Oracle recently announced it has joined the race to acquire the US assets of very popular app TikTok. Microsoft is also in contention, whilst Twitter has been suggested as another interested party.

In response to this news shares in Oracle rose by 2%, however, some analysts believe TikTok wouldn’t be a good fit for Oracle. The Founder and chief investment officer at Joule Financial recently stated that he didn’t understand their intention of purchasing TikTok, suggesting that the interest in the app isn’t a good fit for where their business is going. 

Other analysts, however, believe that TikTok does make sense for Oracle. Industry professional at strategic consultancy the Centre for Innovating the Future believes by integrating TikTok into their servers, Oracle could create new opportunities in new industries.

In the post-pandemic era, many businesses are trying to be innovative and look at ways to reinvent themselves. Within the technology industry, there are clearly risks, but there are also opportunities and Oracle may be looking at TikTok with their own ideas of how they could use the application and are yet to reveal these concepts to the wider market.

The Chinese app is considerably popular among the younger generation. A sale to a US-based business would likely increase its appeal to Americans that may have steered away from the business due to concerns over data privacy.

According to Chinese based technology business ByteDance, TikTok is valued in the region of $95 to $140 billion. If Oracle is to acquire the application it would help the business diversify its portfolio and enhance its market valuation. Analysts believe the acquisition of a high growth business like TikTok would support Oracle in improving its growth rates and increase its total valuation multiple.