Oracle is taken into account the frontrunner to amass TikTok’s U.S. operations in a high-stakes race to take management of one of many world’s most influential social media platforms earlier than the federal government’s deadline to promote or ban the app by April 5.
In keeping with Bloomberg, Oracle’s involvement would entail offering safety ensures and taking a minority stake in a newly fashioned American entity, all whereas probably leaving TikTok’s prized algorithm underneath Chinese language possession.
Herein lies the rub.
Below the bipartisan law’s divestiture necessities, foreign-owned entities are prohibited from holding greater than 20% of the app, exerting management or path over the platform, and sustaining any “operational relationship” with TikTok’s content material advice algorithms or data-sharing practices. Oracle is proposing that the algorithm stays underneath Chinese language possession, so underneath its present guise, doesn’t meet the necessities of the legislation.
“It’s a idiot’s errand from the start,” mentioned David Arslanian, managing director of Progress Companions.
However past this main wrinkle—and the truth that sources imagine the ban deadline is likely to get extended—whereas Oracle may need the info chops to tackle TikTok, the closure of its advert enterprise final yr, plus the potential tradition conflict between a company B2B agency and a social media platform, current challenges.
“Oracle has an enormous benefit on politics, however the enterprise and tradition fundamentals are doubtful,” mentioned Matthew Newcomb, regional director, North America, U.Okay. and APAC, Azerio.
Beneath are the extra challenges Oracle faces in its bid for TikTok.
Rebuilding its adverts enterprise
The potential acquisition presents Oracle entry to a different advert enterprise, and, because it shut down its personal advert operations final yr, it gained’t be encumbered by legacy tech and operations.
Whereas this may very well be “excellent news,” mentioned Ameet Shah, associate and svp of writer operations and technique at Prohaska Consulting, the actual problem lies in constructing a cohesive staff and infrastructure.
