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News Article

Microsoft’s Proposal Rejected, TikTok Goes With Oracle

By Andrea Villar | Mon, 09/14/2020 - 17:33

After weeks of negotiations, Oracle confirmed on Monday that it is part of a proposal made by ByteDance, owner of TikTok, to the US government to become a technology partner of the Chinese company. Treasury Secretary Steven Mnuchin said the Donald Trump administration received a proposal from Oracle over the weekend to make the TikTok video application a US-based company. The plan will be reviewed this week.

On Sunday, Microsoft confirmed in a statement that ByteDance rejected its proposal to purchase the application. Walmart had also proposed itself as a contender. However, there is no confirmed progress in this negotiation. At the latest by Sept. 20, Tiktok will have to consolidate the sale of its operations in the US. Otherwise, it will have to cease operations there, as according to the Trump administration it represents a risk to the country's national security.

Yet there are still questions in the air. According to The Wall Street Journal, the company headed by Lawrence Ellison has been chosen as a “trusted technology partner” for TikTok, adding that "the deal is unlikely to be structured as a direct sale. Instead, Reuters reported that it would be a restructuring rather than a sale, whereby Oracle would handle the data of users of that social network in the US. While Donald Trump had already expressed his support for Oracle by saying that it was a "big company" that could handle the acquisition, analysts are not sure how the president would view a deal that does not involve a sale of TikTok's operations to a US company. Analysts consulted by the Los Angeles Times believe that a ban on the platform in the US could still be a possible scenario.

TikTok is currently the most downloaded application in the world, with 2 billion downloads and an estimated value of US$100 billion, according to Pitchbook. Currently, Mexico ranks 5th among the countries with more than 19 million active users of TikTok.

Andrea Villar Andrea Villar Journalist and Industry Analyst