Oracle Won, Microsoft Lost on the bid to Buy TikTok

Oracle Won, Microsoft Lost on the bid to Buy TikTok

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After coming under fire by the Trump administration due to privacy and National Security concerns, TikTok’s US operations were set to be officially banned by the federal government. This sparked an initially bid by Microsoft to TikTok’s parent company, ByteDance, and shortly after another bid from Oracle to purchase the social media video app. The initial interest by Microsoft of purchasing the local segment of the business, triggered President Donald Trump to place a delay on the ban.

UPDATE: Since the original post of this story, Oracle has confirmed that it will be closing a deal with ByteDance for a partnership of TikTok US operations. The White House will have to approve the terms of deal to terminate the pending ban on the social media company.

On Sunday, Microsoft made a brief statement confirming that ByteDance had rejected its offer to buy TikTok’s US operations. This left Oracle as the only other US company that had shown serious interest in negotiating a deal with ByteDance for the US segment of the business.

Microsoft stated:

“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests. 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.”

Microsoft did not give details to what changes of the service it had recommended. Although, the announcement comes after a report from the China Morning Post of last week that indicated that ByteDance was unwilling to sell its highly effective algorithm to a US company. To keep users hooked on the service, an American buyer would have had to rewrite the underlying code that has been so essential to the service’s success. According to the report, ByteDance informed both US officials and bidders of its decision.

The deadline set by President Trump is September 15th for TikTok to closed a deal with a US company, or the ban will take effect. Cutting it very short from the recent revelations from both Microsoft and apparently Oracle. This has been a race since Microsoft made it’s original pitch early August of wanting to buy TikTok’s US business.

According to an article of the The Wall Street Journal it seems that Oracle has been selected as the winner, though as of this writing this has not been confirmed by ByteDance, Oracle or US officials.

The Wall Street Journal adds that “Oracle is set to be announced as TikTok’s ‘trusted tech partner’ in the U.S., and the deal is likely not to be structured as an outright sale.” Several other media sources are also reporting that TikTok plans to move forward with Oracle, though the terms of the deal, and whether it can even be considered an acquisition, remains unclear.

Oracle has not said how TikTok will fit into its existing business strategy or what are its plans for the US business portion.