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Microsoft Would Be Foolish to Dismiss Oracle’s Bid for TikTok

Last Updated September 23, 2020 2:24 PM
Mark Emem
Last Updated September 23, 2020 2:24 PM
  • Oracle is TikTok’s newest suitor.
  • With relatively more experience in consumer products, Microsoft might view Oracle’s bid as underwhelming.
  • Oracle has some advantages (and personal scores to settle), though, and should not be ignored.

Microsoft (NASDAQ:MSFT) has been the clear favorite in the race to acquire the U.S. operations of TikTok since President Trump threatened to ban the app.

With time running out, you would have been forgiven for assuming no other serious suitor would emerge. But then comes along Oracle Corporation (NYSE:ORCL).

Being a company that specializes in database software and entirely lacking a consumer-facing product, Oracle’s bid seems weak at the surface. Microsoft can’t sit back and ignore Oracle’s aspiration to acquire TikTok, though. Watch the video below for more details.

Here is why Microsoft would be foolish not to take Oracle’s bid for TikTok seriously.

1. Friends in High Places

Major U.S. tech firms have earned a reputation for being left-leaning. Oracle is an exception.

Both Oracle CEO Safra Catz and the company’s founder and technology strategist Larry Ellison are active supporters of Trump .

Catz was a member of Trump’s transition team in 2016. Earlier this year, Ellison hosted a fundraiser for the president. The two Oracle leaders support Trump’s re-election and are on the president’s task force to reopen the economy after the pandemic.

Two members of Oracle’s top leadership actively support President Trump. | Source: @stevekovach/Twitter 

Additionally, Trump has already voiced his support for Oracle  in its quest for TikTok. On Tuesday, he called the database software giant a “great company” that “could handle it.”

In a deal that is being forced by politics, Oracle’s association with the Trump administration could influence who walks away with the prize.

2. Oracle Has the Resources and Partners

Besides Microsoft, Twitter (NASDAQ:TWTR) is the other TikTok suitor  that has emerged recently. Microsoft isn’t worried about Twitter, though. With TikTok valued at between $20 billion and $50 billion, the social media platform couldn’t raise funds needed.

Currently, Twitter’s market cap is about $30 billion. The microblogging firm, which is yet to become consistently profitable, has $7.8 billion in its coffers .

Twitter’s cash on hand is not enough to fund the purchase of TikTok. | Source: Macrotrends 

Oracle, on the other hand, has the means. The database software firm has over $40 billion in cash .

Additionally, Oracle is bidding for TikTok in partnership with venture capital firms such as Sequoia Capital and General Atlantic.

3. Larry Ellison Has a Bone to Pick With Microsoft

The Oracle founder is known for being extremely competitive. For decades, Ellison has harbored ambitions of dethroning Microsoft. He is yet to succeed.

For instance, in the mid-1990s, Oracle introduced the Network Computer  (NC) as a low-cost alternative to the personal computer. The NC didn’t take off, but Ellison admitted it was intended  to take down Microsoft:

The NC is clearly part of our strategy to dethrone Microsoft.

Oracle’s ambitions to become a leader in cloud computing  by beating Microsoft and other players have failed despite poaching engineers and executives from rivals.

Outside of database software technology, Oracle trails in other tech niches. | Source: @jasper_07/Twitter 

Getting TikTok would perhaps be one of the few times Ellison has succeeded against the world’s largest software maker. Ellison’s favorite saying  is:

It’s not sufficient I succeed. Everyone else must fail.

Nothing would please Ellison more than to see Oracle get TikTok at Microsoft’s expense.

Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com. Unless otherwise noted, the author holds no investment position in the above-mentioned securities.