The potential sale of TikTok could realign the tech industry, with Oracle and others vying for control. This move may shift power in the global tech landscape, highlighting TikTok's vast influence and the complexities of geopolitical and regulatory challenges.
We delve into the groups and individuals who are currently considered potential buyers or investors in TikTok.
As the dust settles on the tumultuous saga of TikTok’s fate in the U.S., Oracle has the potential to unmistakably come out ahead.
In 2020, with strategic assistance from the federal government, Oracle not only snatched the coveted cloud storage contract from Google but also secured a substantial 12.5% stake in TikTok.
This arrangement positions Oracle to manage the data of American TikTok users on U.S. soil, bolstering efforts to shield personal information from potential Chinese government access.
It's a matter of time to see whether this strategic position is a commercial advantage and possibly most technically suited to take over the tiktok platform for that US market.
This shift could represent a significant realignment in the tech world, transferring one of China’s most successful international ventures into American hands.
Industry analysts are already speculating about the financial implications of this transfer. eMarketer forecasts that Meta could seize between 22.5 to 27.5 percent of TikTok’s U.S. ad revenue, potentially boosting its revenue by over $2 billion by 2025, with Google also set to gain a significant share.
This echoes the pattern observed in India, where bans on TikTok led to a surge in users for Instagram Reels and YouTube Shorts.
Jasmine Enberg from eMarketer and Bhaskar Chakravorti from Tufts University note that while platforms like Reels and Shorts are not perfect replacements, they have served as sufficient alternatives, benefiting from shifts in user bases post-TikTok bans.
The implications of a potential TikTok ban extend beyond direct competitors. Snapchat’s Spotlight and Amazon’s TikTok Shop are areas where shifts in user behaviour could redistribute market advantages.
Additionally, Damian Rollison points out that TikTok and Instagram are outpacing Google in certain demographics for business searches, indicating a shift in how younger consumers interact with technology.
The current legislative manoeuvres, while aimed at curbing foreign influence, ironically stand to bolster domestic tech giants such as Meta and Google, potentially at the expense of market diversity.
Ironically, the move comes at the same time that the Biden administration is suing Meta, Google, Amazon and Apple for monopolisation of their respective markets.
Meta in particular has defended itself by pointing out the competition it faces from TikTok.
Evan Greer, director of the nonprofit Fight for the Future, argues that Congress’s efforts would have been better directed toward privacy and antitrust laws rather than a bill that targets a single company.
“Banning TikTok without passing real tech regulation will just further entrench monopolies like Meta and Google, without doing anything to protect Americans from data harvesting or government propaganda,” Greer said.
There could also be implications for online search and the businesses that rely on it for advertising, noted Damian Rollison, director of market insights for the marketing platform SOCi.
He said the company’s analysis finds that TikTok and Instagram have recently surpassed Google as the go-to sites for young people searching for businesses online.
The intersection of foreign policy and commercial law is not a novel occurrence, with recent events demonstrating how new legislations are not only reforming business operations but also deeply influencing consumer behaviours and ownership structures within democratic nations.
This trend has been particularly evident in the case of India, where the TikTok ban marked a significant shift in both market dynamics and digital content creation.
The ban followed a severe diplomatic and military clash along the India-China border in June 2020, which drastically soured relations between the two countries and led to an abrupt cessation of TikTok operations in India, alongside several other Chinese apps.
The Indian government justified the TikTok ban by citing major concerns over privacy, national sovereignty, and security, suggesting that Chinese apps posed significant threats.
This move was broadly endorsed across India, where sentiments against Chinese products had been inflaming due to the deadly military encounters.
Such governmental decisions, while rooted in national security, also reflect broader attempts to dictate the terms within open market systems under the guise of democratic values.
Post-ban, the digital landscape in India witnessed a significant migration of content creators to platforms like Instagram Reels and YouTube Shorts.
According to Bhaskar Chakravorti, dean of Global Business at Tufts University’s Fletcher School, although creators were forced to rebuild their audiences and some of TikTok’s unique features were lost, alternatives provided by Meta and Google filled the gap adequately.
This scenario has offered a blueprint for what might unfold in other regions, such as the U.S., where similar pressures are mounting against TikTok.
High-Profile Investors Eye TikTok Acquisition; the race to acquire TikTok has attracted notable figures from various sectors:
Larry Ellison: Whilst a public announcement has not been made regarding the latest developments, his strategic position to potentially acquire TikTok is perfectly aligned with Oracle's operational foundations.
Currently managing all U.S.-based databases for TikTok, Oracle is ideally situated to integrate the social media platform’s operations seamlessly with its extensive cloud and data services.
Furthermore, holding a 12.5% stake in TikTok's American operations not only represents a strategic investment but also sets the stage for greater influence or outright ownership, enhancing Oracle's influence in the tech sector and expanding into the social media market.
Financially robust as the world's eighth richest individual, Larry Ellison has the capital necessary to support such a significant acquisition. This move would not merely be about ownership but would align with Oracle's long-term strategy for market dominance and expansion.
Acquiring TikTok would provide Oracle with a competitive edge, access to a vast, youthful demographic, and rich data insights, which are invaluable in today's digital-first economy.
This strategic acquisition would solidify Oracle’s position as a central figure in the global tech landscape, extending its market reach and reinforcing its legacy in an era where digital interaction is paramount.
Bobby Kotick: The former CEO of Activision Blizzard who stepped down at the end of last year, is apparently interested in buying TikTok as a new bill in the US threatens to ban the app or force its sale.
According to a report by The Wall Street Journal, Kotick mentioned the idea of partnering on such a purchase to OpenAI CEO Sam Altman and others seated with him at a conference dinner last week, and brought it up with ByteDance Executive Chair Zhang Yiming.
If TikTok is sold, the WSJ notes, it would likely go for hundreds of billions of dollars.
Steve Mnuchin, Former U.S. Treasury Secretary, is reportedly forming a consortium to bid for TikTok. His strategy involves crafting a deal that avoids concentrated ownership, promoting a diversified investor base.
Kevin O’Leary, famed for his role on "Shark Tank," has expressed a desire to either purchase TikTok himself or join a group effort, advocating for a bipartisan oversight structure to maintain U.S. governance over the platform.
Kevin O'Leary is putting together a syndicate for a potential purchase of TikTok, with a starting bid of $20 billion to $30 billion — an up to 90% cut in valuation from the company's last funding round.
Any deal for the short video-sharing platform — valued at $220 billion in 2023, according to PitchBook data — will likely exclude the user preference-based algorithms that have helped make it so successful, the O'Leary Ventures Chairman said on CNBC's "Street Signs Asia."
In 2020, amid heightened governmental scrutiny, Oracle and Walmart actively pursued a significant stake in TikTok following negotiations led by then-President Donald Trump over national security concerns.
However, the deal, which would have seen both companies sharing a major stake in TikTok, ultimately fell through without completion.
Oracle's involvement with TikTok remains particularly noteworthy, as it currently manages TikTok’s U.S. user data via Project Texas.
This ongoing role, combined with Walmart's retail expertise, underscores a persistent and strategic attempt by both entities to exert influence over TikTok’s operations and data management.
The collaboration reflects a deep commitment to securing a foothold in the influential social media platform.
Meanwhile, Microsoft, known as the most valuable company in the world, also attempted to acquire TikTok but did not succeed.
Looking ahead, Microsoft may consider re-entering the fray, though it would likely aim to sidestep potential obstacles such as pushback from China and antitrust concerns in the U.S., according to Brian Wieser, founder of Madison and Wall consulting firm.
This cautious approach signals the complex geopolitical and regulatory challenges that major tech companies face in such high-stakes acquisitions.
Any acquisition of TikTok by a major tech firm would likely face intense regulatory scrutiny. The platform's vast U.S. user base and its role as a premier advertising venue make it a lucrative, albeit sensitive, asset in the tech industry’s arsenal.
The potential sale of TikTok is a move could signify a pivotal realignment in the tech industry, possibly transferring a major asset from Chinese to American hands.
Such a transition would not only reshape TikTok's operational structure but could also shift the balance of power in the global tech landscape.
All this being unveiled in public in front of millions all interpreting in their own manner the complex tapestry of strategic interests, regulatory hurdles, and geopolitical tensions.
Indeed, the trials and tribulations of this social media giant have only just begun, marking the early days of a pivotal chapter in the saga of one of the most successful digital platforms of this era.
As TikTok faces potential buyouts, with billionaires and corporate behemoths hovering like vultures, and prepares for inevitable legal battles in the high courts, the story continues to attract widespread attention.
TikTok is much more than a tool for social interaction; it's a vital advertising hub for thousands of businesses that harness its user-friendly interface to engage consumers.
This evolving narrative attracts both adversaries and advocates, all drawn to its immense size—not just financially but also in its profound influence on society.
The irony is palpable: as controversy swells, it paradoxically draws even more users and viewers, each eager to comment and participate on their favourite platform, TikTok. This burgeoning interest ensures that as the complexities of TikTok’s situation unfold, the eyes of the world remain fixed on every development, waiting to see what the future holds for this influential juggernaut.
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