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Q&A: What does a deal between TikTok and Oracle mean?

Inside Telecom Staff

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Q&A: What does a deal between TikTok and Oracle mean?

HONG KONG (AP) — ByteDance, the Chinese company that owns the popular video-sharing app TikTok, has chosen Oracle over Microsoft as a new American technology partner to help keep the app operating in the U.S. TikTok confirmed the decision Monday, echoing earlier statements from Oracle and the U.S. treasury secretary.

ByteDance faces a Sept. 20 deadline to sell TikTok to an American company or risk being banned in the U.S. over national security concerns. But a lot remains unclear, including how the social media company would fit inside a business software company like Oracle and whether whatever arrangement the companies reach will be acceptable to the U.S. officials who will need to approve it.

Here are some questions and answers about the deal.

Q. WHAT IS TIKTOK?

A. The app is a home for fun, goofy videos that are easy to make and to watch. That’s made it immensely popular, particularly with young people, and U.S. tech giants like Facebook and Snapchat see it as a competitive threat. TikTok says it has 100 million U.S. users and hundreds of millions globally. It has its own influencer culture, enabling people to make a living from posting videos on the service, and hosts ads from major U.S. companies.

ByteDance Ltd., a Chinese company, launched TikTok in 2017, then bought Musical.ly, a video service popular with teens in the U.S. and Europe, and combined the two. A twin service, Douyin, is available for Chinese users.

Q. WHAT CONCERNS U.S. OFFICIALS ABOUT THE APP?

A. TikTok, like most other social networks, collects user data and moderates what’s posted. It grabs people’s locations and messages they send one another, for example, and tracks what people watch to discern what kinds of videos they like and how best to target ads to them.

Similar concerns apply to American social networks, but Chinese ownership adds an extra wrinkle because the Chinese government could order companies to help it gather intelligence. In TikTok’s case, that’s a hypothetical threat, Samm Sacks, a researcher at Yale Law School’s Paul Tsai China Center has said.

TikTok says it does not store U.S. user data in China and that it would not give user data to the government. But experts say if the Chinese government wants information, it will get it.

There are also concerns about TikTok censoring videos critical of China, which TikTok denies, or pushing propaganda. Some critics say the company is violating children’s privacy laws.

The U.S. has given parent company ByteDance a Sept. 20 deadline to complete a sale of TikTok’s U.S. assets to an American company, or risk being banned in the country.

Q: IS ORACLE BUYING TIKTOK, AND WHAT ASSETS ARE INVOLVED?

Oracle was among the pool of bidders, including Microsoft and Walmart, to buy TikTok’s American operations. Microsoft on Sunday said that ByteDance will not be selling TikTok’s U.S. operations to the company. Oracle, in confirming it was the winning bidder Monday, didn’t refer to the deal as a sale or acquisition, instead saying it was chosen as TikTok’s “trusted technology provider.”

It’s unclear at this point what assets, if any, Oracle would actually acquire.

TikTok has found popularity around the world thanks in part to its content-recommendation algorithm, which suggests videos to users based on their viewing history. But the Hong Kong newspaper South China Morning Post reported Sunday, citing an unnamed person, that ByteDance will not sell the algorithm. China has tightened its controls and requires companies to get permission to export such technologies.

“The Chinese government has implied it may block export of TikTok’s AI systems, so that might complicate a direct sale,” said Tiffany Li, a visiting professor at the Boston University School of Law. “One of TikTok’s competitive advantages is its AI-backed video recommendation system.”

Q: WHAT IS ORACLE’S RELATIONSHIP TO TIKTOK LIKELY TO BE?

Oracle is known for providing enterprise software including cloud computing services. So it could provide cloud services such as storing TikTok’s data in the U.S., or computing services for the app.

“Oracle could be a technology partner, but a sale or divestiture of the US operations for TikTok remains the focus,” Wedbush Securities analysts said in an analyst note.

Q: WILL THE TRUMP ADMINISTRATION GO FOR THE ARRANGEMENT?

A: A TikTok-Oracle deal must be approved by the Committee on Foreign Investment in the United States (CFIUS), which vets deals that may have national security implications. U.S. Treasury Secretary Steven Mnuchin told CNBC on Monday that the group will review the proposal this week and later make a recommendation to President Donald Trump.

CFIUS earlier greenlighted Chinese PC maker Lenovo’s purchase of IBM’s computer server business in 2014, after concluding the deal did not pose significant security risks. It also cleared SoftBank’s acquisition of Sprint in 2013, but only after SoftBank agreed not to use Huawei Technologies and ZTE equipment in the U.S.

If Oracle and TikTok can show they can safeguard user data in the U.S., CFIUS and the Trump administration might accept the arrangement.

TikTok said in a Monday statement that its proposal aims to “resolve the Administration’s security concerns” and emphasized the importance of its app to the 100 million users it claims in the U.S.

A Chinese Foreign Ministry official said Monday that it had no comment on Oracle, but described the situation as a “typical government-coerced transaction.”

Q: HOW MUCH DOES ORACLE’S CLOSENESS TO THE ADMINISTRATION MATTER?

A: Trump hasn’t said if he preferred Oracle or Microsoft but in August described Oracle as “a great company” that could handle the sale.

Oracle co-founder Larry Ellison is unusual among tech executives for his public support of President Donald Trump.

“Oracle’s connections with the Trump administration are interesting. It’s possible they may be able to negotiate an outcome that allows TikTok to continue operating in the U.S. without a full sale, with ByteDance still retaining something,” said Boston University’s Li.

Mnuchin said Monday that “we have a lot of confidence in both Microsoft and Oracle,” but noted that ByteDance has chosen Oracle.

Q: WHAT MIGHT THIS DEAL MEAN FOR USERS?

If it is finalized and approved by CFIUS, TikTok would be allowed to continue operating in the U.S.

“Trump’s executive order that effectively banned TikTok’s U.S. business would likely no longer apply, as TikTok would no longer be owned by Bytedance,” said Li.

“Executive orders can be revoked or modified at any time,” she said.

However, Oracle’s plans remain unclear.

“I doubt we’ll see the creativity and consumer-friendliness that we might expect with a different owner,” Li said.

Paul Haswell, partner at law firm Pinsent Masons, expects Oracle to strive to keep TikTok’s users.

“If the app changes or the user experience changes then the users might abandon the platform which completely undermines the value of TikTok and Oracle’s acquisition,” he said.

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Discovery’s reality-heavy streaming service launches in Jan.

Inside Telecom Staff

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Discovery is joining the increasingly crowded streaming fray with its own reality-focused service Discovery Plus that will include shows from the Food Network, HGTV, TLC and its other networks. It launches Jan 4.

The service will cost $5 a month with ads and $7 a month without ads. By comparison, the ad-free Disney Plus costs $7 a month and Netflix’ most popular plan costs $14 a month.

Each account will include up to five user profiles and support four concurrent streams. Discovery said the service will be available on “major platforms,” connected TVs, web, mobile and tablets, but it didn’t specify which services would carry it.

Discovery CEO David Zaslav first announced the streaming service in late 2019, but did not provide details until now.

Discovery has built a reality-TV empire with popular channels that feature reality programming, including the Discovery Channel, HGTV, Food Network, TLC, Investigation Discovery and others. Hit shows have included TLC’s “90-Day Fiance,” HGTV’s “Fixer-Upper” and Guy Fieri’s “Diners, Drive-Ins and Dives” on the Food Network.

The service will offer some originals like “90-Day Fiance” spinoff “90-Day Diaries” and “Long Island Medium” spinoff “Long Island Medium: There in Spirit.”

Verizon customers will get a year free of the service, similar to the deal that Verizon did when Disney Plus launched in late 2019.

Discovery Plus joins a slew of new streaming services started to challenge traditional TV providers and dominant streaming services like Hulu and Netflix over the past year, including Disney Plus, Apple TV Plus, HBO Max and Comcast’s Peacock service. CBS recently rebranded its CBS All Access service as Paramount Plus, relaunching in 2021.

The service will role out in 25 countries in 2021 including Italy, Spain, U.K. and Ireland as well as India.


By The Associated Press undefined

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UK authorizes Pfizer coronavirus vaccine for emergency use

Inside Telecom Staff

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UK authorizes Pfizer coronavirus vaccine for emergency use

Drugmakers Pfizer and BioNTech said Wednesday they’ve won permission for emergency use of their COVID-19 vaccine in Britain, the world’s first coronavirus shot that’s backed by rigorous science — and a major step toward eventually ending the pandemic.

The move allows Britain to become one of the first countries to begin vaccinating its population as it tries to curb Europe’s deadliest outbreak.

“The vaccine will be made available across the U.K. from next week,” the Department of Health and Social Care said in a statement. The National Health Service “has decades of experience in delivering large scale vaccination programs and will begin putting their extensive preparations into action to provide care and support to all those eligible for vaccination.”

Other countries aren’t far behind: Regulators in the United States and the European Union also are vetting the Pfizer shot along with a similar vaccine made by competitor Moderna Inc. British regulators also are considering another shot made by AstraZeneca and Oxford University.

British media have reported that hospitals in England have been told to get ready to start doing vaccinations for medical workers as early as next week.

Pfizer said it would immediately begin shipping limited supplies to the U.K. — and has been gearing up for even wider distribution if given a similar nod by the U.S. Food and Drug Administration, a decision expected as early as next week.

But doses everywhere are scarce, and initial supplies will be rationed until more is manufactured in the first several months of next year.

Pfizer CEO Albert Bourla called the U.K. decision “a historic moment.”

“We are focusing on moving with the same level of urgency to safely supply a high-quality vaccine around the world,” Bourla said in a statement.

While the U.K. has ordered enough Pfizer vaccine for 20 million people, it’s not clear how many will arrive by year’s end. Adding to the distribution challenges, the Pfizer vaccine must be stored at ultra-cold temperatures. Two doses three weeks apart are required for protection.

The U.K. government says frontline health care workers and nursing home residents will be first in line to get vaccinated, followed by older adults.

But Prime Minister Boris Johnson has warned that even once the vaccine begins to be used, “we must first navigate a hard winter” of restrictions to try to curb the virus until there are enough shots to go around.

Every country has different rules for determining when an experimental vaccine is safe and effective enough to use. Intense political pressure to be the first to roll out a rigorously scientifically tested shot colored the race in the U.S. and Britain, even as researchers pledged to cut no corners. In contrast, China and Russia have offered different vaccinations to their citizens ahead of late-stage testing.

The shots made by U.S.-based Pfizer and its German partner BioNTech were tested in tens of thousands of people. And while that study isn’t complete, early results suggest the vaccine is 95% effective at preventing mild to severe COVID-19 disease. The companies told regulators that of the first 170 infections detected in study volunteers, only eight were among people who’d received the actual vaccine and the rest had gotten a dummy shot.

“This is an extraordinarily strong protection,” Dr. Ugur Sahin, BioNTech’s CEO, recently told The Associated Press.

The companies also reported no serious side effects, although vaccine recipients may experience temporary pain and flu-like reactions immediately after injections.

But experts caution that a vaccine cleared for emergency use is still experimental, and the final testing must be completed. Still to be determined is whether the Pfizer-BioNTech shots protect against people spreading the coronavirus without showing symptoms. Another question is how long protection lasts.

The vaccine also has been tested in only a small number of children, none younger than 12, and there’s no information on its effects in pregnant women.


By LAURAN NEERGAARD AP Medical Writer


The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

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Salesforce buying work-chat service Slack for $27.7 billion

Inside Telecom Staff

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Salesforce buying work-chat service Slack for $27.7 billion

Business software pioneer Salesforce.com is buying work-chatting service Slack for $27.7 billion in a deal aimed at giving the two companies a better shot at competing against longtime industry powerhouse Microsoft.

The acquisition announced Tuesday is by far the largest in the 21-year history of Salesforce. The San Francisco company was one of the first to begin selling software as a subscription service that could be used on any internet-connected device instead of the more cumbersome process of installing the programs on individual computers.

Salesforce’s flamboyant founder and CEO Marc Benioff hailed the “cloud computing” concept as the wave of the future to much derision initially.

But software as a service has become an industry standard that has turned into a gold mine for longtime software makers. Microsoft for one has developed its own thriving online suite of services, known as Office 365, which includes a Teams chatting service that includes many of the same features as Slack’s 6-year-old application.

Slack in July filed a complaint in the European Union accusing Microsoft of illegally bundling Teams into Office 365 in a way that blocks its removal by customers who may prefer Slack.

Microsoft also has been posing a threat to Salesforce’s main products, a line-up of tools that help other companies manage their customer relationships.

“For Benioff, this is all about Microsoft,” Wedbush Securities analyst Dan Ives said of Tuesday’s deal. “It’s just clear Microsoft is moving further and further away from Salesforce when it comes to the cloud wars.”

Benioff left no doubt he considered the deal to be a major coup, after losing out to Microsoft in 2016 when the two companies were both vying to buy the professional networking service LinkedIn.

“It’s a match made in heaven,” Benioff said during an ebullient conference call. “We see in Slack a once-in-a-generation company and platform. It’s a central nervous system for so many companies.”

Salesforce has been building on its success in recent years to diversify into other fields, largely through a series of acquisitions that included its previous largest deal, a $15.7 billion purchase of data analytics specialist Tableau Software last year.

Many of the deals have been financed with Salesforce’s stock, which is worth nearly seven times more than it was a decade ago to lift the company’s current market value to $220 billion. Salesforce is using its stock to pay for roughly half of the Slack purchase, with the rest being covered with some cash, with some of the money being borrowed during a time of extraordinarily low interest rates.

Slack, on the other hand, hasn’t proven as popular with investors, even though its service that publicly launched in 2014 is being increasingly used by companies and government agencies looking for more nimble alternatives than email. Before news reports of a potential deal with Salesforce surfaced last week, Slack’s stock was still hovering around its initial listing price of $26 when the company went public nearly 18 months ago.

“This is a stellar exit strategy for Slack,” said Kate Leggett, an analyst at Forrester Research. “Microsoft Teams is eating Slack’s lunch.”

Slack co-founder Stewart Butterfield will be hoping this sale works out better than when another company he started, photo sharing service Flickr, was sold to Yahoo 15 years ago. Flickr got lost in the shuffle at Yahoo amid years of turmoil before it was finally sold again in 2018 to SmugMug.

In his next act after leaving Flickr, Butterfield decided to focus on gaming with a startup called Tiny Speck that launched in 2009. A few years later, he shifted to the instant messaging service whose name was an acronym for “Searchable Log of All Conversation and Knowledge.”

Leggett predicted Salesforce would benefit from owning Slack because it will add a popular collaboration tool to its own software suite, which is focused on managing customer relationships for businesses and government agencies. She said the need for customer-relations agents and other Salesforce users to swarm around a topic and collaborate remotely has only grown with the coronavirus pandemic that has sent so many office workers home and got many hooked on new online tools.

If all goes smoothly, Salesforce hopes to take control of Slack sometime from May to July next year.

Slack, which is free for people who use the basic version, found quick adoption in the tech industry for its ease of use and its fostering of a more casual mode of conversation than email. The company stopped releasing its daily user count after topping 12 million last year, focusing instead on paid customers, which Butterfield said in March have shown a “massive outpouring of interest” because of the way the pandemic has forced people to work from home.

“I think the pandemic’s played a massive role” in paving the way for the deal, Ives said. “The Zooms, the Slacks, the Microsoft Teams, that’s going to be a new part of the workforce.”

Ives said Benioff was also running out of time to catch up to Microsoft, which remains a secondary player in Salesforce’s core customer-relations-management business, known as CRM, but way ahead in providing a broader array of cloud-based services.

Slack and Salesforce are headquartered about a block away from each other in San Francisco. Slack’s office is in the shadow of the 62-story Salesforce Tower, the tallest building in Northern California.

“I get to look right out my window and you know what I see? Slack,” Benioff said.


SAN RAMON, Calif. (AP) — By MICHAEL LIEDTKE and MATT O’BRIEN AP Technology Writers.

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