Home Business Oracle Joins The Race To Acquire TikTok; Giving Microsoft Stiff Competition

Oracle Joins The Race To Acquire TikTok; Giving Microsoft Stiff Competition

Oracle is reportedly in preliminary discussions with TikTok's parent company ByteDance. The company's close ties to the US President might be challenging for Microsoft.

Since the dawn of Trump’s executive order stating TikTok’s ban, the company has been approached by numerous organizations with varied background expertise. Microsoft, the software behemoth is reportedly in advance talks with the ByteDance owned TikTok. Twitter has also expressed interest in the social media company and has held preliminary discussions. Recently, Oracle, the DB giant has joined the race to the acquisition.

Oracle is seriously considering TikTok’s acquisition and has held an initial conversation with ByteDance. Oracle’s move has given a potential competition to Microsoft, as it is the world’s second-largest software company after Microsoft. Additionally, Oracle may have certain advantages over its rival when it comes to pulling off a deal.

Oracle’s edge over its rivals:

Oracle was already working with a group of US investors that already own a stake in ByteDance, including General Atlantic and Sequoia Capital. Last month, Sequoia and General Atlantic even attempted to buy a majority stake in TikTok, in the belief that doing so would relieve the company from a forced divestment. They were rebuffed by ByteDance, as a $50 billion deal offered by them was considered as an underestimation to TikTok’s true worth. However, the valuation is significantly more than what other peer companies like Snap Inc (SNAP.N) are offering. Analysts have pegged the value of TikTok’s US arm alone at anything between $20bn and $50bn.

The company also has support from Trump’s administration. US President Donald Trump said, “I think Oracle is a great company and I think its owner is a tremendous guy, a tremendous person. I think that Oracle would be certainly somebody, that could handle it.” Chairman Larry Ellison is one of the few people in Silicon Valley who has openly supported Trump. In February, the 76-year-old billionaire entrepreneur held a fundraiser for the US president at his estate in Coachella Valley, California. In April, Ellison said, “I support him and want him to do well.” 

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However, it is not yet clear whether the White House is more supportive of Oracle’s approach than that of Microsoft. The connection between the two figures could enable Oracle to negotiate an advantageous price for the company. The reason being Trump administration has shown deep interest in the deal, saying part of the transaction should go to the US treasury.

Additionally, it seems like time is also on Oracle’s side, as on Friday Trump issued a new executive order, which extends the sale deadline from 45 days to 90 days.

How Deal benefits Oracle

Oracle has long strived to find new avenues of growth as Amazon Web Services has governed cloud computing, followed by Microsoft Azure and Google Cloud. In Oracle’s fiscal fourth quarter, revenue declined 6% to $10.4 billion. Even Oracle has a history of being acquisitive but has slowed down on large deals in recent years. Currently, Oracle has no consumer-facing social networking or media business. If Oracle does successfully acquire TikTok, it could use consumer data collected by the social media platform to improve its marketing products.

TikTok’s Take on rumors and misinformation

Despite the executive order, released by President Trump, TikTok has not given up the fight for its reputation in the US. The company launched a new information hub and Twitter account to set the record straight and respond more quickly to allegations of censorship, surveillance and state control.

The company said, “TikTok is not available in China. Its US user data is stored in Virginia with a backup in Singapore and strict controls on employee access. TikTok has never provided any US user data to the Chinese government, nor would it do so if asked. Any insinuation to the contrary is unfounded and blatantly false.” TikTok went on to provide links to supportive remarks from industry experts in cybersecurity, media, and academia.

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Shivani Mittalhttps://www.the-electronics.com/
Shivani Mittal pens down all the prominent business decisions and news. She is a passionate reader and on any other off day, she finds herself immersed in adventurous activities like Trekking and Rock climbing.

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