Oracle has confirmed U.S. Treasury Secretary Mnuchin's statement that it is part of a proposal submitted by ByteDance to the Treasury Department over the weekend, in which Oracle will serve as the "trusted technology provider" for TikTok. The confirmation came Monday in a press statement. The details of the deal have not been released.
TikTok also confirmed. "We can confirm that we've submitted a proposal to the Treasury Department that we believe would resolve the Administration's security concerns," a TikTok spokesperson wrote in an email to Search & Performance Marketing Daily.
"This proposal would enable us to continue supporting our community of 100 million people in the U.S. who love TikTok for connection and entertainment, as well as the hundreds of thousands of small business owners and creators who rely on TikTok to grow their livelihoods and build meaningful careers."
Martin Ekechukwu, CEO of New York City-based content ad agency WHTWRKS, believes this will give Oracle its first “strong stab at advertising revenue through TikTok and by sharing their revenue with content creators based on pre-roll like on YouTube or different scrolling features like on SnapChat.”
“I’m excited about Oracle stepping into a position where they want to help TikTok grow,” he said. "If you look at how Facebook and Instagram grew over the past five to 10 years, they grew by providing different levels of content. They went from providing 30-second and 60-second up to thirty minutes on Instagram and something similar on Facebook. Growing the audience brings in the advertisers.”
WHTWRKS is the agency behind the recent Burger King VMA’s spots with Lil Yachty, Doritos’ “Amplify Black Voices” BLM campaign, and more creative work for other big brands.
Trip Chowdhry, co-founder of Global Equities Research, believes a "trusted technology provider" means the U.S. government will require TikTok to run on Oracle Cloud services.
In an interview with MediaPost last month, Chowdhry said Oracle has a security layer in its cloud Infrastructure at the semiconductor-chip level to support privacy and protect against data theft and fraud. He pointed to the Oracle Gen 2 Cloud Spartan chip.
In a research note published Monday, Chowdhry explains how the Oracle Spartan Chip secures the Firmware that powers the Oracle Gen 2 cloud, something the competition cannot do.
"TikTok’s recommendation engines are distinct from algorithms used by Facebook and traditional networks, which rely heavily on suggestions from friends," Chowdhry wrote. "TIkTok harvests insights based on what its users actually click on, read, and watch, right down to the type of music, faces, and voices in videos."
The TikTok platform allows users to upload and edit videos, as well as live-stream content, record and monitor reactions. Chowdhry estimates there are 800 million active users worldwide, something he says took Instagram six years to accomplish from its launch.
TikTok's business model focuses on advertisements and in-app purchases, testing in-app ads. It takes a minimalist approach similar to Tesla and Zoom, Chowdhry wrote.