Content creators who create and post short videos on TikTok are concerned about President Donald Trump’s plans to ban the Chinese-owned app that has been a source of national security and censorship concerns. (Aug. 11)
With a Sept. 20 deadline approaching for TikTok’s parent company to shed its United States operations, per an executive order from President Donald Trump, Oracle has apparently won the bidding, according to reports.
The Wall Street Journal, citing anonymous sources, said Oracle won the bidding. Microsoft, which was also in the running for the bid, said Sunday its takeover offer was rejected.
TikTok owner ByteDance told Microsoft it wouldn’t be selling to the company, Microsoft announced in a Sunday blog post.
“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.”
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Like Microsoft, Oracle’s main business is targeted to enterprises, and cloud computing. The company was formed in 1977 by Larry Ellison and other partners. According to Forbes, Ellison is one of the world’s wealthiest men, worth $74.9 billion. He owns Lanai, one of the six main Hawaiian islands. He bought it for $300 million in 2012.
Trump said in announcing his order that he was concerned TikTok was collecting personal information and more from TikTok users and that ByteDance, which is based in China, would be forced to share it with the Chinese government.
TikTok is one of the most popular apps for young people, with over 100 million downloads. In the latest app store charts, TikTok is the No. 2 most downloaded app on the Apple store, and No. 5 on Google Play.
The Trump administration’s Sept. 20 deadline was to announce a plan for the sale, or to be banned in the U.S. by Sept. 29.
TikTok, known as Douyin in China, was developed by the Chinese company ByteDance in 2016. The Beijing-based media and tech company bought the teen-focused social app Musical.ly the following year, and the company merged the two apps in 2018.
Originally a home for wacky music-filled amateur videos, TikTok has rapidly grown its own roster of influencers and attracted stars such as Alicia Keys, Dua Lipa, Justin Bieber, Katy Perry and Snoop Dogg – and built a U.S. audience of 100 million.
Several other big tech companies including Facebook and Google considered a TikTok bid. Enterprise software company Oracle reportedly did make a bid, as reported by The Wall Street Journal, The New York Times and several other outlets.
TikTok has sued to stop the ban, but not the sale order. The sale situation has been complicated by several factors, including Trump’s repeated demands that the U.S. government should get a “cut” of any deal, a stipulation and role for the president that experts say is unprecedented.
In addition, the Chinese government in late August involved itself in the process by unveiling new regulations that restrict exports of technology that appear to include the system TikTok uses to choose which videos to spool up to its users. That means ByteDance would have to obtain a license from China to export any restricted technologies to a foreign company.
The deal had come together rapidly after the administration ramped up its threats against TikTok this summer, despite TikTok’s efforts to put distance between its app and its Chinese ownership. It installed former top Disney executive Kevin Mayer as its American CEO, but he resigned in August after just a few months on the job, saying the “political environment has sharply changed.”
Both Microsoft and Oracle are known more for their business software offerings than for those intended for consumers.
Oracle primarily makes database software. It competes with tech giants such as Microsoft and Amazon that provide cloud services as well as business-software specialists like Salesforce.
Some analysts see Oracle’s interest in a consumer business as misguided. Oracle should focus on enterprise-market acquisitions and not invest in a consumer app like TikTok that doesn’t fit with the rest of its business, said Jefferies analyst Brent Thill, who compares the idea to Delta Airlines buying a motorcycle company. “It doesn’t make any sense,” he said.
Thill suggested that TikTok competitors like Facebook and Snapchat should be “cheering on Oracle” as a buyer, because Oracle wouldn’t “add a lot of value to the app.”
Oracle co-founder Larry Ellison is unusual among tech executives for his public support of President Donald Trump, hosting a fundraiser for him in February at his Rancho Mirage, California, estate. The company also hired a former top aide to Vice President Mike Pence; its CEO, Safra Catz, also served on Trump’s transition team.
The president said on Aug. 18 that Oracle was “a great company” that “could handle” buying TikTok. He declined to state his preference between Oracle and Microsoft as buyers.
Contributing: Mike Snider, Associated Press
Follow USA TODAY’s Jefferson Graham (@jeffersongraham) on Twitter.
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