Tiktok flipflop, round #17

That a short-form video app is central to the Us-china trade war shows how the economic battlefield has changed

@shapshak

If Oracle does buy Tiktok’s US operations, it will be one of the most unlikely pairings of an old-school enterprise technology firm with a new social media phenomenon. To say the users of Oracle’s brilliant database technology and Tiktok’s youthful happy-snappers have no idea the others exist, is no understatement. Yet, the parents who use Oracle have children using Tiktok.

The two companies are from vastly different ends of the software spectrum — mission-critical business software versus the ethereal, virtual bling of short-form videos — with vastly different corporate cultures.

Integrating the businesses will provide decades of case studies for business schools — old tech absorbing a new tech startup in polar opposite industries. But leaving aside the culture clash, consider too the bizarre implications of this deal for the burgeoning Us-china trade war. On Sunday, Microsoft announced that Tiktok owners “Bytedance let us know today they would not be selling Tiktok’s US operations to Microsoft”.

This happened because, as part of the trade spat, China prevented Microsoft from gaining access to TikTok’s all-important algorithms, which are the real prize of an acquisition. Beijing used US President Donald Trump’s strategy of declaring that some Chinese technology needs state approval to be sold to foreign governments — as Trump did with Huawei.

Microsoft then said it could only guarantee the security of the 100-million US Tiktok users, and that data wouldn’t be siphoned off by Beijing, if it had access to that software code. “We are confident our proposal would have been good for Tiktok’s users, while protecting national security interests,” Microsoft said. “We would have made significant changes to ensure the service met the highest standards for security, privacy, online safety and combating disinformation.”

Clearly this wasn’t enough and Microsoft — which weirdly teamed up with Walmart — is out of the bidding.

Meanwhile, The Wall Street Journal said Oracle will be named Tiktok’s “trusted tech partner” in the US. When Oracle first expressed interest in TikTok, it seemed a ploy to drive up the price for Microsoft, a long-time enemy in the enterprise software market.

Either way, it creates a strange new twist in the geopolitical battle playing out between Trump’s White House and the Chinese government: it will be the first time that an app is both the spoils of war, and a new frontier of other potential global conflicts.

Already India, which shares a border with China, banned more than

200 Chinese apps, including Tiktok, in June. Both India and China are emerging superpowers, almost tied with 1.381-billion and 1.398-billion citizens respectively, and mobile apps are a new battlefield.

It’s a fascinating evolution of realpolitik: as mobile technology forces everything to evolve, so have nation-state strategic manoeuvres, from the physical battlefield to the economy to the app industry.

It creates a strange new twist in the geopolitical battle between the White House and China