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Trump Administration Temporarily Approves Establishment of ‘TikTok Global’ Joint Venture
9.19 The Trump administration temporarily approves the establishment of a ‘TikTok Global’ joint venture between Oracle and Wal-Mart in the US and Byte Dance in China. TikTok Global manages TikTok’s global business outside of China. The participation structure is Byte Dance 80%, Oracle 12.5%, Walmart 7.5%. As a TikTok technology partner, Oracle plans to transfer and manage TikTok data to Oracle Cloud. The TikTok algorithm or technology has not been transferred to Oracle, and Oracle reserves the right to verify the source code of TikTok in the United States. According to Bloomberg, the value of TikTok’s global business unit in this transaction is estimated at $ 60 billion. Assuming $ 60 billion, Oracle will pay $ 7.5 billion (undecided). The deal includes a plan for IPO TikTok Global within a year.
The ‘Global TikTok Agreement’ is not yet finalized
The agreement is still in the process of approval of technology exports by the Chinese authorities. The Chinese government has yet to announce its official position. In addition, Trump said: ‘Three companies have approved it as a condition to establish a $ 5 billion education fund,’ but Bytedance commented on this as’ this is the first time I see it in the press. The ‘education fund’ is expected to be a variable in the final settlement process
3 things Oracle got from the TikTok acquisition
1) TikTok Software Sales – Oracle’s equity method earnings are highly likely to decrease with the TikTok acquisition. Since both TikTok and its parent company Byte Dance are private companies, access to information is limited, but according to media reports, TikTok’s annual sales in 2019 were 100 million.
It’s estimated at $ 76.9 million, and the cost is estimated to be significantly higher than that (TikTok signed a contract with Google Cloud to pay $ 800 million to use Google Cloud services for three years in May 2019). However, The Information, a US media company, uses non-public information.
As a result of the estimates, it is revealed that the TikTok transaction has the potential for Oracle to generate $ 1 billion in annual cloud product sales. 2.6% of Oracle enterprise-wide sales as of fiscal 2020
2) Track Record: TikTok is currently the fastest growing social media platform in the world. Launched in September 2016, TikTok saw 1 billion downloads in 29 months and 2 billion in 14 months. According to the research results of the market research firm DataReportal in July 2020, the number of TikTok users was 800 million, ranking seventh in the world according to the number of users of social media platforms (first Facebook 2.6 billion, 6th Instagram 10.8 billion). If TikTok’s rapidly increasing data traffic is managed smoothly on Oracle Cloud, the superior security and scalability of Oracle Cloud can be demonstrated at the same time. In April 2020, Oracle was also selected as Zoom’s cloud partner, which is the fastest growing user in the world. We believe that you can contribute to the expansion of the Oracle Cloud market share.
3) Secure TikTok Big Data: Oracle currently sells SaaS marketing products such as Oracle CX Marketing, a B2B and B2C marketing solutions program. Data on the usage patterns of TikTok users, who are in their teens and 20s, can be used to market SaaS products. The Chinese version of TikTok, Thewooin, offers a ‘live streaming sale (by clicking on the live streaming content uploaded by the seller, you can buy products from the platform or the corresponding seller in the mall).
It reached $ 17 billion. TikTok Big Data Expected to Contribute to Oracle’s SaaS Market Share Expansion
