Oracle appears to be acquiring US operations in TikTok, according to people familiar with the matter, and talking to Wall Street Journal.
According to the report, the agreement will not be a direct sale. Instead, Oracle will be announced as TikTok’s “trusted technology partner” in the United States – hopefully doing enough to satisfy White House security concerns. Financial terms have not been revealed.
Walmart said on Sunday that it was considering joining the group led by Oracle. The store giant said it continues to have “discussions with ByteDance management and other interested parties.”
This news follows shortly after there was doubt about the entire TikTok agreement. Late last month, the Chinese government issued new restrictions on the algorithms TikTok users. Like that WSJ notes:
The algorithms, which determine the videos served to users and are seen as TikTok̵7;s secret sauce, were considered part of the agreement negotiations until the Chinese policy change, and raised questions among the parties involved in the negotiations on how to value the social media business. ”
President Trump previously issued an order targeting TikTok. It suggested that the app would be banned for security reasons in the US if it could not find a buyer in the country. Oracle board chairman, CTO and co-founder Larry Ellison – aka Steve Jobs’ “rich friend” – is reportedly a notable Trump supporter.
Oracle can be TikTok’s “reliable technology partner”
Oracle was first identified as a possible competitor to acquire TikTok US operations in August. It emerged at a time when it seemed to guarantee that Microsoft would be the technology giant that emerged triumphantly in this deal. Microsoft is now apparently out of business, after being informed of the TikTok parent company ByteDance’s decision.
“We are confident that our proposal would have been good for TikTok’s users, while protecting national security interests,” Microsoft said Sunday. “To do this, we would have made significant changes to ensure that the service meets the highest standards of security, privacy, online security and the fight against disinformation, and we made these principles clear in our August statement.”
TikTok has had something of a … mixed year in 2020. On the plus side, it recorded in the first quarter of 2020 the best three months of any app ever when it comes to downloads. It currently has around 100 million monthly users in the United States. This is an increase from around 11 million at the beginning of 2018. It continues to be among the most downloaded apps worldwide.
On the flip side, the Trump administration has been targeted for alleged security concerns. The CEO resigned after only three months. And which WSJ points out, the app is still losing money.
Source: Wall Street Journal