Microsoft Loses The Bidding War In The Race To Acquire TikTok U.S. Operations

The cloud services provider company Oracle has won the bidding war against Microsoft, in the race to acquire TikTok’s operations. Microsoft said that ByteDance, the parent company of TikTok, had rejected its bid. “ByteDance lets us know today they would not be selling TikTok’s U.S. operations to Microsoft,” Microsoft said in a blog post.

President Trump said earlier that if TikTok doesn’t dissect its U.S. operations and hand over it to an American company, it would ban the app in the United States. Earlier, he gave a deadline of 45 days (which was until September 15) to close down its deal with a potential buyer. Later, Trump extended the deadline to 90 days. The Trump administration had accused TikTok of being a national threat. However, the company denied all the allegations. It’s not the first time, the government is calling out the Chinese apps. Last month, Trump signed an order to ban the use of WeChat.

Microsoft was the frontrunner in pursuing the deal with TikTok and acquire its operations in New Zealand, Australia, Canada, and the US. Later, Oracle joined the race to buy one of the most influencing social media apps across the globe. “We are confident our proposal would have been good for TikTok’s users while protecting national security interests. 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. We look forward to seeing how the service evolves in these important areas,” the Windows software company said.

The Wall Street Journal reported that Oracle will be announced as TikTok’s trusted tech partner” in the United States. Last month, Financial Times reported that Oracle was working with a group of U.S. investors including General Atlantic and Sequoia Capital that already has a stake in TikTok, citing the people familiar to the matter. The Oracle founder Larry Ellison is one of the key supporters of the Trump Administration and he has shown his support by running a fundraiser for President Trump.

Walmart who had joined Microsoft to buy TikTok’s operation said that it’s still interested in investing and would talk with ByteDance related to the matter. However, it would have ended up as a lucrative deal for Microsoft as it not only has a strong arm in the cloud infrastructure but also has expanded its business in the advertising market.  TikTok generates revenue by running advertisements on its video-sharing app and has around 100 Million U.S. users. Last week, Reuters reported that China would rather witness TikTok’s shutdown in the US rather than a forced sale.

Recently, China’s Ministry of Commerce updated its export rules which can prevent the sale of TikTok to the U.S. firm. The rules convey it would restrict the export of “technology based on data analysis for personalized information recommendation services.” Even though the rules have not directly targeted TikTok, it can possibly hamper the company’s future deal with a foreign company. Reuters also reported China’s state-run English television channel CGTN, citing the sources that ByteDance will not sell its TikTok U.S. operations to either Microsoft or Oracle.