Experts say Oracle buying TikTok is a wild idea which could either be a Larry Ellison headfake or a bold move to boost its cloud offensive
- Oracle is said to be exploring its own bid for TikTok which the Trump administration wants to ban due to its ties to China, according to the Financial Times.
- Experts say Oracle's reported interest in buying TikTok could be a ploy to drive up the price for the popular video app, which rival Microsoft is looking to acquire.
- Buying a popular consumer brand doesn't make sense for an enterprise powerhouse like Oracle, analysts say. "Why would an enterprise software company without a consumer play want TikTok?" Valoir analyst Rebecca Wettemann told Business Insider.
- However, some experts say gaining access to TikTok's massive consumer data could benefit Oracle's cloud-based tools geared to sales, marketing and customer service.
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Oracle is known for making bold M&A moves, but the tech giant's reported interest in TikTok has left some analysts dumbfounded.
The Silicon Valley giant is said to be exploring a potential bid for TikTok, in an apparent challenge to Microsoft which is looking to acquire the popular video app following President Trump's threat to ban the company, according to the Financial Times.
Oracle declined to comment.
But news that Oracle, a tech behemoth known for selling enterprise hardware and software to big corporations, would want to buy a popular consumer platform was a head scratcher for some veteran tech analysts.
"My first thought is one likely shared by many: why?" Michel Dortch, founder and principal analyst with DortchOnIT.com, a technology marketing firm, told Business Insider.
That's precisely how analyst Steve Allen of S2C Partners reacted, telling Business Insider: "TikTok doesn't make any sense at all. What would Oracle do with TikTok?"
Valoir analyst Rebecca Wettemann echoed that point, saying, "Why would an enterprise software company without a consumer play want TikTok?"
One possibility is that it's just an Oracle headfake, a ploy meant to make it tougher for archrival Microsoft to buy TikTok.
"Totally a Larry fake," Robert Siegel, a Silicon venture capital investor and management lecturer at the Stanford Graduate School of Business, told Business Insider, referring to Oracle founder Larry Ellison.
An Oracle bid would certainly "drive up the price for Microsoft," he said, adding. ""All is fair in love and war. And if he does win the bidding war he can always sell it to someone else and he helps out the administration."
Ellison is known to be a staunch supporter of Trump, who wants to ban TikTok because of its ties to China.
But some analysts do see TikTok giving Oracle a boost in an area that the tech giant has been focused intensely: the cloud and big data.
Analyst Ray Wang of Constellation Research, in a tweet, cited the several reasons buying TikTok would make sense for Oracle, including gaining access to "big workloads for the cloud." Oracle would also be able to tap TikTok's huge consumer data trove for the tech giant's cloud tools geared to sales, marketing, and customer.
Valoir's Wettemann also cited that business — known as Oracle CX Cloud — as a possible reason for buying TikTok, saying "content is a big part of it" and "TikTok would give it a platform for video content as part of its CX portfolio."
Dortch said TikTok makes sense for Oracle if one views the platform "not as a fun app but as an advertising and marketing tool." In that case, he added, "Oracle's interest begins to make a bit more sense."
Wettemann said TikTok could also help change Oracle's image, "branding it as more of a human, empathetic, warm and fuzzy company."
"While I don't think we'll see Larry and Safra doing 'the switch' anytime soon, having a platform like TikTok could help make Oracle look more human,'" she said.
There is already an @officiallarryellison TikTok account, but Oracle declined to comment if it belongs to the Oracle founder.
Still, Wettemann also speculated that trying to look hip is probably not a "primary motivation" for an Oracle bid "given the potential price tag of TikTok."
Got a tip about Oracle, TikTok or another tech company? Contact this reporter via email at [email protected], message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.
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