Oracle looks set to acquire the United States operations of TikTok, according to people familiar with the matter, speaking with the Wall Street Journal.
According to the report, the deal will not be an outright sale. Instead, Oracle will be announced as TikTok’s “trusted tech partner” in the U.S. — hopefully doing enough to satisfy security concerns on the part of the White House. Financial terms have not been revealed.
Walmart said Sunday that it is considering joining the group led by Oracle. The retail giant said it is continuing to have “discussions with ByteDance leadership and other interested parties.”
This news follows shortly after doubts were cast about the whole TikTok deal. Late last month, the Chinese government issued new restrictions on the algorithms TikTok users. As the WSJ notes:
“The algorithms, which determine the videos served to users and are seen as TikTok’s secret sauce, were considered part of the deal negotiations up until the Chinese policy change raising questions among the parties involved in negotiations over how to value the social-media business.”
President Trump previously filed an executive order targeting TikTok. It suggested that the app would be banned for security reasons in the U.S. if it could not find a buyer in the country. Oracle chairman, CTO and co-founder Larry Ellison — a.k.a. Steve Jobs’ “rich friend” — is reportedly a notable Trump supporter.
Oracle could be TikTok’s “trusted tech partner”
Oracle was first named as a possible contender to snap up the TikTok U.S. operations in August. It emerged at a time when it seemed all but guaranteed that Microsoft would be the tech giant to emerge triumphant in this deal. Microsoft is now apparently out of the running, having been informed of TikTok parent company ByteDance’s decision.
“We are confident 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 the service met the highest standards for security, privacy, online safety, and combatting 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, in the first quarter of 2020, it registered the best three months of any app ever when it comes to downloads. It currently has around 100 million monthly users in the U.S. That’s an increase from around 11 million in early 2018. It continues to be among the most downloaded apps worldwide.
On the flip side, it’s been targeted by the Trump administration for alleged security concerns. Its CEO also stepped down after just three months. And, as the WSJ points out, the app still loses money.
Source: Wall Street Journal