Oracle and Walmart emerged from a number of previously interested
buyers including Microsoft and Twitter. The enterprise giant Oracle worked with
Sequoia and General Atlantic to beat Microsoft. Sequoia and General Atlantic are
two top investors in the Chinese parent company of TikTok, and are eager to
part of the deal. The deal would not be a complete sale to Oracle and Walmart,
as TikTok will keep its most valuable algorithm.
Oracle is a leader in the enterprise technology. TikTok’s
user base does not overlap with Oracle’s current client base. Oracle is also
aiming to expand its presence in cloud infrastructure services. Zoom announced
a partnership with Oracle’s cloud arm. In terms of cloud market share, Oracle
is well behind Amazon and Microsoft. A deal with TikTok would help Oracle to be
a bigger player in the market.
One potential issue is the impact on the brand association. With
a mature enterprise tech company like Oracle owning TikTok, young users might change
how they perceive the TikTok brand. Shifts in social media is not uncommon, just
like younger users left Facebook to use Snapchat instead. It is not hard to
imagine if TikTok users would leave the platform to a new short video platform.
Walmart could use the TikTok brand to boost its e-commerce profile.
TikTok users could also be a nice addition to Walmart’s existing user base. Walmart
could also use TikTok’s user data to perform targeted advertising.
References:
https://thenextweb.com/apps/2020/08/31/report-tiktok-sale-american-buyer-but-there-could-be-issues/
https://www.nytimes.com/2020/09/21/technology/tiktok-bytedance-deal-walmart-oracle.html
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