Only 2 companies should buy TikTok, and Oracle isn’t one of them

As if Microsoft’s interest in buying TikTok wasn’t strange enough, reports this week suggested enterprise-focused database and cloud giant Oracle was planning to enter the fray. A broad view of the situation, however, reveals only two logical candidates: Facebook and Google.

Microsoft emerged as a surprise TikTok suitor earlier this month after President Trump issued an executive order giving ByteDance — TikTok’s parent company — 45 days to sell its U.S. business. The President later extended the deadline to 90 days. Trump claimed that TikTok could hoover up data on U.S. users and share it with it the government in China, where ByteDance is based. He threatened to ban TikTok unless Microsoft or another “very American” company stepped in to buy it.

This is why Oracle — whose cofounder and chair Larry Ellison has ties to Trump — could be preparing to bid on TikTok’s U.S. business, which has been valued at somewhere between $10 billion and $30 billion.

But why?

As with a potential Microsoft bid, you can find reasons Oracle would want to buy TikTok’s operations — but only if you squint hard enough. Some observers have suggested TikTok would serve as a showcase client to bolster Oracle’s cloud service aspirations. There’s no doubt it would — but is taking on all the drama and controversy that comes with running a social network really worth it?

Although Oracle’s recent financial results could have been better, the company is doing fine — its shares hit an all-time high just a year ago, and they remain within sight of that pinnacle today.

Intrinsically social

Any company that isn’t an intrinsically “social” platform should avoid TikTok like the plague. Just yesterday, news emerged that TikTok has removed more than 380,000 videos in the U.S. for violating its hate speech policy and banned more than 1,300 accounts for posting hateful content this year.

Does Oracle — or Microsoft, for that matter — really want to deal with this kind of headache? Bill Gates called Microsoft’s potential TikTok deal a “poisoned chalice,” and that would be the case for any company looking to buy TikTok — with a couple of notable exceptions.

Facebook is perhaps the most obvious prospective buyer, as the social media giant recently launched a second attempt to clone TikTok via its Instagram Reels product. Back in 2016, Facebook considered buying Musical.ly, a precursor to TikTok that ByteDance bought a year later.

Google is another logical candidate, as there are clear synergies between TikTok and Google-owned YouTube, given their shared focus on video. In fact, many “influencers” heartily embrace TikTok, YouTube, and Instagram.

Plus, Facebook and Google are already accustomed to battling controversies over user-generated content — from bullying to trolls, propaganda, conspiracy theories, and misinformation.

Twitter has been mentioned as another possible buyer for TikTok, and while such a tie-up would make sense on many levels, Twitter doesn’t have the same financial resources as Facebook or Google parent Alphabet.

When you look across the list of potential buyers, only two names make any real sense — and Oracle certainly isn’t one of them.

Source: Read Full Article