Oracle Emerges as Another Potential Buyer for TikTok

A new suitor has emerged in the race to buy the US operations of TikTok, with cloud computing giant Oracle reportedly joining a group of investment firms in formulating an offer for the app.

As reported by CNBC:

Oracle’s talks to acquire TikTok’s operations in four countries are ongoing and have accelerated in recent days, the person said, and it and Microsoft are far ahead of any other companies that have expressed interest.

Those four countries would be the US, Canada, Australia and New Zealand, which, if TikTok is to be cut up and sold off, are believed to be one package of nations that would be separated from the rest.

Which would be a difficult split, leading to various versions of the app operating under different rules and processes, and no doubt TikTok’s current owner ByteDance would prefer to keep the whole platform as one package. But the asking price could be steep, with some reports suggesting that TikTok could be valued at around $30 billion.

That price range puts TikTok out of the reach of all but a few of the tech giants, though it would be lower if TikTok is eventually split into regional elements. But at $30 billion, it’s really only Microsoft that could afford it, and has thus far shown a willingness to make a bid. Oracle brought in $39.5b in revenue in 2019, but its revenue did decline in the most recent quarter.

But then again, Oracle isn’t acting alone here – as reported by the Wall Street Journal last week, several investment firms, including Sequoia Capital and General Atlantic, are looking to formulate group bids to buy the app. Oracle appears to be one of the firms that’s been recruited into these pitches – and that, again, could make the actual, eventual management of TikTok complex, if it’s to be split over a range of ownership groups.

Given the various considerations, you would expect that Microsoft would remain the preferred destination for the app – though as we’ve noted previously, there are several reasons why Microsoft might also want to reconsider buying the app.

Indeed, even internally, Microsoft staff have questioned the potential acquisition, while the Chinese Government is also, reportedly, unhappy at the way in which the White House is looking to force the sell-off of a Chinese-owned app. Microsoft has over 6,000 employees in China, and conducts billions in business deals in the nation every year. Any move to play in part in the TikTok transaction could spark fallout with its Chinese partners.

Given the various considerations, it’s still very difficult to predict what comes next, and which company will eventually take ownership of the short-form video app.

Of course, someone will. If the alternative is to wave goodbye to billions due to a ban in the US, then someone will step in and take over, be it Microsoft, this new Oracle coalition or – at a very long shot – Twitter.

Or, as TikTok has suggested, the company could still take legal action against the US Government’s Executive Order. And if TikTok can win a stay of execution for long enough – say, till after the US Election – the whole situation could look different. Presidential challenger Joe Biden hasn’t made any definitive statements on TikTok and its future in the US, though staff from the Biden campaign have been instructed to delete TikTok from their devices due to security concerns. 

Maybe, if Biden is to become President, the rules set for the TikTok negotiations would be different.

But right now, the clock is definitely ticking.

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