With Microsoft bowing out of the race to acquire TikTok, Oracle has been left with the bag.
It’s just not quite clear what’s in the bag.
With the Chinese government blocking the sale of TikTok’s famed recommendation algorithm, Oracle won’t acquire TikTok’s US operations outright.
Rather, it will be a ‘trusted tech partner’
That leaves Oracle “more as a cloud services provider than as an actual acquirer,” Axios says.
Oracle’s cloud biz is tiny compared to the likes of Microsoft or Amazon, so the deal is probably worth pursuing on that level. But the TikTok bid still has to go through a national security review, per Wall Street Journal.
The TikTok saga has a “hilarious parallel with eBay buying Skype,” writes leading tech analyst Benedict Evans.
The eBay-Skype comparison lacks a geopolitical angle
However, the episode has elements of a weird corporate match and — potentially — some shareholder value destruction:
- 2005: eBay raised eyebrows when it acquired seemingly unrelated Skype for $2.6B.
- 2007: eBay’s users rejected Skype and the investment was written down by $1.4B, with eBay admitting it “had not performed as expected.”
- 2009: eBay sold Skype for $2.75B to a group of investors, and kept 30% of the equity.
In 2011, Microsoft acquired Skype for $8.5B, yielding eBay a $1.4B return after all the headaches.
It’s way too early to tell if that’s the bag Oracle will get, but the analogy is definitely something interesting to think about.
