Oracle Corp. edged out rival Microsoft Corp. in negotiations for the U.S. operations of TikTok, people familiar with the talks said, as the Chinese-owned music-video app attempts to avoid getting shut down in a clash between the world’s two superpowers.
A deal between TikTok owner ByteDance Ltd. and Oracle will look more like a corporate restructuring than the outright sale Microsoft had proposed, though it is likely to include a stake in a newly configured American business, said one of the people, who asked not to be identified because the information isn’t public.
The terms being discussed with Oracle are still evolving, one of the people said. One of the options being explored is that Oracle could take a stake in a newly formed U.S. business while serving as TikTok’s U.S. technology partner and housing the video app’s data in Oracle’s cloud servers. Early offers from both parties valued the U.S. business at about $25 billion, but that was before Chinese officials weighed in with new rules imposing limits on technology exports, said people with knowledge of the matter.
Oracle shares gained 6.5 per cent at 10:29 a.m. in New York Monday.
The sale of TikTok — forced by a Trump administration ban on grounds of national security — is one of the issues at the heart of the fraying Washington-Beijing relationship. Any deal still requires signoffs from both sides. Early on in the discussions, U.S. President Donald Trump had voiced support for a bid from Oracle, calling it a “great company” and co-founder Larry Ellison “a great guy.” Ellison is also one of the few Silicon Valley moguls to openly support Trump.
Microsoft, which was working with Walmart Inc., had been seen as the likely winner but talks cooled in recent days, one person said. Microsoft wasn’t asked to make revisions to its initial offer in the face of recent signs of opposition to a deal from Chinese government officials, the person added.
U.S. Treasury Secretary Steven Mnuchin confirmed on Monday that the administration got a proposal over the weekend from TikTok that includes Oracle as the app’s “trusted technology partner.” He said he’ll be reviewing the proposal this week and making a recommendation to Trump, reiterating that a deadline to make a deal remains Sept. 20. In a statement, Oracle confirmed “it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend.”
“We need to make sure that the code is, one, secure, Americans’ data is secure, phones are secure, and we’ll be looking to have discussions with Oracle over the next few days with our technical team,” Mnuchin told CNBC, adding that he had a lot of confidence in both Microsoft and Oracle. The Oracle proposal contains a commitment to make TikTok global a U.S. Headquartered company with 20,000 new jobs, Mnuchin said.
Couching the deal as a corporate overhaul could help win approval in Beijing. It could allay fears about TikTok’s cache of sensitive U.S. data while addressing Chinese concerns over the export of key artificial-intelligence technology, said Yik Chan Chin, who researches global media and communications policy at the Xi’an Jiaotong-Liverpool University in Suzhou.
“If you say this is a hostile takeover, that may not be nice for both parties,” she said. “But if you frame it as like a restructuring or spinoff,” that’s more acceptable to the two governments.
China’s government on Monday declined to comment on the prospect of a ByteDance-Oracle tie-up.
“China has talked about its position on TikTok many times. The U.S. is now encircling TikTok. This is a typical coerced transaction by the government,” Foreign Ministry spokesman Wang Wenbin said at a briefing in Beijing.
ByteDance intends to bring a proposal to the White House ahead of a mid-September deadline imposed by Trump, a person with knowledge of the matter said. The progress in the talks with Oracle ignited celebrations among TikTok’s mostly young devotees.
“TikTok sold, you guys, that means we’re not going anywhere,” declared @ElianaGhen, who has 2.4 million followers, in a video touting the Oracle deal. “Best birthday gift ever, TikTok is here to stay!” said @mrsscott_teaches, who has 22,000 followers.
The app, which lets people record and edit short video clips ranging from lighthearted lip-syncs to more serious political statements, gained popularity during the global pandemic that’s kept many people cooped up indoors. TikTok’s loyal following of more than 100 million in the U.S. helps explain the strong interest among early suitors, from Microsoft to private equity giants such as Sequoia and General Atlantic.
Walmart remains interested in making a TikTok investment alongside a consortium of investors led by Oracle. A spokesperson for the retailer said Sunday it “continues discussions with ByteDance leadership and other interested parties. We know that any approved deal must satisfy all regulatory and national security concerns.”
Talk of a corporate restructuring harks back to ByteDance’s original intentions earlier in the summer to sell a partial stake in TikTok’s operations, or restructure the company with a global headquarters and board of directors outside of China. Those aspirations were complicated by Trump’s threats to ban the app and subsequent executive orders, which prohibit U.S. people and businesses from doing business with TikTok.
If the Chinese company is able to get a deal through the White House that doesn’t involve an outright, forced sale, it would be a major feat for ByteDance founder Zhang Yiming, who has been reluctant to hand over such a prized asset. Yet critics were still questioning how a technology partnership with Oracle, rather than an outright sale, would assuage the White House’s national security concerns.
“A deal where Oracle takes over hosting without source code and significant operational changes would not address any of the legitimate concerns about TikTok, and the White House accepting such a deal would demonstrate that this exercise was pure grift,” Alex Stamos, former chief security officer at Facebook, said in a post on Twitter.
Beijing’s stance is another big question mark. Shortly after bids from Microsoft and Oracle were submitted, the Chinese government announced its right to be closely involved in approval of any deal as well as its opposition to exporting key algorithms, such as a recommendation engine that underpins TikTok. ByteDance appeared eager for a more limited sort of agreement than Microsoft wanted, where it would retain more control, one of the people familiar with the negotiations said.
Some U.S. officials would prefer shutting down TikTok’s U.S. operations if a sale doesn’t meet their demands for putting the business and related data into American hands.
“ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft,” Redmond, Washington-based Microsoft said in a statement on Sunday. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”
Microsoft representatives declined to comment beyond the statement. Representatives for TikTok declined to comment. The White House also didn’t respond to a request for comment.
Microsoft was the early front-runner for the acquisition, having started talks with ByteDance weeks before Trump’s executive orders and believing it had the preliminary framework of a deal the U.S. government could back.
Read more: Oracle’s Improbable TikTok Talks Have a Simple Explanation: Data
Then Oracle, a company with a closer relationship to the U.S. president, emerged as a bidder with the backing of Sequoia Capital, a key ByteDance shareholder.
For the corporate software giant, TikTok is a less obvious fit, but may make sense in light of the company’s desire to build up its cloud-computing and consumer-data businesses. Oracle creates profiles of ordinary people and sells them to companies looking to reach specific audiences. TikTok currently stores massive amounts of data and is a large customer of cloud services run by Amazon Web Services and Alphabet Inc.’s Google.
“Oracle’s potential win in the TikTok saga could provide a minor boost to its cloud infrastructure services, as the software company looks to become a credible player in a market dominated by Amazon and Microsoft. However, Oracle has a long way to go before it becomes even a top-five player in the space, given its late entry.”
Oracle has nurtured a relationship with Trump since before his administration began. In 2016, Chief Executive Officer Safra Catz served on the president’s transition team, and two years later, dined with him at the White House, where she complained about a government contract she deemed unfair, Bloomberg reported.
Vice President Mike Pence visited Oracle’s headquarters in Redwood City, California. Catz has contributed more than $125,000 this year to support Trump’s re-election, according to Federal Election Commission data. And Ellison let Trump use one of his California estates to hold a fund-raiser in February.
In recent weeks, the U.S. president had publicly endorsed the Oracle bid and called Ellison a “tremendous guy.” Trump economic adviser Peter Navarro, who earlier came out against a potential sale to Microsoft and had at one time advocated banning TikTok completely, echoed that endorsement during an August appearance on Fox News.
“If you look at Microsoft versus Oracle, the one thing that separates the two companies with respect to national security is that Microsoft has a large footprint in China,” Navarro said. “Oracle on the other hand has a strong reputation of really putting a great firewall between its operations and China and that’s an important thing.”
–With assistance from Jennifer Jacobs, Pavel Alpeyev, Justin Sink, Kurt Wagner, Katie Roof, Matthew Boyle, Nico Grant and Colum Murphy.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
