Oracle is not a consumer-oriented company, but sells its database and cloud systems to large companies and organizations. How BBC News It reportedly provides infrastructure to a number of government agencies, including the CIA, NSA, and Navy and Air Force intelligence agencies. Oracle’s close ties with the US and its co-founder’s friendship with the president will likely mean the likelihood of approval is higher. CNBC While Oracle isn’t interested in becoming a social giant like Facebook, it could try to use TikTok̵
TikTok’s modern history begins in August 2018, when the lip-syncing app Musical.ly was purchased by Chinese company ByteDance for an undisclosed sum of $ 1 billion. ByteDance owns Douyin, a China-only video sharing platform that does similar tasks, albeit with geographic restrictions. After the purchase, Musical.ly was renamed TikTok and became the version of the Bytedance app available in the rest of the world.
ByteDance has spent a lot of money on advertising, and you couldn’t advertise TikTok as the hot novelty until 2019. All of the money was clearly well spent as TikTok apparently has more than 100 million users in the US and has grown by 800 percent since 2018. This puts TikTok at the top level of social platforms, although it lags behind the competitors of Facebook / Instagram and Snapchat.
With sentiment turned against both large tech companies and Chinese-owned tech companies, concern about ByteDance’s leadership is low. It is believed that executives are too close to the Chinese authorities and have censored popular clips containing comments critical of China. Most notably, this included a makeup tutorial that discussed China’s mistreatment of Uighur Muslims in the land that was drawn and banned its juvenile creator. It’s an issue that TikTok resolved in 2020 by preventing China-based moderators from reviewing content outside of China.
TikTok has also been scrutinized in the US amid the greater geopolitical tensions between the US and China. The censorship allegations sparked requests from politicians for a closer look, although recent reports say a private meeting with Facebook CEO Mark Zuckerberg prompted Chuck Schumer and Tom Cotton to sound the alarm via the app. Towards the end of 2019, some key players asked questions about the internal processes, data handling and the general behavior of TikTok.
Since then, the company has recruited the executive who started Disney +, Kevin Mayer, as CEO and tried to deal with growing voices of discontent. Unfortunately, the Trump administration has put pressure on TikTok in recent months, stating that the app will be banned unless ByteDance sells the company to a US company. Since then, Microsoft and then Oracle have thrown their hats in the ring, and the government has set a deadline of September 15 to close the deal. However, this has raised concerns about government interference in a private transaction, and China has announced that it will not abandon this “theft”.
For its part, TikTok has filed a lawsuit against the United States alleging that it has been denied due process and that its treatment was inappropriate. At the end of August, CEO Kevin Mayer resigned and named the “political environment” as the reason for his departure.
As the deadline approached, China began to toughen its negotiations, stating that it may not allow any US company to buy TikTok. According to reports, China would rather shut down the app than appear weak, and wanted to protect the company’s famous algorithm that has interested so many buyers. Yesterday Microsoft and TikTok announced that no agreement would be reached. TikTok reportedly turned down the offer. Instead, it was believed that Oracle – as the remaining interested party – won the bidding war by default, although the deal is not that simple.
It’s not clear what the Oracle ByteDance TikTok deal will look like, especially given the intricacy of the sale. ByteDance must hand over enough material to act in good faith with the US, but not so much as to upset the Chinese authorities. Structuring the business as a partnership can help avoid criticism that ByteDance was forced to sell TikTok under duress. But while allowing the social enterprise to keep much of the secret sauce it has valued so highly.