Amazon, Apple, Oracle rumored to be potential TikTok buyers if ByteDance is forced to sell

As a Digiday+ member, you were able to access this article early through the Digiday+ Story Preview email. See other exclusives or manage your account.This article was provided as an exclusive preview for Digiday+ members, who were able to access it early. Check out the other features included with Digiday+ to help you stay ahead

The rumor mill is up and running about the fate of TikTok’s ownership in the U.S. after President Joe Biden signed the “divest or ban” TikTok bill last week.

The legislation requires ByteDance to sell its shares in the app to a U.S. business within 270 days (with the potential for a 90-day extension if significant progress is deemed to be made toward a sale), otherwise it will be banned outright across the U.S.

Still, since this “sell or be banned” threat has been looming over the past four years, and within that timeframe TikTok has been able to embed itself further into U.S. society, the latest moves by the U.S. government aren’t really a surprise.

It’s no wonder that ad execs are assuming there’s more chance that TikTok will be sold, rather than banned outright. And that’s because the platform drove nearly $15 billion in revenue in 2023 via SMB investments in paid advertising and marketing, according to a report from TikTok in April 2024 conducted by Oxford Economics. Plus the fact that the app reaches 170 million Americans — a huge audience that advertisers want to reach.

That’s even despite ByteDance stating that it would rather shut down the entertainment app in the U.S. rather than sell it to a U.S. entity.

Since nothing is off the table just yet, a future sale brings about a whole slew of questions, including who would buy it, how they would do it, why they would do it and for how much.

So for now, Digiday is taking a look at this one piece of the puzzle to analyze three companies rumored in industry circles as being potential buyers of TikTok, to understand why they may (or may not) be a good fit.

Amazon

Amazon has come up in some circles thanks to its push into short-form video via its Inspire shopping feed, which has a very TikTok-esque look and feel.

“I can see Amazon taking an interest because it’s much more willing to experiment than, say, Apple, and TikTok’s push into shopping would give Amazon a world of possible integrations,” said Jamie MacEwan, senior research analyst at Enders Analysis.

Meta could also benefit from an Amazon purchase of TikTok by association, after the social media giant announced a partnership with the e-commerce site in November 2023.

“This partnership aims to integrate Amazon’s e-commerce platform with Meta’s social media platform — providing customers with a seamless purchase experience and opening up new opportunities for targeted advertising,” said Yuriy Boykiv, CEO of agency Front Row Group. “Plus, the addition of Buy with Prime to Facebook and Instagram stores is a major convenience for shoppers.”

But the problem, as MacEwan noted, is whether Amazon buying the U.S. arm of the app makes TikTok better from a user perspective. “Amazon’s execution on its site is very disappointing in terms of the pleasure of browsing, and creating any kind of new consumer demand,” he added. “So you’d want it [Amazon] to be quite hands off on TikTok except for assisting in the critical business and technology transfers.”

Apple

Apple’s name has been murmured in circles since the initial version of the bill first appeared in the U.S. House in March. At that time, one ad exec who exchanged anonymity for candor said that they had heard rumors that Apple is preparing for a bid. “I’ve heard that from my TikTok contacts, and from so many other people in my [industry] community,” they said. “I’ve even heard it from my Meta contacts, who said they’ve received a notification from their partnership teams at Apple saying FYI, we’ll be pulling back in some areas.”

But while that last bill stalled at the Senate stage of the Congress battle, Apple’s name is back in the mix since Biden signed the legislation last week.

“Apple sells a lot of its devices in China and as the operator of one of the world’s largest app stores, it has experience dealing with China’s tech and policy regulators,” said Debra Aho Williamson, chief analyst at research and advisory firm Sonata Insights. “Those factors could be a plus if Apple were to make a bid for TikTok.”

Of course, given that the U.S. government just filed an antitrust case against Apple, the likelihood of regulators approving a TikTok purchase is probably slim. Meaning the tech giant might be wise to step aside.

“Content moderation is a significant issue for both YouTube and Meta, and one that is not fully solved,” said Simon Harris, director of advertising strategy at DPG Media. “By steering clear of a platform which also has these issues, Apple CEO Tim Cook would avoid the reputational damage of the business being dragged into discussions around this thorny issue.

“I think that this is especially important in their home market (the U.S.) because even if Apple could avoid reputational damage from the nearly impossible task of moderating the misinformation, terrorist content and child sexual abuse material (CSAM) that sadly exists on these platforms, the issue of moderating free speech still exists.”

Oracle

Oracle’s hat has been thrown in the ring for two reasons: first because of its current link to TikTok via its partnership in Project Texas, which was launched in 2020 as a way to reassure U.S. officials about the handling of Americans’ data. Through Project Texas, Oracle is a host for TikTok in the U.S.

“On the plus side, Oracle would have intimate knowledge of TikTok’s data systems and business strategies, making it easier to dive in and start running the company,” Williamson said. “On the bad side, Project Texas has come under a lot of scrutiny, and Oracle’s involvement could be perceived as a liability to the U.S. regulators who would have to approve the deal. Could they be confident that U.S. TikTok user data would be secure from China? It’s an open question.”

Even MacEwan said he doesn’t think Project Texas is a strong enough argument for why Oracle should be considered.

“It [Oracle] will struggle with the business-critical aspects, like ensuring a clean technical and operational separation from ByteDance,” MacEwan said. “And then whether TikTok needs to rebuild the algorithm or is allowed to transfer critical technology from ByteDance, you really need a strategic corporate buyer to make that a successful transition. Otherwise it’s TikTok going it alone – which also runs into the trust issue of are they truly shutting down all the backdoors as they transfer systems to the US? Either way, it will take years to get right.”

In 2020, when then-President Trump tried to ban the app on account of viewing it as a national security threat. After much back and forth, the U.S. government then settled on a compromise: ByteDance must sell its shares in TikTok’s U.S. arm, to a U.S. business, in order to prevent an outright ban. At that time, after chatter about potential suitors, the U.S. government settled on the business being bought jointly by Oracle and Walmart.

The joint venture (JV) deal back then saw the two businesses together investing to acquire 20% of what would have been the newly formed TikTok Global business, with Walmart providing advertising, measurement, e-commerce and payments while Oracle handled data management.

Which is to say another JV with a company like Walmart could work in Oracle’s favor again. Primarily because industry execs don’t seem to have confidence in Oracle going it alone. But also because there have been reports that ByteDance was already exploring options of selling its U.S. TikTok arm, and that the parent company would prefer a non-tech company to be the new owner.

https://digiday.com/?p=542844

More in Marketing

Pitch deck: How Amazon is talking to marketers about Performance+

It’s designed to make campaign creation and management as easy as possible, and sits within Amazon’s demand-side platform.