Software firm Oracle has started talks to barge in Microsoft’s bid to buy the US operations of video app TikTok. The Chinese-owned app’s operations in the country has a more than $20bn valuation.
Microsoft is in talks for a partial buyout of TikTok. The deal pushed through after President Donald Trump told TikTok to sell its US operations in 90 days or shut down. He cited concerns of national security, as the app’s parent company ByteDance has headquarters in Beijing.
Recent reports say Oracle has met with ByteDance. They say Oracle is working with investors, such as big venture capital firms General Atlantic and Sequoia Capital, to rival Microsoft’s deal for the operations in the US, Canada, Australia and New Zealand.
General Atlantic and Sequoia tried to buy a majority stake in TikTok last month. They thought it would save the firm from a forced divesture.
ByteDance drove them back. Their $50bn offer was thought to undervalue the true worth of TikTok. Analysts valued its US operations between $20bn and $50bn at the time.
Microsoft has risen as the odds-on favorite to close a deal. But Oracle’s attempt to seize the deal may boost its data and advertising businesses if they win.
Microsoft and Oracle’s bids are not a complete buyout. They want subsections of TikTok’s operations in English-speaking countries.
Oracle has several advantages in the negotiations. Trump’s 90-day deadline for the sale is on its side. Options for long discussions are limited.
Oracle co-founder and chief technology officer Larry Ellison supports Donald Trump. He threw a fundraising event for his re-election in February. Its connections might give Oracle an advantage.
In early August, the president said that the US should get a cut of proceeds from the deal.
Where the advantage of the buyout lies for Oracle is the question. The firm, owner of the Java software platform, has limited consumer-facing businesses.
The main link between TikTok and Oracle might be in the data-as-a-service business. Oracle offers advertisers and data brokers access to user profiles through acquisitions including BlueKai, Grapeshot, and Datalogix.
Amid the executive order for its sale, TikTok continues to fight for its reputation in the US.
The firm launched on Monday a new information hub. It also created a Twitter account to “correct the record” and answer claims of censorship, surveillance and state control faster.
“With rumours and misinformation about TikTok proliferating in Washington and in the media, let us set the record straight TikTok is not available in China. Its US user data is stored in Virginia with a backup in Singapore and strict controls on employee access. TikTok has never provided any US user data to the Chinese government, nor would it do so if asked. Any insinuation to the contrary is unfounded and blatantly false.”
TikTok provided links to kind remarks from experts in cybersecurity, media and academia.