TikTokAdriana Lee

TikTok Will Sell to Oracle, Reports Say

Microsoft's officially off the table, making Oracle's purchase of the social video app look like an inevitability.


According to numerous reports breaking over the weekend, Oracle — the technology corporation known best for its database and cloud enterprise solutions — has won its bid to acquire TikTok from Beijing-based ByteDance.

The news arrived Sunday, as Microsoft said its offer to buy the short-video platform was turned down. An official statement laid the decision bare: “ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft,” the company said. The reason for the rejection wasn’t stated, but either way, that leaves Oracle as the last bidder left standing.

The Redmond, Wash.-based tech company had been considered the front runner for weeks. The likelihood of a Microsoft sale prompted Walmart — which was interested in TikTok’s massive Gen Z user base — to engage in talks with the tech giant.

It’s not clear now where an Oracle acquisition might leave the big box retailer.

For months, U.S. officials have been casting Chinese-owned technologies as national security threats. The sentiment culminated in executive orders signed by President Trump last month, which took aim at both WeChat and TikTok — the former has a massive presence in the Chinese market and among Chinese emigrants who rely on it to connect with family and others back in the mainland. The latter has exploded globally, with 800 million TikTok users worldwide, more than 100 million of which are in the U.S.

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Trump’s executive orders forced ByteDance to sell the app by mid-November or leave the American market. Microsoft had been a favorite contender for some GOP senators, as well as Trump, although he later downplayed his support.

“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” Microsoft’s statement continued. “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.”

One key area of interest will be how the ownership would be structured under Oracle. With Microsoft, experts believed that the company would own and run TikTok, minus the core algorithms driving its preference and recommendations engine. That matters, because these algorithms are the “secret sauce” that helps drive high engagement on the platform.

In talking up TikTok’s Fashion Month programming recently, creator Nick Tangorra broke down this appeal for WWD:

“The more time you spend on TikTok, the more it is designed for you and for your better experience.… What do you enjoy watching? Do you enjoy watching fashion? Do you enjoy engaging in music? Do you enjoy comedy? And are you inclined to like and share and comment and watch the video or watch it multiple times? And so you’ll start to see more of that appear on your For You page,” Tangorra explained.

“From a branding perspective, there’s no other social media that I know of where you can download the platform, have zero followers, have zero friendships, connections, and you post and you can possibly wake up the next day to a viral video,” he said, explaining that this is precisely what happened to him. The singer/TikTok creator’s viral video in 2018 carved a path to a fanbase that has grown to 1.2 million followers.

“That doesn’t happen on Twitter. That doesn’t happen on Facebook. That doesn’t happen on Instagram. If you post to nobody, nobody sees it,” Tangorra continued. “But if you post to nobody on TikTok, you still have a chance of being seen.”

ByteDance was apparently ready to sell the business unit, but not the technology that fuels this sort of engagement.

That might have forced Microsoft to either build its own version — which amounts to creating a new social media business from scratch — or “lease” it from the previous owner, keeping the app tethered to the Chinese company. It remains to be seen if Oracle will face a similar conundrum.

TikTok appears to be hedging its bets now. In August, the developer called Trump’s orders unconstitutional and said that it intends to pursue legal action — which means that it may be both bracing for a court fight while entertaining Oracle’s deal.

In other words, when it comes to the story of TikTok, this chapter is not over yet.

Neither Oracle nor TikTok representatives immediately responded to WWD requests for comment.

Update: Oracle confirmed its deal with ByteDance Monday morning, and according to Treasury Secretary Steven Mnuchin, the U.S. government has received the bid.

“Oracle confirms Secretary Mnuchin’s statement that it is part of the proposal by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider,” the company said via statement. The next steps will involve a review by a government panel, which will evaluate the deal for national security concerns.

TikTok also responded to WWD’s request with a statement confirming the submission of the proposal, “which we believe would resolve the Administration’s security concerns. This proposal would enable us to continue supporting our community of 100 million people in the US who love TikTok for connection and entertainment, as well as the hundreds of thousands of small business owners and creators who rely upon TikTok to grow their livelihoods and build meaningful careers.”