TheWrap reported in late August that Larry Ellison’s Oracle was likely to win the company because of ties to the White House
Tik Tok Oracle White House
Hours after Microsoft’s bid to purchase TikTok was denied, a rival bid by software giant Oracle has been picked by Chinese company ByteDance to take over American operations of the popular social media site, numerous media outlets reported on Sunday.
Oracle’s purchase of U.S. operations of TikTok will not be characterized as an “outright sale,” but rather as Larry Ellison’s company becoming a “trusted tech partner” of the site, according to the New York Times, Wall Street Journal and others.
TheWrap exclusively reported on August 27 that Oracle had emerged as the lead suitor for TikTok in a then-anticipated $20 billion deal. As TheWrap reported at the time, Oracle was favored because Ellison is a supporter of President Donald Trump, who said the company was a security risk because of its base in China and ordered a sale within 90 days or else TikTok would be shut down for American users.
The sale price was not available on Sunday night.
General Atlantic and Sequoia Capital, two U.S.-based ByteDance investors with long ties to the Trump administration and Republican causes pushed for the sale to Oracle. They approached Ellison to buy TikTok and reached out to the White House to close the deal, two individuals with knowledge of the matter told TheWrap at the time.
Microsoft had been expected to be the one to reach a deal with ByteDance through a consortium deal with Walmart, but plans fell through on Sunday.
“ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft,” Microsoft said in a statement. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”
TheWrap reached out to ByteDance, Oracle and Microsoft for comment but got no immediate response.
Microsoft, which is worth about $1.6 trillion, was looking to buy TikTok from its Beijing-based parent company Bytedance for $50 billion, Reuters reported in July. An antitrust expert told TheWrap last month that a Microsoft deal for TikTok wouldn’t present the same antitrust concerns as a potential Facebook bid would. But from a regulatory standpoint, the optics might not be great if the second most valuable company in the world gobbled up a powerhouse social app.
Microsoft, along with Oracle, Walmart, Triller and several other U.S.-based technology companies expressed interest in buying U.S. operations of TikTok. But a source told South China Morning Post Sunday that the ByteDance board of directors wanted to keep the site’s source code under its ownership, and that it wouldn’t sell the underlying algorithm behind the popular social media site.
This restriction came as China issued new regulations last month that would bar TikTok from transferring its technology to a foreign buyer without explicit permission from the Chinese government.
The elimination of the algorithm, that source said, might compel prospective buyers to rethinks its plans.
This new “no algorithm” condition to a deal with a U.S. company came as the Trump Administration had given ByteDance until September 20 to sell TikTok. If President Trump rejects the condition, making the divestment of TikTok impossible, the app could go dark for its users in America after the deadline.
With Microsoft – which has the deepest pockets – out of the bidding war, Oracle moved to the top of the list of possible buyers. It is also one of the few Silicon Valley firms that has publicly allied themselves with President Trump, as it has helped in the study and collection of data of the malaria drug hydroxychloroquine to treat Covid-19.
Doug Leone, one of Sequoia’s partners, is a major donor to Trump’s reelection campaign and the Republican Party, according to Federal Election Commission records. He and Bill Ford, chief executive of General Atlantic, have been working with the White House as the clock ticks toward Trump’s looming deadline.
ByteDance has raised a stunning $7.45 billion since 2012. General Atlantic invested in ByteDance twice, first as part of the company’s $2 billion fund raise in December 2017 and again in October 2018 for $3 billion, according to Pitchbook.com.
Sharon Waxman contributed to this article.
Source: Read Full Article