Oracle reportedly wins bid for TikTok as Microsoft officially drops out

The deal is said to be a partnership rather than a full sale.

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Dana Wollman
September 13th, 2020
In this article: ByteDance, TikTok, Oracle, Microsoft, news, gear
TikTok closeup logo displayed on a phone screen, smartphone and keyboard are seen in this multiple exposure illustration. Tik Tok is a Chinese video-sharing social networking service owned by a Beijing based internet technology company, ByteDance.  It is used to create short dance, lip-sync, comedy and talent videos. ByteDance launched TikTok app for iOS and Android in 2017 and earlier in September 2016 Douyin fror the market in China. TikTok became the most downloaded app in the US in October 2018. President of the USA Donald Trump is threatening and planning to ban the popular video sharing app TikTok from the US because of the security risk. Thessaloniki, Greece - August 1, 2020 (Photo by Nicolas Economou/NurPhoto)
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Microsoft is officially out of the running to buy TikTok. The company issued a brief statement on Sunday confirming that ByteDance, TikTok’s parent company, rejected its offer to buy TikTok’s US operations. Meanwhile, ByteDance seems poised to announce a deal with Oracle, the only other known US company left in the bidding war.

In its statement, Microsoft said:

“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 did not specify what changes to the service it had proposed. However, today’s announcement from Microsoft comes on the heels of a report this weekend from the China Morning Post that ByteDance was unwilling to sell its highly effective algorithm to a US bidder. To keep users hooked on the service, an American buyer would have had to rewrite the underlying code that has been so essential to the service’s success. According to the report, ByteDance informed both US officials and would-be buyers of its decision.

Microsoft’s announcement comes days before a September 15th deadline set by President Trump. Microsoft confirmed in early August that it was considering a purchase of TikTok’s US arm. With Microsoft out of the race, The New York Times reports that Oracle is the only known American suitor. The Wall Street Journal is in fact reporting tonight that Oracle has been selected as the winner, though as of this writing this has not been confirmed by ByteDance, Oracle or US officials.

The Wall Street Journal adds that “Oracle is set to be announced as TikTok’s ‘trusted tech partner’ in the U.S., and the deal is likely not to be structured as an outright sale." A source familiar with the matter confirmed to Engadget as well that TikTok plans to move forward with Oracle, though the terms of the deal, and whether it can even be considered an acquisition per se, remain unclear.

Oracle, for its part, has not said how TikTok might fit into its existing strategy or what its plans for the service’s US business might be. Engadget has asked ByteDance and Microsoft for comment. We will update our story if and when we hear back.

Karissa Bell and Devindra Hardawar contributed to this report.

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