You’ll need to consult an oracle to find TikTok victor
Fight for the Chinese social media app’s international arm just got fiercer as billionaire Larry Ellison joins Bill Gates in the running
He’s been described as a control freak and he once hired private investigators to rummage through Bill Gates’s rubbish bins. But during an extraordinary rags to riches career, Larry Ellison has rarely had regrets. Nor is he fond of losing. That’s why his latest gambit – as a late entrant in the frantic scramble to acquire TikTok’s international business – should be taken seriously.
Oracle’s emergence as a potential suitor for the US, Canadian, Australian and New Zealand assets of the Chinese-owned social media app, following a shakedown by the White House, has left many in Silicon Valley scratching their heads.
After all, quite how Oracle would seek to integrate the social media app into its existing business – flogging enterprise software and databases that sit at the heart of big organisations’ IT systems – is anyone’s guess.
TikTok, a short video streaming app beloved of teenagers and twentysomethings who use it to share viral dance routines, pranks and comedy sketches, is hardly an obvious fit.
However, Larry Ellison, a collector of military jets and trophy homes, is not the sort of man to allow such pesky details to get in the way.
The red-blooded software tycoon may have zero experience running consumer-facing businesses but he is eager to reinvent Oracle for the future, while also defying critics who say the company missed the boat on the cloud computing boom, leaving it stranded in a Nineties time warp.
Above all, acquiring TikTok would offer Ellison the chance to settle scores with his arch rival Microsoft – seen as the front-runner to acquire TikTok – and his nemesis Bill Gates.
With a fortune of $69bn (£52bn), Ellison, the world’s sixth richest person, is hardly down on his luck, but it’s fair to say the fortunes of Oracle and Microsoft have diverged sharply in recent years. Once neck and neck in the bitterly contested software wars of an earlier era, over the past decade Oracle’s revenues have stagnated.
Its $169bn market value is chunky enough but it pales in comparison to the mighty Microsoft, which is now nearly 10 times bigger at $1.6 trillion, having niftily surfed the mass shift into cloud computing under Satya Nadella, the chief executive.
It’s a trend that has only accelerated during the pandemic as more and more businesses switch to digital technology to strengthen their resilience.
Microsoft’s shares have surged by about one third in value this year, propelled by strong growth from its Azure cloud computing arm, which reported a 47pc rise in revenues in the three months ending on June 30.
Oracle is now chasing the cloud boom too, but is trailing a long way behind. Its shares – at $55.18 a piece – have largely flatlined this year, prompting Ellison, its chairman, to consider a potentially radical shift in direction.
Either way, Microsoft’s recent run of success is unlikely to have pleased Mr Ellison.
The visceral feeling between the two companies is perhaps best summed up by an internal email sent by one Microsoft executive, which emerged during a historic dispute and which talked of its wish to “kill … Oracle”.
With extremely deep pockets, plenty of experience running consumer businesses and the expertise to pull off a deal to acquire TikTok – which would involve the highly complex transfer of all the Chinese group’s data to its own systems within a year – Microsoft is the more obvious buyer.
‘Audacious move has left many in Silicon Valley scratching their heads’
Oracle’s proposal to jointly invest with existing investors in TikTok’s parent, Byte Dance, including General Atlantic and Sequoia Capital, looks less likely.
But Ellison may hold a trump card – his friendship with the US president, who this week said Oracle would be a “great company” to consummate a deal.
Silicon Valley tycoons who openly support the Trump White House are few and far between but in February, Ellison held a fundraiser for the president at his private golf course and estate in California.
As well as a taste for flashy lifestyles and private aircraft, the two New York natives (Ellison was born in the Bronx and Trump grew up in the neighbouring borough of Queens) share other things.
One is a preference for hardball negotiating tactics which could come in useful in clinching a TikTok deal.
Ellison’s uncompromising approach shouldn’t be underestimated.
Hours before their wedding, Ellison once famously surprised one of his four ex-wives with an unusual gift: an 11 page prenuptial agreement drafted by his lawyer. She promptly signed, although the marriage didn’t endure.
Oracle will be hoping to have more luck with an eleventh hour union with TikTok – officiated by President Trump. It’s no slam dunk but stranger things have happened.
Ben Marlow is away