Partnerships / Acquisitions

Oracle Looks Victorious As Clock Tick-Tocks Down On Deadline For A TikTok Sale

Oracle appeared to win the TikTok “sale or no sale” negotiations Sunday night, as several sources reported it had been chosen over Microsoft for U.S. control of the controversial social media app.

No official statement had been released by Oracle, but Microsoft released a statement earlier in the day that it was out of the running for the ByteDance-owned property. “We are confident our proposal would have been good for TikTok’s users while protecting national security interests,” the statement said. “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. We look forward to seeing how the service evolves in these important areas.”

For most observers Oracle’s deal makes less market sense than the possible Microsoft deal. Microsoft was at least a consumer-facing company. It’s not exactly clear how Oracle, a mostly B2B software company, would integrate TikTok into its current structure. It’s possible that the TikTok acquisition could turn Oracle loose on other consumer-facing internet media companies.

“The company’s (Oracle’s) possible pursuit of a deal for the social network, owned by China’s ByteDance Ltd., makes more sense in light of Oracle’s desire to build up its cloud-computing and consumer-data businesses — and comes into even clearer focus considering Oracle’s close ties to U.S. President Donald Trump and Chairman Larry Ellison’s cheerleading for American tech interests,” said Bloomberg back in mid-August.

The attention now turns to a deadline the Trump administration has set for Sept. 20 for the proposed ban of WeChat, but there has been flexibility on that date. WeChat has emerged as a completely separate issue to TikTok.

The Oracle deal looked to be solid judging from Sunday night’s reports. However, there are still sticking points to be dealt with. The first: The Chinese government is involved at this point in the process. That could be a sticking point for any deal to happen because the Chinese have gone on record saying they prefer no deal and a TikTok shut down in the U.S. But money talks and TikTok owner ByteDance has been negotiating as if it has the authority to approve a deal. It has also felt enough confidence in its sovereignty to file a suit against the executive order that was originally issued on Aug. 6.

It's unclear whether the deal will pass muster, or even when the deadline for such an arrangement is. Trump has publicly talked about a Sept. 15 deadline, but TikTok seemed to operate on a Sept. 20 one (45 days after the Aug. 6 order). Meanwhile, a different Trump executive order seemed to push the deadline to November.

China could also still shut TikTok down in the U.S. Reuters sources say officials don’t want to look weak in the face of Trump’s order, and would rather the app be banned in the U.S. than be sold on his terms. Beijing has said it firmly opposes Trump’s executive orders and on Aug. 28 moved to give itself a say in the process, revising a list of technologies that will need Chinese government approval before they are exported. Experts said TikTok’s recommendation algorithm would fall under this list.

The bottom line is: this is Internet media, where high-intensity properties like TikTok can fly too close to the sun like Icarus and fall back to earth.

“Eventually, inevitably, TikTok will fall from grace, if not by executive ban then by a more ordinary acquisition, or natural decline, or replacement by another, cooler option,” says The Atlantic. “When it does, the addicts and influencers attached to it today will invest all that effort in someone else’s corporate platform, just as the Viners who vanished when Twitter shut down that service did, or the YouTubers who were demonetized, or the Tumblrers who were banned. No matter how liberating or delightful the posts feel, content creators are also puppets of the platform owners, who in turn vie for temporary dominance over one another.”

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