Oracle said to be in negotiations to buy TikTok

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Technology giant Oracle is said to be in negotiations to buy TikTok, as it seeks to outbid Microsoft in the race to acquire the viral social media platform.

Oracle has held preliminary talks with TikTok’s Chinese owner, ByteDance, and was seriously considering purchasing TikTok’s operations in the United States, Canada, Australia and New Zealand The Financial Times reported on Tuesday.

Oracle has been working with a group of US investors that already own a stake in ByteDance, including General Atlantic and Sequoia Capital, according to the report.

TikTok’s future hangs in the balance after United States President Donald Trump ordered the shut down of the short video app if it is not sold to a US company by mid-November.

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Microsoft has been the front runner to acquire TikTok and said in a blog post last week that discussions were continuing and it aimed to complete a deal for TikTok’s operations in the United States, as well as in Canada, Australia and New Zealand, no later than September 15.

Belinda Barnet, senior lecturer in media at Swinburne University in Melbourne, said an acquisition by Oracle would signal a change of direction for the technology company.

TikTok's future hangs in the balance after United States President Donald Trump ordered the shut down of the short video app if it is not sold to a US company by mid-November.

Kon Karampelas/Unsplash

TikTok’s future hangs in the balance after United States President Donald Trump ordered the shut down of the short video app if it is not sold to a US company by mid-November.

“It is a very strange fit for Oracle,” she said. “Oracle specialises in enterprise systems and customer management systems. Microsoft already has LinkedIn and it has made some inroads into that space, Oracle has never done anything like this before.”

Barnet added Oracle’s founder Larry Ellison seemed to have a closer relationship with President Trump than Microsoft chief executive Satya Nadella.

“A lot of this is about appeasing Trump in America at least and Trump may look more favourably upon Ellison because he is a mate of his,” she said.

The eventual purchaser will face a complex task of extricating TikTok’s systems from ByteDance, Paul Haskell-Dowland, Associate Dean of Computing and Security at Edith Cowan University, said.

“Whoever buys TikTok will be faced with very significant legal and technical challenges as this type of mandate is unprecedented,” he said. “The idea that a US president can dictate a company must be sold, I don’t think we have seen anything like this ever before.”

Haskell-Dowland said it would be very difficult to value TikTok in a forced sale process of a company with no obvious revenue stream.

“Whether it is Oracle or Microsoft that buys it, both are US-based organisations, so the concerns levied by the Australian government and others about the potential for the Chinese Communist Party to use TikTok as a spy platform would shift,” he said. “You are exchanging one set of surveillance power or influence with another. The key difference is with the United States you have the perception that there is more control over access to that data and more safeguards wrapped around it.”

Earlier this month Australian Prime Minister Scott Morrison said there were no plans to ban TikTok in Australia after security agencies found the Chinese company did not pose serious national security concerns.

However, the platform remains under close scrutiny. TikTok is scheduled to appear before the senate committee on foreign interference through social media on Friday.

Oracle, TikTok and Microsoft all declined to comment.

Sydney Morning Herald