Oracle finally secures deal to buy TikTok

Faida Yves Moses
Faida Yves Moses
3 Min Read

After weeks of speculation, the Chinese owned social media app has finally struck a deal with Oracle. This comes after Trump’s executive order to ban the app in America was nearing its deadline. However, ByteDance’s choice of Oracle has taken many analysts by surprise. Microsoft was set to be the likely contender but in a turn of events, TikTok announced a partnership with Oracle instead.

What we know about the deal

It is still unclear whether Oracle will take up a majority stake in the social media app. So far, the company hasn’t said anything with regards to the TikTok deal. Reports Indicate that Oracle was endorsed by President Trump Last month as a possible partner. He indicated that he would support any deal between Oracle and TikTok further calling it a “great company”. Oracle has enjoyed close ties with the Trump administration. Its founder, Larry Ellison hosted a fundraiser for Mr. Trump earlier this year and its Chief Executive served on the president’s transition team and is a regular at the White House. Mr. Trump’s endorsement of Oracle has raised concerns that the Chinese government may try to further complicate the deal in retaliation to Trump’s tough stance on China.

What is the likely outcome of the partnership

TikTok has been a remarkable success in America. With this success, it has managed to raise billions of dollars worth of funding from various big name investors Like Softbank, GGV capital and others. This has earned the company a valuation of close to 100 billion dollars. Therefore, a successful venture between TikTok and Oracle could mean huge financial gains for both companies. This will be the first time Oracle is Investing in the field of social media. Some industry analysts are fearing that it may not be a good fit for Tiktok. However it’s too early to predict how the two companies will fare.

Watchdogs have also raised concerns on how Oracle shall serve to eliminate the security threats cited by the US government. With a code developed by programmers in Beijing, TikTok’s current algorithm is seen by Washington as a threat to the US. Oracle is expected to take full control of the code and have the power to dictate what should be included in it. However, this is likely to be the easiest part of the partnership. Right now; Oracle and Bytedance are probably focusing on TikTok’s relevance in the ever changing social media world.

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Posted by Faida Yves Moses
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