have to capture every new generation otherwise you cease to exist as a new platform," said Beganovich.

Brands need loyal customers to survive.

Microsoft is ranked 39 in the upcoming 2020 Brand Keys Loyalty Leaders List, which looks at how much loyalty brands have with consumers (Netflix is number one). Facebook has been slowly tumbling down the ranking for two years, and is now at 41, says Brand Keys president Robert Passikoff. TikTok, a newcomer to the ranking, is buried deep down at 321. 

“Loyalty is ultimately defined by how well the brand meets your expectations,” said Passikoff. And if handled right, TikTok could expand on that loyalty for Microsoft over time.

Microsoft isn't looking for some sort of magical rebranding with the possible TikTok purchase. It's more interested in the apps underlying artificial intelligence technology. But it would benefit from keeping TikTok's passionate fan base. All it needs to do is very little. 

“I don’t know if it matters whether it's cool or not, because I think they’d keep it separate,” said Brian Rafferty, global director of business analytics & insights at brand strategy firm Siegel+Gale. 

But for a second expert opinion, Rafferty asked his tween daughter and TikTok user what she thinks about the potential purchase. She told him, “Microsoft, yeah, sure who cares, as long as they don’t touch it.”

Cat Zakrzewski will return next week.

Our top tabs

Trump issued an executive order banning U.S. companies from transacting with TikTok in 45 days.

He also issued a separate executive order banning transactions with WeChat owner Tencent in 45 days because of national security concerns about the two businesses, Rachel Lerman reports.

The White House alleges both apps could provide the Chinese Communist Party access to Americans' personal and proprietary information for the purposes of espionage. TikTok has denied these allegations in the past. 

The orders come amid a huge crackdown by the White House on Chinese technology. In addition to Trump's threats to ban TikTok, the State Department urged companies this week to ban the download of apps like WeChat. WeChat is used as a messaging app by millions of users across the world in numerous democracies. It’s unclear if the order would prohibit U.S. users from sending messages or making payments using the service, Rachel reports.

The order could be designed to speed ByteDance into a deal to divest its U.S. operations.

“The whole thing strikes me as Trump trying to put pressure on TikTok,” said James Lewis, of the Center for Strategic and International Studies. “I think it’s a big pressure campaign to get ByteDance to move in the right direction.”

TikTok spokesperson Hilary McQuaide said the company is reading the order and will have further comment soon. 

A bill to ban TikTok on federal devices also passed the Senate yesterday. The House already passed a similar bill so it's unclear if the two chambers will need to confer before it heads to the president's desk.

President Trump on Aug. 6 issued two executive orders to ban China-based apps TikTok and WeChat citing national security concerns. (Reuters)

Rant and rave

Experts on China pointed out there are substantial differences between the two apps:

Lindsay Gorman, emerging technologies fellow at the German Marshall Fund's Alliance for Securing Democracy

There are also serious business implications for WeChat's owner. The New York Times's Paul Mozur:

Mark Zuckerberg told employees a ban on TikTok would set "a really bad long-term precedent." 

The Facebook chief executive commented on President Trump's potential ban during an all-staff meeting in which he was asked whether Facebook was interested in acquiring the social media competitor, Ryan Mac and Craig Silverman at BuzzFeed News report.

“I am really worried … it could very well have long-term consequences in other countries around the world,” Zuckerberg said.

India also recently banned the app over national security concerns that the Chinese companies could be compelled to share user data with the Chinese government.

“I certainly think that there are valid national security questions about having an app that has a lot of people’s data that follows the rules of another country, a government that is increasingly is kind of seen as a competitor,” Zuckerberg said.

Zuckerberg also told employees that the company was still figuring out what it would do to rein in posts attempting to call the results of the November election prematurely.

Zuckerberg did not have an answer about what steps the company might take if Trump decides to declare the election results “invalid.”

“This is where we're in unprecedented territory with the president saying some of the things that he's saying that I find quite troubling,” he said. “We're thinking through what policy may be appropriate here. This is obviously going to be a sensitive thing to work through." 

Facebook removed a network of fake Romanian accounts attempting to drum up African American support for Trump. 

The network of 35 accounts, three pages and 88 Instagram accounts racked up more than 1,600 followers on Facebook and more than 7,000 on Instagram, Isaac Stanley-Becker reports.

That’s relatively small as disinformation operations go, but it’s reminiscent of 2016 when Russian trolls targeted Black Americans by posing as Black Lives Matter and other groups on Facebook and Instagram in an effort to reduce voter turnout and sow discord. 

Facebook could not determine what motivated the network, Isaac reports. The network included pages dating back to 2018. They also spread posts touting the QAnon conspiracy theory that “deep state” actors seek to sabotage Trump. 

Facebook also disabled a larger, separate network that spread content critical of the Chinese Communist Party, including accusing it of intentionally spreading the coronavirus.

Facebook banned ads by a pro-Trump super PAC for repeatedly sharing false information. 

Facebook did not say how long the ads from the Committee to Defend the President would be banned, CNN Business's Donie O'Sullivan reports.  

Facebook has exempted politicians from its advertising fact-checking program but not political action committees that operate independently of campaigns.

 "As a result of the Committee to Defend the President's repeated sharing of content determined by third-party fact-checkers to be false, they will not be permitted to advertise for a period of time on our platform," Facebook spokesman Andy Stone said. Stone declined to say what specifically led to Thursday's action. 

Facebook removed ads from the group targeted at Arizona voters falsely suggesting Democrats purged voter rolls and trying to collect data under the guise of voter registration last October.

Workforce report

Shipt shoppers say a tipping glitch is causing their pay to plummet. 

Gig workers for the Target-owned delivery service say that both Shipt and Target have failed to address the issue after months of complaints, Abha Bhattarai and Nitasha Tiku report

“Images of receipts and customer service exchanges with Shipt and Target viewed by The Washington Post show examples in which the tip option was unavailable on the Shipt app or Target.com; instances where tips added by customers were not sent to workers; and changes to the company’s pay algorithm that lowered income, such as changing in-app tipping defaults from 5, 10 or 15 percent to $5, $10 or $15 on certain orders," they write.

Shipt is looking into the source of the problem, which was an internal glitch that affected tips on a small percentage of orders nationwide in June and July, said Molly Snyder, a Shipt spokeswoman. Shipt returned tips on the “few hundred” orders that were affected, she said.

Inside the industry

Snapchat will roll out voter registration tools in September. 

The company will also partner with BallotReady to launch a feature to help users learn about mail-in voting, Axios reports. Snap registered nearly half a million voters in 2018. Facebook and Twitter have rolled out similar features.


Before you log off

The real reason Trump acted against TikTok: