ByteDance, the Chinese owner of social video app TikTok, has chosen Oracle to be TikTok’s U.S. technology partner, and Oracle will take a significant stake in the business, according to a person familiar with the discussions. Microsoft said Sunday that ByteDance had chosen not to sell it TikTok’s U.S. assets. CNBC’s Andrew Ross Sorkin and Joe Kernen discuss. Subscribe to CNBC PRO for access to investor and analyst insights on TikTok and more: https://cnb.cx/3dIH56N
Shares of Oracle jumped 5% Monday after it confirmed that ByteDance has selected it as a partner to help it save its U.S. TikTok business.
Trading in shares of Oracle were halted Monday morning pending news of the deal. The stock resumed trading after Oracle confirmed late in the morning that it struck a deal with TikTok owner ByteDance to become its trusted technology provider.
A person familiar with the discussions told CNBC on Sunday that ByteDance picked Oracle to be the U.S. partner of the popular social video app. Oracle also will take a significant stake in the business, the person said. Earlier Sunday, Microsoft said ByteDance had chosen not to sell it TikTok’s U.S. assets.
Citing concerns that Americans’ personal data would be shared with the Chinese government, the White House had imposed a Sept. 20 deadline for ByteDance to announce a plan for a sale of TikTok in the U.S. or be banned by Sept. 29. The deal would have to be done by Nov. 12. TikTok has said the Chinese government doesn’t have access to user data.
“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft,” Microsoft said in a blog post. “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.”
Microsoft said on Aug. 2 that it was in talks to buy TikTok in the U.S., Canada, Australia and New Zealand. Weeks later Walmart said it believed working with Microsoft on a possible TikTok deal could be positive for TikTok users and for regulators.
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.
TikTok generates revenue through advertisements it shows to people scrolling through videos displayed in the app. Microsoft has its own advertising business, including the Bing search engine. Nadella worked on advertising, among other areas, before he became CEO.
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