Microsoft and Twitter get left at the altar, as the Redwood City-based enterprise software giant with no real experience in social media wins the prized video app that Trump pressured into being sold.
Alleged cheating billionaire yachtsman Larry Ellison has long been very visible about his high-rolling Trump fundraisers and full-throated support of the president, so it’s little surprise to see the federal government shepherd a billion-dollar megadeal his way. Still, not many saw his Redwood City cloud company Oracle as a real contestant in the TikTok takeover frenzy, where US tech players like Microsoft and Twitter were bidding against one another for the short form video-sharing app that President Trump had deemed a Chinese state security threat. But the New York Times reports on a wild (and completely vague) last-minute deal that came together rather out of the blue on Sunday, just days before a Trump-imposed September 20 deadline for a sale, that sees Oracle win the bid to become a "trusted technology provider" for TikTok — which is clearly not an outright sale — but certainly gives the Trump-supporting Ellison a major victory and reason to donate more by gaining a new swath of 100 million new TikTok users who largely occupy the 18-24 age demographic.
BREAKING: Oracle says it "is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider" for TikTok U.S. https://t.co/uDSD4MvLJ4— CNBC Now (@CNBCnow) September 14, 2020
As CNBC notes, Oracle will merely become that "trusted" partner to Chinese-owned TikTok parent company ByteDance, a line of tech PR baloney that is ill-explained at best. Oracle put out a bare-bones two-sentence statement confirming the deal, news of which broke Sunday night, which Treasury Secretary Steve Mnuchin also confirmed this morning on CNBC.
The “deal,” if it even is a deal, as no cash terms were announced, is still pending a U.S. Treasury department review. And it sounds suspiciously like a compromise that saves face for both sides, and saves ByteDance from losing their most lucrative asset — either the U.S. portion of its user base, or its vast Asian market of users, which it was never clear it would give up.
Oracle buying TikTok without its AI despite having zero experience in social =— Josh Constine -SignalFire (@JoshConstine) September 14, 2020
-A moderation time bomb
-A broken app with no recommendation algorithm
-China’s current best case scenario
Business Insider reports that TikTok sweepstakes also-ran Walmart is still interested in being part of the deal. They had cozied up with Microsoft on that failed bid, which according to a Microsoft statement, involved “significant changes” regarding “security, privacy, online safety, and combatting disinformation,”that had made ByteDance back off. Per CNBC, the deal going to Oracle could “could boost Oracle’s cloud business. It might make Oracle more visible to young consumers and give it control over a prominent advertising venue.”
“We would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation" is an attempt to poison the well against an Oracle deal where they only take over hosting. And MSFT is right to do so. https://t.co/221RLbdEAY— Alex Stamos (@alexstamos) September 13, 2020
While the TikTok sale/transfer/becoming a “trusted technology partner” is supposedly a security measure, security experts size this up as an absolutely meaningless gesture. “Oracle’s trusted partner status could include some code audits, but as long as the company isn’t writing the code, it will be hard to stop ByteDance from smuggling in some tracking malware if it wants to," The Verge observes. "Oracle won’t be rewriting the TikTok algorithm or handling moderation, so it will be just as easy for ByteDance to push Chinese propaganda or censor embarrassing messages. Oracle will be a contractor rather than a subsidiary, but it’s not clear that will make them any less vulnerable to pressure or subterfuge. If you were concerned about TikTok before, there’s no obvious reason you should be less concerned now."
This does bring another feather to the cap of Silicon Valley, but might turn out to be another Yahoo-style ruining of a product as we saw with Tumblr and Flickr. Or maybe nothing will change at all with TikTok, other than the fact it will have a new Trump donor middleman monetizing the product stateside.
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