What can TikTok's data bring to Oracle?

"Use TikTok to narrow the gap with Amazon, Google, and Microsoft in cloud business."

By: Waffles

Editor: Ronnie

Produced by: Finance and Economics Doodle

According to company intelligence expert "Financial Graffiti", Oracle$Oracle (ORCL.US)$temporarily halted trading in the morning of September 14th, Eastern Time in the USA, awaiting further disclosure.After resuming trading, Oracle confirmed an agreement with ByteDanceto become a trusted data security compliance partner of TikTok. However, this deal still needs approval from the US government.

This means that since Microsoft's rumored acquisition of part of TikTok's business in July, the future direction of TikTok's operations in the USA will soon be determined.

After resuming trading, Oracle's stock price quickly surged, with the highest increase approaching 8%, and then fluctuated around 6%. As of this morning's US market close, Oracle was trading at $59.46, up 4.32%.

TikTok's vast data will complement Oracle's social media shortcomings.

In response to Oracle's 'partnership agreement' official statement, it is highly probable that TikTok will not involve the sale of technology and data transfer.As a cloud technology company, Oracle has a huge interest in TikTok's data, as well as a significant increase in its user cohort.Oracle certainly does not want to lose users, as having a complete and normal TikTok platform would maximize their interests.A fully functional TikTok platform means maximum financial benefit for Oracle."A financial analyst told 'Caijing Tuya'.

Why is it Oracle?

According to Bloomberg, unlike Microsoft's proposal to buy TikTok's business outright, it includes having a certain stake in the newly formed U.S. entity and becoming a technology partner of TikTok, storing the video application's data in Oracle's cloud servers. U.S. media reports said that previously the two companies had priced the valuation of TikTok's U.S. business at $25 billion to $40 billion, but this valuation was before China introduced new regulations restricting technology exports, and ByteDance also would not sell its algorithm to any U.S. buyer.

U.S. Treasury Secretary Mnuchin confirmed in an interview that the Committee on Foreign Investment in the United States (CFIUS) will meet this week to review the Oracle-TikTok transaction. Mnuchin said that if the deal is approved, a new entity called 'TikTok Global' will be established with its headquarters in the United States, providing 0.02 million job positions. This deal needs to be completed by September 20. In addition to the CFIUS review, this transaction also requires a separate national security review.and establish 'TikTok Global' based in the United States, providing 0.02 million job positions.This transaction needs to be completed by September 20. In addition to CFIUS review, it also requires a separate national security review.

For Microsoft, it has gaming and LinkedIn under its umbrella, while Oracle does not have much presence in the social media sector. Despite Oracle being an acquisition enthusiast, having previously acquired hundreds of companies, its main targets are primarily in the same ecosystem as software companies, database platforms, integrated solutions, and other areas. As of the three months ending in August, cloud services accounted for 74% of the company's $9.4 billion in revenue.

According to market analysis, one of the essential reasons why Oracle is eager to obtain TikTok is that it values the vast amount of data TikTok possesses.one of the reasons Oracle is determined to acquire TikTok is its vast data.By placing TikTok's data on Oracle servers, Oracle may be able to pave the way for new industries.

Oracle does not have a social media application that can integrate with TikTok, but Oracle stillcan use the large amount of customer data collected by TikTok to improve its marketing business and cloud computing tools,providing a variety ofIf Oracle, a marketing services provider, can connect its services with social networks, it will have a significant advantage in data analysis.

With over 2 billion downloads, TikTok's massive user base is also very attractive to Oracle. In the cloud market, although Oracle also offers a wide range of cloud products, it has fallen behind and it's difficult to catch up with the three major cloud market leaders, including Amazon, Google, and Microsoft. Without understanding social network operations,through collaboration with TikTok, Oracle can enter the consumer market through social networks and close the gap with its competitors.。

Acquisition Maniac

Oracle sells database technology and cloud systems to enterprises, being one of the earliest companies to help customers build records in this way. In 1975, Oracle provided project code named Oracle to its first client, the Central Intelligence Agency (CIA). Subsequently, its co-founder and current chairman Larry Ellison named the company after this code. Two years later, Oracle officially established and completed cooperation contracts with the CIA, the Navy Intelligence Bureau, the Air Force Intelligence Bureau, and the National Security Agency.

Today, Oracle's customers and business scope are expanding globally, including auto manufacturers like Mazda, Yamaha, as well as the United Kingdom's famous supermarket chain Co-op and retail giant Debenhams.

Chairman Larry Ellison once said that Oracle's technology can be used to track everything, 'Information about your bank, your checking account balance, and your savings balance is all stored in the Oracle database.'

Since 2004, Oracle has embarked on its merger and acquisition journey,From 2004 to early 2008,Completed approximately 40 mergers and acquisitions from 2004 to early 2008.，Including the end of 2004.Musical.ly's vicious acquisition case that caused a sensation in the industry eventually led to a $10.3 billion agreement with PeopleSoft.

From the fiscal year 2013 to the fiscal year 2015, Oracle spent over $7 billion on mergers and acquisitions, almost all paid in cash, accounting for more than 15% of the cumulative operating cash flow of these three fiscal years.

According to the Oracle official website, its.The main strategy of mergers and acquisitions is to strengthen its product supply, accelerate innovation, meet customer needs faster, and expand opportunities for partners through acquisition activities.。

Larry Ellison has previously expressed his market philosophy: "Only companies that reach a certain scale can win, and the best way to eliminate competitors is to acquire them. Software companies like Oracle have limited investment in hardware, and the only strategy to ensure continuous growth is through acquisitions to consolidate the market and gain more customers. Acquisitions enrich our product line and also provide new market opportunities."

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