December 6, 2020

TikTok to Pursue Partnership with Oracle; Microsoft Proposal Rejected

ByteDance abandoned the sale of TikTok in the United States on Sunday in pursuit of a partnership with Oracle Corp that it hopes will spare it a U.S. ban while appeasing China’s government, people familiar with the matter told Reuters. The decision between TikTok and Oracle to become business partners in the United States is expected to satisfy the Trump administration’s national security concerns.

The White House had imposed a September 20 deadline for ByteDance to announce a plan for a sale of TikTok in the U.S. or be banned by September 29, and a deal would have to be done by November 12.

Microsoft Bows Out of Deal to Buy TikTok

Meanwhile, Microsoft said Sunday that ByteDance had chosen not to sell it TikTok’s U.S. assets.

The exact nature of the agreement between TikTok and Oracle remains unclear, but it was not described as an outright sale. The news about Oracle came just after Microsoft announced that it will not buy TikTok’s U.S. operations from ByteDance.

“We are confident out proposal would have been good for TikTok’s users, while protecting national security interests,” Microsoft said in a blog post Sunday. “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.”

Multiple analysts had described Microsoft’s pursuit of TikTok as a potential “coup” for the Washington state-based firm – an opportunity to scoop up one of the world’s fastest growing social media platforms at a time when TikTok may be desperate to make a deal.

According to CNBC, “Microsoft’s failure to buy TikTok amounts to a symbolic loss for Satya Nadella, who took over Microsoft from Steve Ballmer in 2014. Under Ballmer, Microsoft had sought to buy Yahoo in 2008 but ultimately withdrew the bid after Yahoo rejected the offer, even as Microsoft increased the amount it was willing to pay.”

Walmart May Still Has an Interest in TikTok

A deal could have also included an American retail giant:  Walmart was also participating in negotiations with Microsoft over a potential deal. The retailer had said it was interested in how TikTok could have bolstered its access to consumers.

Walmart on Sunday told CNN Business that it “continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties.”

“We know that any approved deal must satisfy all regulatory and national security concerns,” the company said in a statement.

ByteDance has not responded to a request for comment. TikTok declined to comment and Oracle did not respond to a request for comment.

For a look at all of today’s economic events, check out our economic calendar.

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