Good morning. 🏇 I'm back in the saddle after two weeks of much-needed vacation. If you're up early, I'll be talking TikTok and Microsoft this morning on MSNBC in the 6 a.m. PT hour.

📈 Earnings calendar: Monday: Take-Two ... Tuesday: Activision, Disney, Match, Sony ... Wednesday: Discovery, Roku, Sinclair, Sonos, Square ... Thursday: Gannett, News Corp, Nintendo, Uber.

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🎙️ Moving the Market

Satya Nadella gets green light to pursue TikTok deal

Microsoft will move forward with its pursuit of a TikTok U.S. acquisition following a weekend conversation between Satya Nadella and President Donald Trump that appears to have played a part in cooling the president's opposition to the deal.

• "Microsoft will 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 company said last night.

• The proposed deal with would also see Microsoft purchasing TikTok in Canada, Australia, and New Zealand. The company said it may also invite other American investors "to participate on a minority basis."

The big picture: Microsoft's takeover of TikTok would give the Seattle tech giant immediate entry into the social media space and put it in direct competition with Facebook, YouTube and Snap. TikTok currently claims more than 100 million users in the U.S.

• The deal would also divorce TikTok's U.S. business from China, alleviating fears that Beijing might use the service to gain access to American user data.

The backstory: Trump had said Friday that he would "terminate" TikTok's U.S. operations and would not approve a Microsoft takeover, a move that would have been met with significant legal challenges.

• Several of Trump's advisers "were furious" with the impromptu threat and sought to change the president's thinking over the weekend, NYT's Maggie Haberman reports.

• Trump then spoke to Nadella and other Microsoft officials Sunday "after becoming convinced that he was heading off a political issue and solving a security risk."

The latest: Microsoft said last night that it "fully appreciates" the president's concerns and "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."

• Microsoft also promised to "ensure that all private data of TikTok’s American users is transferred to and remains in the United States" and to ensure that any data outside the U.S. is deleted.

What's next: Microsoft described its discussions with ByteDance as "preliminary" and said "there can be no assurance" that a deal will take place. If a deal is reached, it will have to win approval from the Committee on Foreign Investment in the United States.

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📱 Big in the Bay

Why Microsoft wants TikTok

Satya Nadella's acquisition of TikTok could turbocharge Microsoft's consumer-facing business, giving the company ownership of an immensely popular social media app and putting it in direct competition with Facebook, Google, et al, for user engagement.

• "TikTok is supremely positioned to explode from a valuation standpoint," CNBC's Alex Sherman writes. "It is just now beginning to monetize its huge audience with advertisements, and curated, targeted, clever short-form video ads are perfect for a younger audience that skips or pays to ignore traditional TV commercials."

The big picture: "Buying TikTok would mark the boldest in a string of big deals and could reshape a tech giant that has lately thrived by focusing on corporate customers," WSJ's Aaron Tilley reports.

• Microsoft's "Xbox gaming platform is successful... but its search engine Bing has struggled to gain traction against Google. And Microsoft [has] largely abandoned the smartphone business."

The big risk: An acquisition would bring Microsoft into the sights of regulators who are increasingly concerned about "the broad power of the biggest tech companies," says Tilley. "It would also come as social-media companies have drawn increased scrutiny over how they moderate political speech on their platforms."

🇺🇸 U.S.-China Watch 🇨🇳

Secretary of State Mike Pompeo says the U.S. will take action on all Chinese software firms that pose a risk to American security, "a sign that Washington is set to broaden its offensive beyond... TikTok," FT's Aime Williams and Hannah Murphy report.

“President Trump ... will take action in the coming days with respect to a broad array of national security risks that are presented by software connected to the Chinese Communist party," Pompeo told Fox News' Maria Bartiromo on Sunday.

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👍 Moving Menlo

Mark Zuckerberg weathers the ad boycott

"The advertiser boycott of Facebook took a toll on the social media giant, but it may have caused more damage to the company’s reputation than to its bottom line," NYT's Tiffany Hsu and Eleanor Lutz report.

• By the numbers: "More than 1,000 advertisers publicly joined, out of a total pool of more than 9 million, while others quietly scaled back their spending."

• "The 100 [highest-spending] advertisers... spent $221.4 million from July 1 through July 29, 12 percent less than the $251.4 million spent by the top 100 advertisers a year earlier, according to estimates from the advertising analytics platform Pathmatics."

• "Of those 100, nine companies formally announced a pullback in paid advertising, cutting their spending to $507,500 from $26.2 million."

The big picture: The Facebook ad boycott played out more or less as we anticipated it would back in late June, when only Verizon, Ben & Jerry's and a handful of other companies had jumped on board.

Market Links

• Tech's Big Four weather the hearings (NYT)

• Zhang Yiming ups Facebook attacks (CNBC)

• Emily Ramshaw launches "The 19th" (NYM)

• Larry King gets duped into propaganda (RT)

• Bob Iger gets a big Beyoncé bump (Vogue)

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🌴 Moving Moraga

James Murdoch exits News Corp amid family rift

James Murdoch has resigned from News Corporation citing disagreements with its editorial content, a move that comes amid a longstanding rift with his father and brother, Rupert and Lachlan Murdoch, our colleague Claire Atkinson reports.

• In a letter, James attributed his departure "to disagreements over certain editorial content published by the Company’s news outlets and certain other strategic decisions."

The big picture: The resignation widens "the schism that has emerged between James and his 89-year-old father and his older brother... once a dynastic triumvirate that for years held sweeping influence over the world’s cultural and political affairs," NYT's Mike Grynbaum and Ed Lee explain.

• "A political outlier in his conservative-leaning family, James... has sought to reinvent himself as an independent investor with a focus on causes more closely associated with liberals. ... He has also taken public stands against President Trump, who has counted Fox News, a prime Murdoch asset, among his closest media allies."

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📺 Moving Midtown

TV rethinks 'Election Night'

Between the coronavirus pandemic, mail-in voting and the "continuing Trump-era political crisis," the results of the 2020 election are likely to unfold not over the course of one night, but rather several days or even weeks, NYT's Ben Smith reports.

• "I don’t think it’s penetrated enough in the average viewer’s mind that there’s not going to be an election night," Brandon Finnigan, the founder of Decision Desk HQ, tells Smith. "The usual razzmatazz of a panel sitting around discussing election results — that’s dead."

The big picture: "At the highest levels of most news organizations and the big social media platforms, executives and insiders told me that it simply hasn’t sunk in how different this year is going to be — and how to prepare audiences for it," Smith writes.

• "Some particularly wonky journalists are trying to lay the groundwork. NBC’s Chuck Todd said in June that he has been having 'major nightmares' about the election, and his First Read newsletter has been referring to 'election week' instead of Election Day."

• "Mark Zuckerberg... said [Facebook] planned a round of education aimed at 'getting people ready for the fact that there’s a high likelihood that it takes days or weeks to count this — and there’s nothing wrong or illegitimate about that."

What's next: To be determined. Smith says nobody he talked to "had any real idea how cable talkers or Twitter take-mongers would fill hours, days and, possibly, weeks of counting or how to apply a sober, careful lens to the wild allegations... that surface every election night, only to dissolve in the light of day."

🏈 What's next: The NFL season is just over a month away. SBJ's John Ourand goes behind the scenes of the recent negotiations over future media rights.

See you tomorrow.